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Trademark Public Advisory Committee Highlights

Daniel Mills, Trademark Attorney

Posted Monday, February 22, 2016 by Daniel Mills

The Trademark Public Advisory Committee held a meeting on February 15th to review the current fiscal year status, provide budget for 2017, and review fees and rulemaking for the coming year. There were several interesting pieces of information from the presentation:

  • Q1 2016 FY (Oct. 2015-Dec. 2015) filings are up 12.6% over same period last year
  • The Office is expecting a 7% increase in filings for the entire 2016 FY
  • The USPTO did a great job of “weathering the storm” when the blizzard that hit Washington DC this winter. At one point 77% of the USPTO workforce was able to telework and trademark examining attorneys were able to complete 90% of the normal workload despite the city being shut down for a week
  • The time from first filing to first office action is 3.1 months (within their target range)
  • The time from filing date to allowance, issuance, registration, or abandonment is averaging 10 months (well ahead of 12 month target)
  • Electronic filings are ahead of target at just over 80%
  • There are currently 474 examining attorneys for trademarks with another 40 to be added by the end of the year
  • Through telework, there are examining attorneys working in 30 states
  • New fees schedule is planned for spring 2016 release for 60 day comment period
  • The Office will continue to enhance IT modernization and technology

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IPR Proceedings Reviewed by Supreme Court

Jim Ruttler, Patent Attorney

Posted Sunday, February 14, 2016 by Jim Ruttler

The America Invents Act created new proceedings at the Patent Office to challenge issued patents called inter partes review proceedings (IPR). These proceedings can be brought by private parties to challenge whether a patent should have been issued. Since inception, IPRs have been popular because of the speed and high likelihood of success for invalidation. Meanwhile, patent owners and innovators have protested these proceedings as being unfair, unjust, and even unconstitutional.

Well, the day of reckoning has finally arrived for the Patent Office. The Supreme Court has recently accepted one of the first cases to reach this level of the judicial process. In Cuozzo, the Supreme Court will be reviewing the policy of the patent office to interpret claims using the broadest reasonable interpretation standard. Many expect the Patent Office to be taken to task over the use of this standard, which is inconsistent with the Phillips standard used by the Courts when reviewing issued patents and inconsistent with the presumption of validity enjoyed by issued patents.

Cuozzo is just the tip of the iceberg as there are more coming, such as Cooper which the Supreme Court is being asked to accept on the heals of Cuozzo. In Cooper, the Supreme Court is being asked to declare the entire IPR proceedings as being unconstitutional. This is on the basis that the Patent Office is invalidating private property rights, patent rights, which activity has been deemed by past Supreme Court decisions to be entirely within the purview of the judicial system.

If the Supreme Court accepts Cooper along with Cuozzo, it is highly likely that the IPR proceedings will be substantially limited or scrapped altogether, which would be a very positive development for innovators and patent owners.

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CAFC Strengthens Patent Rights by Limiting Exhaustion

Jim Ruttler, Patent Attorney

Posted Sunday, February 14, 2016 by Jim Ruttler

Patents just became more valuable thanks to a recent decision by the Federal Circuit. The majority opinion in Lexmark v. Impression came down on Friday whereby the Court held that a patent owner can limit the use and resale of a patented article. That is, patent owners can prevent customers from using or reselling a product and such limitation is binding not only on the customer but also on downstream purchasers of the product from the customer.

Lexmark sold certain printer cartridges that were covered by a patent and expressly limited the printer cartridges for single use. Impression bought the single use printer cartridges and then adapted them to make the reusable and then sold them at a discount compared to Lexmark’s other reusable cartridges. Lexmark sued for infringement and Impression defended on the basis that Lexmark lost patent rights in the sold printer cartridges because they were sold to impression. This is otherwise known as exhaustion. The Federal Circuit said in a very lengthy opinion that patent rights are different from copyrights, which are subject to copyright exhaustion. Used books and CDs and paintings can be resold on the secondary market when the copy is lawfully purchased. Here, the Court said that patents are different. According to the court, the Patent Act expressly allows for the patent owner to prevent others from making, using, and selling the patented invention. There is no statute as with copyright law that limits the patent rights via exhaustion. Thus, the Court held that if a patent owner limits the rights that accompany the sale of a product and there is not implied or express license granted to the purchaser, then the patent owner retains those rights.

For example, if a patent owner sells an article and states the the customer is only to use the article one time and cannot resale the article, then it would be infringement for the customer to resale the article. Moreover, it would be infringement of any purchaser to purchase and use the article from the customer.

It is clear for the time being, unless the Supreme Court or Congress intervenes, that patent owners can place limits on the use and resale of patented products and have those limits be binding on customers and all downstream purchasers. This is great news for innovators as it will allow patent owners to have greater control of patented products and maximize the benefit associated therewith.

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2015 TTAB Results Show Appeal Victories on the Rise

Posted Friday, February 5, 2016 by Daniel MIlls

Thanks to the hard work of TTAB watcher extraordinaire John L. Welch, we have some idea that 2015 was a better year for appeals at the TTAB when it comes to Section 2(d) refusals for likelihood-of-confusion and Section 2(e)(1) refusals for merely descriptive. You can find his post here.

Mr. Welch determined that of the 223 Section 2(d) refusals, 188 were affirmed and 35 reversed, making the reversal rate 15%. While that sounds paltry, that is a 36% increase over last year’s rate of 11%. Of the 97 Section 2(e)(1) refusals, 84 were affirmed and 13 reversed, making the reversal rate 14%.

The increase in reversals brings 2015 back in to the historical average of the last few years. The outcome of an appeal will be based on the set of facts, circumstance, and the relative strength of the marks in question. One way to interpret these numbers is to say that the examining attorneys at the PTO get it right a good majority of the time. Another way to look at it is that the TTAB and the PTO read from the same play book, and it is no surprise that they agree so often. As with any statistical presentation, the numbers don’t account for a lot of factors. Primarily, the aspect of picking the right fight cannot be quantified. Some appeals should never be filed and many good battles are never waged, so the percentage in any year could be affected by the “quality” of the cases.

I come out on the side that says the examiners do a good job. I believe this mainly out of personal experience and that fact the rules, procedures, decisions, and TMEP, are all available for practitioners to learn from, so we all have access to the same playbook. I work hard to counsel clients honestly about the strength of their marks, and their chances of success in overcoming refusals. Picking the right mark makes picking the right battle easier and helps me keep my personal reversal rate much better than average.

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Pine Tree Crushes Palm Tree in Battle of Car Air Fresheners

Daniel Mills, Trademark Attorney

Posted Thursday, December 17, 2015 by Daniel Mills

On the day I posted about the lawsuit involving Car-Freshener and rival Exotica Freshener Company over trademark infringement, the jury in the case found that the Exotica’s palm tree design, packaging, and colors infringed on Car-Freshener’s much more familiar pine tree shaped product. The story of the verdict in the New York Times includes an image that compares the two products.

When I look at the image, I can see why the jury found that the trade dress was confusingly similar. Trade Dress used to refer only to a products packaging, but over the years has been extended to protect a product’s design. In this case, the jury found that both the packaging and the product design were similar enough to cause confusion as to the source of goods. In other words, the average consumer might believe that the palm tree air freshener was made by the same company that made the pine tree version.

The legal principle behind trade dress is the perfect subject for a future post.

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