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Lexmark Patent Exhaustion

Posted Tuesday, April 18, 2017 by Kyle Straughan

On March 21, 2017 the Supreme Court heard oral arguments in Impression Products, Inc. v. Lexmark Int’l, Inc., a case that will have a large impact on patent exhaustion. In brief, patent exhaustion is the doctrine which holds that a patentholder’s right to enforce its patent on something is exhausted the moment the patentholder sells the thing. In the present case, Lexmark owns patents to refillable print cartridges, and thus under the exhaustion doctrine its rights would be exhausted when it sells them to retail buyers. The primary issue facing the Court is whether Lexmark may condition sales on the promise that the buyer will not refill the cartridge. Currently Lexmark sells the cartridges at a discount, but the buyer agrees not to refill the cartridge. Impression Products is in the business of refilling Lexmark’s cartridges, which Lexmark argues is in violation of the agreements it has with buyers.

During oral argument, the Justices revealed little about their opinion, with Chief Justice John Roberts and Justice Stephen Breyer questioning as to why Lexmark’s desired arrangement could not be handled purely with contract law. Additionally, the Justices questioned why they should read an exhaustion doctrine into the existing law when Congress clearly did not include it. The Justices noted that the Patent Act, unlike the Copyright Act, does not codify exhaustion. Noteworthy is that in a recent copyright case, Kirtsaeng v. John Wiley & Sons, Inc., the court adopted a broad rule of copyright exhaustion, even on international sales. Although it is currently unclear based on the Justices’ questions which direction they are leaning, the decision in this case will go lengths in clarifying a patentee’s rights both domestically and internationally.

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New Trademark Rule for Use Requirement Begins on March 21, 2017

Daniel Mills, Trademark Attorney

Posted Friday, February 24, 2017 by Daniel Mills

The key to trademark rights is use in commerce. With or without federal registration, rights are created by use. The rights are stronger with federal registration, but nonetheless, if there is not proper use, there are no rights. When applying for a trademark at the USPTO, an applicant is required to submit a specimen of use showing the mark used in commerce in the category of goods or service for which it had applied before a registration is granted.

A common example is a broad category of Clothing. You can find registrations where the goods description contains every article of clothing imaginable; e.g. (shirts, hats, sweatshirts, pants, socks, and ties). You can also find registrations where the description is “tops”. This is significant because when one applies for a trademark, whether under existing use or intent to use, the applicant is only required to submit proof of use in commerce for one good in its description. So, in the above example, proof of use on a bow tie would satisfy the requirement for the entire description. This will continue to be the rule for new applications

Beginning on March 21, 2107 that requirement will change when it comes time for filing the affidavit of continued use under section 8 or section 71 as part of trademark maintenance. Under the new rule, the USPTO has the right to request further documentation, proof, and declarations for ALL the goods listed in the description. Under the previous example, the trademark owner may have to submit proof of use on each article of clothing listed in its description.

It will be interesting to see the effect this will have on goods and services descriptions, line expansion, and foreign trademarks coming into the US where standards are different.

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When is a Patent Subject to CBM Review

Jim Ruttler, Patent Attorney

Posted Thursday, February 23, 2017 by Jim Ruttler

There is a procedure to challenge business method patents that sunsets in September of 2020. Until that time, it is a popular way to challenge patents because it allows for review under all statutory provisions, including Section 101 for ineligible subject matter. The IPR alternative to challenging patents is not as accommodating and allows for challenges only for not being new or for being obvious using prior art.

The problem for CBM review is that it only applies under statute to claims that are directed to a financial service. Many challengers attempt to squeeze in technical inventions into this category by arguing that CBM applies whenever the claims could be used in a financial service environment. Obviously, this argument would sweep everything into CBM because every technology could be used in a financial services environment.

Fortunately, the Courts have limited CBM to only those claims that actually claim a financial service. Unwired Planet and Secured Axcess are two cases of the Federal Circuit that are on point here.

For applicants, it is therefore important to be careful what you claim. Should one claim be determined to be directed to a financial service, all the claims can be swept into a CBM challenge later and easily invalidated using Section 101 for being an abstract idea.

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Supreme Court Limits Contributory Liability for Exports

Jim Ruttler, Patent Attorney

Posted Thursday, February 23, 2017 by Jim Ruttler

In Life Tech v. Promega, the Supreme Court has limited contributory liability for supplying parts overseas that are combined to infringe a U.S. patent.

The statute 35 U.S.C. §271(f)(1) creates liability for supplying from the US “all or a substantial portion of the components of a patented invention” to be combined abroad in a manner that would infringe the US patent (if it had been combined in the US). That is, if a substantial portion of the patented invention is shipped overseas only to be combined into an infringing product, there is liability here in the U.S. This prevents companies from escaping infringement liability by making most of the patented product here and then shipping it overseas to finish up the product.

Here the defendant was only shipping one component/ingredient overseas and that ingredient was being used to create the infringing product. The Federal Circuit held that one ingredient could be a substantial part of the patented product. However, the Supreme Court reversed and said it is never enough to supply only one component. There must be a substantial number of components shipped overseas and not just one.

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2-17-17 Roud-Up of Trademark News

Daniel Mills, Trademark Attorney

Posted Friday, February 17, 2017 by Daniel Mills

New England Patriots File for NO DAYS OFF and BLITZ FOR SIX marks.

After their 5th super bowl victory, the New England Patriots have applied for two trademarks inspired by their latest win. The first trademark is BLITZ FOR SIX for both Clothing and Entertainment services namely “providing expert commentary on sports events via the Internet”. BLITZ FOR SIX has a trademark history. The mark was previously registered for clothing and paper goods (posters, bumper stickers) in 2007, but the mark was cancelled in 2014. The record at the USPTO does not show a reason for the cancellation. Later, the mark was allowed in March 2015 for clothing and entertainment services namely “basketball games and exhibitions rendered live in stadia and through the media of radio and television broadcasts”. However, the applicant never filed the required Statement of Use and the application was abandoned.

The NO DAYS OFF application is only for entertainment services namely “providing expert commentary on sports events via the Internet”. Why not clothing, when a “NO DAYS OFF’ hoodie with cut off sleeves seems like an obvious and lucrative item at the Patriots team shop? Because there is a prior pending application for the mark as well as an existing registration for TAKE NO DAYS OFF for Clothing. Despite the popularly held belief that the NFL is omnipotent, a belief most closely held by the league and its teams, there are some battles that they just can’t win. So be on the lookout soon for some kind of internet show featuring “expert commentary” about the Patriots entitled NO DAYS OFF or BLITS FOR SIX.

PJ Fleck Acquires Rights to ROW THE BOAT

In other sports related trademark news, new Minnesota Golden Gopher football coach PJ Fleck reached a deal with his previous school, Western Michigan University, to use the trademark ROW THE BOAT for clothing and sporting events. It appears like it is a licensing agreement in which WMU will still retain ownership and the right to use the mark when recognizing Fleck’s achievement at the University. Fleck will pay WMU $10,000 a year for five years that will be used to endow a scholarship. This is a good move for both parties. The phrase is Fleck’s signature and will always be associated with him. It stems from Fleck’s journey dealing with the death of his infant son in 2011.

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