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Thinking Inside the Box

Spurred on by reports of US companies fleeing overseas to avoid high US corporate tax rates, the idea of developing a “patent box” program similar to programs recently adopted in several European countries has surfaced on this side of the pond.  A “patent box” offer companies lower tax rates on income derived from locally based innovation.  The UK recently announced that their patent box program has been working as anticipated and is attracting additional corporate investment in the UK. There are at least eleven developed countries that either have patent box programs or are considering legislation to adopt them.  The Organization for Economic Cooperation and Development is expected to endorse patent box programs such as the one in the UK, putting further pressure on the US to respond with more favorable international tax laws.  With an eye on such developments, the US House Ways and Means Committee has released a…

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Carstens & Cahoon, LLP Intellectual Property Scholarship – $750

Carstens & Cahoon, LLP has partnered with the JL Turner Legal Association Foundation to offer a $750 scholarship to a diverse law student interested in Intellectual Property. The following criteria are to be considered: Science or Engineering undergraduate degree (strongly preferred) Demonstrated interest in Intellectual Property Law (courses, seminars, club memberships, etc…) Connection to DFW and/or Intent to practice in DFW US Citizen or permanent resident Current law student at accredited law school In good academic standing (verified with current transcript) Not yet a licensed attorney (either enrolled in law school or studying for bar exam) Current Resume ESSAY: please describe your interest in IP and your desire to practice law in DFW or Texas (1 page maximum) The DEADLINE TO APPLY is 09/30/15, email or mail application materials to Kandace Walter. The scholarship recipient will receive one ticket and an additional complimentary ticket for a guest to the 2015 JL Turner Legal Association…

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Akamai-Redux

On remand from the U.S. Supreme Court, the Federal Circuit – en banc, today held, “on the facts of this case, that liability under § 271(a) can also be found when an alleged infringer conditions participation in an activity or receipt of a benefit upon performance of a step or steps of a patented method and establishes the manner or timing of that performance.”  (This unanimous opinion en banc,  replaces the May 13, 2015 panel opinion.)  The court articulates a two-part test to determine direct infringement of a method patent in the context of multiple actors:  “(1) where that entity directs or controls others’ performance, and (2) where the actors form a joint enterprise.”  The opinion expressly finds that the foregoing test is not limited solely to principal-agent relationships, contractual arrangements, and joint enterprise, and overrules prior decisions to the contrary. The Federal Circuit further held that with respect to…

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Hague Agreement Provides Smoother Path to International Design Protection

Beginning on May 13, 2015, a new and potentially cost-effective process for obtaining design protection in multiple countries became available.  Under the Hague Agreement Concerning International Registrations of Industrial Designs (the “Hague Agreement”), a single application filed in a Hague Agreement contracting state can be used to obtain design protection in any other contracting state.  If an applicant desires protection in multiple contracting states, the benefits can be significant. Before the Hague Agreement, applicants were generally required to hire local counsel in each and every country where design protection was desired.  Local counsel would prepare the design application and related documents according to local law and practice, and pay the filing fees associated with the registration in their local currency.  Although it was possible to claim priority to earlier filed applications in most countries under the Paris Convention, it was not possible to avoid paying local counsel to prepare and…

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PTAB Grants Motion to Amend Patent Claims in IPR, Finds Patent Valid with Substitute Claims

The Inter Partes Review (IPR) procedure enacted by Congress in the America Invents Act (AIA) a few years ago has quickly become a favorite tool for use by those accused of infringement of a patent as well as those seeking to expand the freedom to operate prior to product launch.  A successful IPR results in some or all of the claims of the patent being invalidated.  Some have commented that IPRs are where patents go to die due to the relatively high percentage of patents that have been invalidated to date. As a fallback to a challenge of invalidity in an IPR, it is important for the patent owner to consider potential substitute claims that might help avoid a finding of invalidity.  Patent Owner Neste Oil discovered how important this is in a recent decision by the Patent Trial and Appeal Board (PTAB) finding that all of the claims of…

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Solving Alice

The Supreme Court’s abstract ideas exception to categorical subject-matter eligibility under 35 U.S.C. § 101 has become the bane of computer-implemented inventions.  In June of 2014, the Supreme Court, in Alice Corp. Pty. Ltd. v. CLS Bank International, affirmed the framework for patent-eligibility initially set out in Mayo Collaborative Services v. Prometheus Laboratories, which includes the following two steps: Step 1: Determine whether the claim is directed to an abstract idea Step 2: Examine the elements of the claim to determine whether it contains an “inventive concept” sufficient to “transform” the claimed abstract idea into a patent-eligible application. Despite the Alice Court’s clarification of the proper test for patent eligibility[1], it remains exceedingly difficult to determine whether a particular computer-implemented invention will ultimately be deemed patent eligible.  The Alice decision has led to dramatic changes in how 101 issues are resolved by lower courts and the USPTO.  For example, observers…

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IPR’S Approaching Third Birthday

