Friday, October 24, 2014

Where Have The Trademark Cases Gone?

A review of the annual case filing statistics published by the Office of Federal Courts reveals that new trademark infringement filings in federal courts have been dropping while new patent and copyright filings have been increasing.

New patent case filings have more than doubled between 2009 and 2013, and new copyright filings have almost doubled since 2010. But trademark filings in federal courts reached a plateau in 2010 and have been decreasing since. Indeed, new copyright filings overtook new trademark filings in 2013 for the first time.

In a few months, the Office of Federal Courts will publish its new statistics for the period through September 30, 2014, and it will be interesting to see if these trends continue.

For the year ending September 30, 2013, the report identifies the following top five federal districts for new filings of copyright, patent and trademark claims:

A. New Copyright Cases:
  1. California Central:     541
  2. Illinois Northern:        321
  3. New York Southern:  229 
  4. Colorado:                   223
  5. Michigan Eastern:     158
B. New Patent Cases:
  1. Delaware:               1,492
  2. Texas Eastern:        1,386
  3. California Central:      505
  4. Virginia Eastern:        223
  5. Illinois Northern:        217

C. New Trademark Cases:
  1. California Central:      507
  2. New York Southern:  217
  3. Florida Southern:       210
  4. Illinois Northern:         209
  5. New Jersey:               126
The California Central federal district appears to be the most balanced in terms of the close number of new patent, copyright and trademark filings. Delaware and the Eastern District of Texas are the most out of balance, with their IP focus almost completely on patent cases.

Thursday, October 23, 2014

The Separate Accrual Rule in Copyright

In its decision today, the Seventh Circuit adopts a statue of limitations rule for copyright claims that many other courts have applied. The limitations test for copyright claims is not whether a lawsuit is filed by plaintiff within three years of discovery of an act of infringement. Rather, in copyright, a court looks to whether any claimed acts of infringement occurred within three years of filing the complaint. 

Today's opinion in Chicago Building Design, PC v. Mongolian House, Inc. deals with a pretty typical infringement claim relating to architectural plans. The plaintiff claims to have created architectural plans that the defendant copied and distributed as its own. Plaintiff had an inkling in 2008 that its plans were being infringed by defendant. Plaintiff saw what appeared to be a copy of its plans laying about at Chicago building permit offices, labeled with another architect's name. Plaintiff requested to see a copy of the suspect plans, but Chicago refused to provide a copy, claiming that the plans were exempt from disclosure. Plaintiff eventually filed its copyright infringement claim in 2012.

The statute of limitations for a copyright claim is three years. The district judge held that plaintiff was on inquiry notice in 2008, and that the statute of limitations began to run at that time. As such, the district judge ruled that the lawsuit was filed outside the three year window. The case was dismissed. But the Seventh Circuit disagreed, pointing out that the limitation analysis in copyright looks to whether acts of infringement occurred within three years of filing the complaint. The fact that an act of infringement occurred more than three years prior to commencement of the action is not the test. This is so because each act of infringement starts a new limitations period. And because plaintiff alleged that some acts of infringement occurred within three years of filing the complaint, the case should not have been dismissed.

The Seventh Circuit also determined that it is inappropriate to view a series of infringing acts as one, grand continuing infringement originating from a common, initial source. The fact that the initial act occurred outside of the three year look-back period does not prevent a copyright claim against related acts of infringement that occur within the three year period.

Wednesday, October 22, 2014

Revised Definition of Copyright Claimant: Can't Claim It If You Don't Own (All Of) It

The Copyright Office is amending its rules relating to who can apply for a copyright registration. The current rule permits certain classes of claimants, defined as:
  1. The author of the work,
  2. The person or entity that has obtained ownership of all rights to the work belonging to the author, and
  3. The person or entity that obtained from the author the contractual right to claim legal title to the copyright in the application.
The Copyright Office has published its notice of rulemaking to eliminate the third element set out above. That is, once the proposed amendment to the definition of claimant becomes effective, only the author, or a person or entity that has obtained all of the rights to the work from the author, can be a copyright claimant in order to apply to register a copyright. 

So, if an applicant seeks to obtain a copyright registration, the applicant must own all rights of authorship and not merely the contractual right to claim title to the copyright in the application. Excluded from the definition of permitted claimant will be assignees or devisees from the author or copyright owner who do not receive the entirety of the copyright interest. For example, excluded from the revised definition of claimant is a lender that takes a conditional security in software code under development containing the permitted right to apply for copyright registration. To become a successful claimant, the entirety of the copyright rights must transfer to the assignee and not merely the right to own the registration.

