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Marijuna Trademarks Still Not Permitted Under Federal Law

Daniel Mills, Trademark Attorney

Posted Wednesday, July 20, 2016 by Daniel Mills

Being based in a state that allows medical and recreational marijuana use, I have received many inquiries about obtaining federal trademark protection for marijuana related products and services. Under trademark law, a trademark must be associated with goods or services with lawful commercial use. Because trademark law is federal, the lawfulness standard means that the use has to comply with federal law, not state law. In other words, it does not matter that Washington allows marijuana (or any other state). Because it is against federal law, it is unlawful for trademark purposes.

I have heard many crafty suggestions on how to skirt this issue from shop owners, growers, and entrepreneurial investors. However, the reality is that you cannot get a federal trademark if there is a connection with actual marijuana. The latest example of this came down on Monday July 18, 2016 with when the Trademark Trial and Appeal Board (TTAB) upheld a refusal on an application for Herbal Access in association with “retail store services featuring herbs”. You can read the decision here.

The applicant unsuccessfully attempted to argue that because they sold “herbs” which is legal, the application should be allowed. The TTAB held that the evidence in the application and on the applicant’s website clearly indicates that they sell marijuana and therefore is a violation of the Controlled Substance Act, and therefore, a federal violation that bans trademark registration.

This decision makes it clear to me, that no matter how clever, an applicant may try to be, if there is a connection to marijuana, there will be a refusal. I don’t think this attempt was particularly clever, nor was it argued that strongly. However, if you want to connect a trademark to a federally illegal good or service, it won’t happen. In other words, no one is that clever!

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Federal Circuit Appeals Court Finds 3rd Case of Eligible Subject Matter in Software

Jim Ruttler, Patent Attorney

Posted Monday, June 27, 2016 by Jim Ruttler

The Federal Circuit today issued its decision in Bascomb where it found for the third time that software can be patent eligible. After the broad language of the Supreme Court decision in Alice, many thought that software could be no longer patent eligible. The appeals court in charge of patents has again stated that this is not the case and that software remains patent eligible.

Here, the claims in Bascomb were directed toward a network traffic filtering system. Older systems placed the filtering software on the client, which allowed for customization. Some efforts at centralizing the filtration software on servers had resulted in a one-size-fits-all approach. The claims here solved that problem by allowing customization of filtration rules while centrally locating the filtering software.

The Court held that while filtering was something old and well known, the specific application here added more and didn’t preempt all filtering.

Judge Newman issued a concurring opinion calling for the need to return to a focus of the statute and on novelty and non-obviousness instead of eligibility. The eligibility test has become unpredictable and is conflating other areas of the Patent Act. This reflection is accurate and welcome in what has become a really confusing area of the law.

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Brexit Vote Likely to Delay European Patent Courts

Jim Ruttler, Patent Attorney

Posted Friday, June 24, 2016 by Jim Ruttler

The European Unitary Patent and Unified Patent Court system was set to be ratified within the next few months. One can currently obtain a European Patent through the European Patent Office, but this patent must be separately enforced in each country of the EU. Obviously, this is not efficient when an infringer is operating in two countries or more. The Unified Patent Court would have provided a single court system that allowed for enforcement across all of the EU.

According to leading UK magazine, IAM Media, The Unified Patent Court system has been placed on hold now after the Brexit vote. It could take at least two years or more for implementation of the Unified Patent Court and it may never happen now that the UK is planning to exit the EU.

This means that the United States remains the largest single market of coverage for patent assets and that the recent rush to European patents may not result in as large a benefit as hoped.

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Cuozzo SCOTUS Decision BRI is OK

Jim Ruttler, Patent Attorney

Posted Tuesday, June 21, 2016 by Jim Ruttler

Yesterday the Supreme Court decided Cuozzo and held that the broadest reasonable interpretation is fine during inter partes review proceedings. Cuozzo had wanted a more narrow standard during the proceedings, which are well known for being unfavorable toward patentees.

What standard of review is used during the proceedings is really irrelevant. Once your patent is pulled into one of these proceedings, the Patent Office is most likely going to invalidate most if not all of your patent - under whatever standard they apply.

The real issue here is that these PTO proceedings are unconstitutional because they take private property (patents) outside of the court system. If you get a patent, then the law since late 1800’s says that it is your private property. As private property, it can’t be revoked by the executive branch and is only subject to being taken away through the judicial system.

Unfortunately for the Patent Office, the Cuozzo win will likely be short lived as two new cases are up for review by the Supreme Court challenging the constitutionality of the entire inter partes review framework: Cooper and MCM. Cooper asks the Court to limit any Patent Office decisions as being advisory to a federal court judge. MCM asks the Court to outright invalidate the entire inter partes review.

We should know within a couple of months whether the IPR framework will remain or whether it will be scaled back.

If it isn’t scaled back, then there are many options for patent owners to minimize the downside risks of IPRs. We’ll save those for another post in the event that I’m wrong and IPRs are maintained by the Courts.

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Supreme Court Revives Treble Damages: Halo

Jim Ruttler, Patent Attorney

Posted Tuesday, June 14, 2016 by Jim Ruttler

In a significant victory for innovators, the U.S. Supreme Court this week made it easier for patent owners to obtain treble damages for infringement. Since 2007, the Federal Circuit Appeals Court and the lower District Courts have been applying a strict standard for treble damages. Essentially, they required clear and convincing evidence of willful infringement without any reasonable defense. Of course, it was easy for most patent litigators to concoct some reasonable defense after the fact during trial, so even the most egregious willful infringement avoided treble damages.

However, the Supreme Court has laid this test to rest and changed the rule to permit the lower District Courts considerable discretion in determining whether to avoid penalizing treble damages. The new test requires only that the case be out of the ordinary considering the behavior and actions of the infringer at the time of infringement. The standard has been lowered to preponderance of evidence (more likely than not) and infringers can’t escape by producing some reasonable defense later during trial. Furthermore, the District Court’s decision to institute treble damages is entitled to significant deference during any appeal of the damage award.

In short, this is a significant pro-patent change in the law. Now, any infringer who knows about a patent and the existence of infringement will have the potential for a very heavy toll of 3 times the total damages and the possibility of attorneys fees.

We are currently waiting for the decision by the Supreme Court in Cuozzo, which will likely result in significant limitations on the inter partes review proceedings at the Patent Office, further increasing the strength of patents. Also, the Supreme Court should be deciding whether to take up Cooper and MCM to possibly declare the entire inter partes review proceedings as unconstitutional.

My expectation is that the Supreme Court will limit inter partes review proceedings to be mini-court proceedings which apply the same post-grant court standards. I think also that the inter partes review proceedings will be held constitutional, so long as all the parties consent to the Patent Office’s jurisdiction. This will effectively permit parties to choose whether to litigate via the Patent Office or the Courts, but will prevent patent owners from being drug into the Patent Office against their will.

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News and Announcements

Friday, June 24, 2016
Supreme Court Patent Cases to Watch learn more +
Tuesday, June 14, 2016
Supreme Court in Halo: Treble Damages are Back learn more +
Sunday, May 15, 2016
Federal Circuit Confirms Software Eligibility learn more +