An “IPR” (a/k/a “Inter Partes Review”) is a relatively new procedure at the USPTO to challenge the validity of a U.S. Patent.  It has proven to be a very effective tool that can be used in response to litigation, and also to assist in obtaining leverage in licensing negotiations with competitors. The IPR procedure originated with the America Invents Act (“AIA”) which ushered in the era for “first inventor to file” that became effective for U.S. patent applications on March 16, 2013.  The IPR is unquestionably the most popular of the new AIA post-grant proceedings available to challenge U.S. patents.  To date, over 2,400 Petitions for an IPR have been filed at the USPTO which must decide the case within 12 months from initiating the administrative trial.  In those cases for which final decisions have been issued, reportedly over 80% have invalidated patent claims.  This led the USPTO Patent Trial…

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Akamai: Demise of Tort-Based Joint-Actor Infringement

The Federal Circuit on May 13, 2015 issued its long-awaited opinion in Akamai Technologies, Inc. v. Limelight Networks, Inc. on remand from the U.S. Supreme Court with respect to the scope of “divided” or “joint-actor” direct infringement under 35 U.S.C. § 271 (a).  Akamai had argued in favor of a broad “joint-tortfeasor” based definition of direct infringement to include the circumstances in the context of a method patent where Limelight contracted with website “content providers” to allow them to perform certain modifications to their website related to a tagging functionality to facilitate the content stored by Limelight to be displayed on the website.  The Federal Circuit was unequivocal in its rejection of this rationale to support direct infringement: the statutory framework of 35 U.S.C. § 271 does not admit to the sweeping notions of common-law tort liability argued in this case…. In the 1952 Patent Act, Congress removed joint-actor patent…

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Supreme Court Finds Coca-Cola’s “Pomegranate-Blueberry Juice” is Deceptively Labeled

The Supreme Court unanimously found that a Minute Maid juice product of The Coca-Cola Company, labeled in large type as “Pomegranate Blueberry,” and depicting a pomegranate and blueberries prominently on the package, but containing only about 0.5% of these juices, is deceptively labeled.  While that might appear to be a “common sense” judgment based on juice content, the Supreme Court’s opinion reversed both the trial court as well as the Ninth Circuit Court of Appeals.  So, you might ask: “how did both of these courts get it so wrong and so contrary to common sense?” Strangely enough, it was not as simple as it might seem to arrive at the “common sense” result.  To get there, the Supreme Court had to careful parse a federal regulatory scheme. The plaintiff (POM Wonderful) and the defendant (Coca-Cola) pitted two federal statutes against each other to support their respective positions in the lawsuit….

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Tropic Ocean Airways: Don’t Draft your Complaint on the Beach

When a lawsuit is filed, a plaintiff must provide the factual and legal basis for the claims to avoid the case being dismissed.  How much detail must be provided was arguably changed significantly by a pair of U.S. Supreme court decisions, Twombly and Iqbal, decided in 2007 and 2009, respectively.  Before these two cases, the courts often repeated the rule that “a complaint should not be dismissed for failure to state a claim unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief.”  In Twombly, the Supreme Court retired this rule.  The Court reiterated the requirement of Rule 8, which requires only a “short and plain statement of the claim showing the pleader is entitled to relief.”  However, the Court went on to explain that while the complaint need not recite detailed factual allegations, the…

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The Movement Toward a Federal Trade Secret Protection Law

With the recent attention by the U.S. Congress and the U.S. Supreme Court to patent issues, the value of the IP protected as a trade secret may not be receiving the attention it deserves.  Various studies have suggested that the value of IP protected as a “trade secret” (such as the recipe for Coke) greatly exceeds the value of IP protected by patents.  Importantly, the protection afforded a trade secret lasts forever (or at least as long as the trade secret remains confidential); whereas the length of protection for a utility patent is generally 20 years from the earliest effective filing date for patent applications filed on or after June 8, 1995. While patents are governed by a single federal statutory framework at 35 U.S.C. § 101, et seq., including exclusive jurisdiction in the federal district courts for infringement disputes and most other matters related to patents, with all appeals…

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You’ve Worked Hard to Develop Your Brand, But Is Your Investment Protected?

Don’t let someone else steal your brand.  Imagine this: you’ve worked hard for about 10 years to develop your brand and name recognition.  After years putting in sweat equity, your business is finally starting to take off.  It might even be time to expand to a neighboring state.  There’s only one problem.  A couple from a neighboring state started up a similar business with a similar name about three years ago. Neither you nor the other couple were aware of each other.  Now that you’re ready to expand, you decide you should get a federal trademark registration for your business.  You’ve heard that the federal registration can give you nationwide protection for your mark.  In other words, you can get protection not just for your state, but for the entire United States.  Unfortunately, there are some exceptions, for example, if a competitor uses the mark in good faith in a…

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Alice Corp. and an “Abstract Idea”