A person or entity that has the contractual right to apply for a copyright registration, or the right to own title to an unregistered copyrighted work, will no longer be able to apply for copyright registration in the work. In order to assure that an assignee has the right to apply for registration of copyright in an unregistered work, drafting appropriate language in a transfer document becomes key.

Tuesday, October 21, 2014

Digital Course Packets At College Can be Infringing

The Eleventh Circuit spent over a hundred pages explaining why digital course packets, prepared by college professors for downloading by students, may infringe the copyright in the copied material. The opinion is here. Several academic publishers sued Georgia State for failing to obtain consent and pay license fees when professors copied portions of copyrighted material for downloading by students. These digital course packets supplanted traditional paper course packets, for which GSU did obtain consent and pay a license. The appellate court spent considerable effort setting out the law of fair use and the interplay of fair use principles. Indeed, the opinion can be used as a copyright fair use treatise.

The concurring opinion summed it up best, however, by explaining that in a fair use analysis, this "case reveals the critical need to see the 'big picture' when attempting to determine what constitutes fair use of copyright work. * * * analyzing fair use, and after applying traditional common law principles to the use at issue here, this is rather a simple case."

This case does not involve an isolated event of a professor copying a single copyrighted work, or a one-time use of copyrighted material. Rather, the case involves a university-wide practice of using digital course packs, for which the university refused to pay a license, as a substitute for paper course packs, for which the university did pay a license. "This was done for the vast majority of courses offered at GSU and, as will be seen, it was done primarily to save money."

The majority opinion, in excess of 100 pages, analyses the nuances of copyright fair use in considerable detail as applied to academic use of course packs containing copies of copyrighted material. But as pointed out by the concurring judge, stepping back to take in the big picture can produce a much simpler, more direct, and more accurate result.

Trademark Protection for Food? It Doesn't Pass The Smell Test!

The federal court in Houston ruled yesterday that the flavors of Italian cooking, and the arrangement of Italian food on a plate, cannot be protected under trademark law. The opinion is here. The plaintiff, New York Pizzeria, Inc., argued that the flavors created by its pasta and pizza are protectable trademarks. It also argued that the plating of its foods -- that is, the appearance of its baked ziti, eggplant parmesan and chicken parmesan -- are protectable trade dress, But the court determined that food flavor is a functional element of food and, therefore, unprotectable.

"But the other main attribute of food is its flavor, especially restaurant food for which customers are paying a premium beyond what it would take to simply satisfy their basic hunger needs. The flavor of food undoubtedly affects its quality, and is therefore a functional element of the product."

The court also determined that while it is theoretically possible for the arrangement of food on a plate to be protectable as trade dress, the plaintiff's burden is very high. Only if plating is inherently distinctive or has acquired secondary meaning -- when plating serves no functional purpose -- can there be a potential infringement claim, but only if there is a likelihood of consumer confusion. The court denoted this plating claim as representing a "very high standard."

Wednesday, June 13, 2012

2012 Millennium Technology Prize

Linus Torvalds
The Technology Academy of Finland has awarded its 2012 Millennium Technology Prize to co-laureates Linus Torvalds of Oregon and Shinya Yamanaka of Japan. Many consider the Millennium Technology Prize to be on a par with the Nobel prize, but focusing on the development of new technology. Torvalds won a share of this year's prize in recognition of his development of the Linux kernel, the core of the open source software movement. Dr. Yamanaka was awarded the prize for his discoveries in stem cell development.

Quoting from the Finish Academy's announcement regarding Torvald's accomplishment:
One of the most important elements of the system, which he still writes code for from his Oregon home, as far as its creator is concerned, is that it should be open source software, publicly licensed for anyone to use. “I think open source is so important, it is basically taking the scientific approach of building on top of the openly published work of others, and applying it to software. And software is too important in the modern world not to be developed that way.”
Congratulations to both!
Shinya Yamanaka

Tuesday, June 12, 2012

An Example Of Bad Patent Quality

The ability of an economy to grow is related to the restraints on development. Particularly important, restraints come each day from the Patent Office in the form of newly issued patents.In 2011, for example, the U.S. Patent Office issued 247,713 patents of all types, representing an average of 678 new patents issued each day, or 28 new patents each hour of every day.

So long as the new patents are consistent with the requirements of the Patent Act -- that is, so long as the patents are good patents -- then the economic restraint that comes from each new patent is hopefully offset with the societal value inherent in the patented invention.

But certainly not all patents are good patents. Some are bad, and the bad patents restrain the economy without benefiting the greater good in a manner consistent with the requirements of the Patent Act. Are there really bad patents? You bet. Consider this one:
The above Patent No. 6368227 (issued on April 9, 2002) grants a monopoly to a "Method of Swinging on a Swing." The inventor, Steven Olson of St. Paul, Minnesota, claims to have invented a "a new and improved method of swinging." Reading carefully the patent claims confirms to everyone but the most naive that this invention has been practiced by all of us years -- indeed, decades -- ago in our backyards. So why did the Patent Office issue this patent in the first place? No idea, but the good news is that it only took about a year for the Patent Office to reexamine the patent and cancel all claims (reexamination certificate dated July 1, 2003).

Or, consider this patent:
Pat. No. 5443036 was issued August 22, 1995 for a "Method of Exercising a Cat" by having the cat chase a beam of light. Many cat owners have used a light for this purpose, and many cats understand what it means to chase a light beam. Perhaps these cats know more than the examiner who approved this patent.

That these bad patents should never have been issued is certain to most of us. That the quality control of the Patent Office allowed these patents to issue should be shocking and upsetting to all of us. Not only does it cost the taxpayers money for the Patent Office to issue obviously bad patents, but the economy is not helped  when bad patents restrain economic growth. Bad economy, bad Patent Office.

Toward An Online Bill Of Rights

Sen. Wyden (D-Ore.) and Rep. Issa (R-Cal.) have been vocal advocates against last year's Congressional steamroller that attempted to enact the Stop Online Piracy Act (SOPA) and the Pro IP Act (PIPA). The proposed legislation sought to impose government supervision on the use and function of the Internet. Loud public criticism stopped the steamroller, but Wyden and Issa believe that it may only be a matter of time before renewed energy becomes focused on enhanced Internet regulation.

In order to help focus the contours of public discussion for a free Internet, Wyden and Issa propose the development of a Digital Citizen's Bill Of Rights. Their belief is that this statement will establish minimum doctrinal standards to prevent the regulation of the Internet to fall below a base set of rights. Here are their proposed basic rights for the Internet:
1. Freedom - digital citizens have a right to a free, uncensored internet
2. Openness - digital citizens have a right to an open, unobstructed internet
3. Equality - all digital citizens are created equal on the internet
4. Participation - digital citizens have a right to peaceably participate where and how they choose on the internet
5. Creativity - digital citizens have a right to create, grow and collaborate on the internet, and be held accountable for what they create
6. Sharing - digital citizens have a right to freely share their ideas, lawful discoveries and opinions on the internet
7. Accessibility - digital citizens have a right to access the internet equally, regardless of who they are or where they are
8. Association - digital citizens have a right to freely associate on the internet
9. Privacy - digital citizens have a right to privacy on the internet
10. Property - digital citizens have a right to benefit from what they create, and be secure in their intellectual property on the internet
In my view, while a free Internet is important, so to is the freedom from harmful and illegal conduct that occurs on the Internet. A parent whose child is abused by cyberbullies will feel the need to provide some level of protection for improper Internet use, particularly when the actor resides in a foreign state that provides little or difficult legal protections. The same holds true for Internet purveyors of counterfeit goods, and other similar wrongful conduct. The notion of a free Internet is appealing, but the practical problems associated with undeveloped or difficult legal jurisdictions around the world provide, it seems to me, a practical impediment to a completely free Internet. When a person in a foreign state that provides little legal support against wrongful Internet usage can create international harm with little practical recourse, then a completely free Internet will not work.

Tuesday, May 29, 2012

An Offensive Vodka Label

An Ogden, Utah distiller, Ogden's Own Distillery, is having a problem distributing its vodka in the state of Idaho. After obtaining approval from ATF (Bureau of Alcohol, Tobacco, Firearms & Explosives) for its label, and after obtaining federal trademark registration for its mark FIVE WIVES, the distiller has encountered the sensitivities of Idaho's liquor division.

Idaho will not permit the distribution of Five Wives vodka because the concept "is offensive to a prominent segment of our population." There is no explanation of what this means, how it was determined, or what specifically about the product is offensive to the prominent segment. The problem cannot lie with the vodka itself, since Idaho permits the sale of many other brands of vodka. The shape of the bottle cannot be the problem, one would think. So, the only remaining option centers on the label. But ATF has determined that the label is fine, and the PTO (which is prohibited from registering a mark that is immoral or scandalous) has registered FIVE WIVES as a federal trademark. So, what can it be that has the Idaho liquor division so intoxicated?