In the recent Alice Corp. v. CLS opinion, the Supreme Court described a two-part “framework,” for making such a distinction between patents that claim the building blocks of human ingenuity and those that integrate the blocks into something more: Determine whether the claim(s) at issue are directed to a patent-ineligible concept, (is it an abstract idea?) and if so Examine the elements of the claim(s) at issue, individually and as an ordered combination, to determine whether the claim contains additional features or an inventive concept sufficient to transform the nature of the claim into a patent-eligible application. The problem with respect to prong no. 1 of the framework is the opinion does not define the “abstract idea” element.  The only guidance provided in the opinion is that where a patent claim is deemed to cover a long prevalent, fundamental economic practice it is considered as being directed to an abstract idea.  How one should determine…

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IP Trends We’ll Be Following in the Coming Year

As we transition in to a new year, we re-focus our efforts in certain trends in the area of intellectual property law.  Four trends are briefly discussed below. Data Privacy and Protection Big Data Growth and Use Post-Grant Patent Review via IPR Patent Subject Matter Eligibility after Alice Corp. v. CLS Bank  Data Privacy and Protection Recent thefts of celebrity images (including nude images) bring to the forefront of national attention the issue of data privacy and protection.   Since many of the images appeared to have been taken using mobile devices and stored in cloud-based databases, the reliability of security in these environments has been brought into question.  Other recent thefts have involved credit card data from major banks (Citibank, JP Morgan), major retailers (Target, Home Depot, Neiman Marcus), and credit card processors (Global Payments, Heartland Payment Systems).  These data breaches involved millions of credit and debit card accounts.  However,…

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Patent Eligibility after Alice v. CLS Bank

The U.S. Supreme Court recently issued its decision in Alice v. CLS Bank regarding the patentability of computer-implemented financial and other business methods.  The Court held that patents that attempt to claim simply an “abstract idea” implemented on a general purpose computer are not valid.  Although this is not actually a change in the law, it is a clarification of this evolving area of patent law.  And based on the sudden harsh treatment of computer-implemented method patent claims by both the Patent Office and the courts, combined with the current lack of guidance given to patent examiners for examining such claims, patent owners should not only address the claims of their currently pending applications, but they should also strongly consider revisiting their granted patents in this area for possibly reissuing those patents with revised claims in order to preempt potential challenges to their patents under the Alice decision.

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Should We be Watching for the New “Trade Dress” in the Fall Fashion Shows?

Not really.  Trademark law encompasses the subpart known as “trade dress.” When an average consumer can identify the source of a good or service by its look and feel, then this may be its trade dress.  The design or configuration of a product, the labeling and packaging of goods, and the décor or environment where services are provided can all be protected as trade dress.  Trade dress features must be distinctive and not functional. Examples include the shape of a Coca-Cola bottle, the red color on the sole of a Christian Louboutin pump, or the image of a horse-mounted polo player on a bottle of cologne, duffle bag, or shirt from Ralph Lauren.  Each of these examples are not functional to the item, but are distinctive in how they identify the source of the goods. When a company’s trade dress has achieved distinctiveness and is nonfunctional, it should be protected…

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Abstract Ideas – Are they Patentable?

Recently, the USPTO issued a memorandum to its Examiner Corps, entitled “Preliminary Examination Instructions in view of the Supreme Court Decision in Alice Corporation Pty. Ltd. v. CLS Bank International, et al.” At its core, the memo addressed subject matter eligibility of claims involving abstract ideas, particularly computer-implemented abstract ideas. Comments were submitted by AIPLA and IPO (two leading IP bar associations). The memo and the comments recognized the Alice decision did change substantive patent eligibility law or fundamental examination guidance.  However, the comments emphasized that Alice did not create a per se excluded category of business methods or software, or impose any special requirements for eligibility of business methods or software. The premise of the guidance is that abstract ideas are fundamental building blocks of human ingenuity and are not patentable—inventors must use those building blocks to construct their innovations. Examiners are tasked with evaluating whether (1) the claim is “directed to” an abstract…

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Copyright Law

The Transmit Clause gives copyright holders the exclusive right to transmit or otherwise perform a copyrighted work to the public by means of a device or process.

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Alice Decision

The Supreme Court affirmed the Federal Circuit’s decision in Alice Corporation v. CLS Bank holding that patents directed to schemes or methods of mitigating settlement risks in the exchange of financial obligations between two parties claimed unpatentable subject matter.  Although the patents recited system claims implementing the method on a computer system, the Supreme Court held that merely reciting a generic computer in the claims does not make an otherwise abstract idea patent eligible.  The decision re-affirms long-standing Supreme Court precedent with respect to the un-patentability of abstract ideas and reiterates the importance of drafting the patent application on such methods in a way that takes the claimed subject matter out of the abstract idea category and puts it into the implementation category.  Without an adequate disclosure of a specialized implementation, the patent application may be rejected by the patent office and, even if the application is granted, any patent obtained…

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An “Exceptional Case” Need Not Be so Very Exceptional Anymore

In a patent suit involving a patent covering an elliptical trainer exercise machine, the US Supreme Court significantly changed a long-established standard for awarding attorney fees to the prevailing party.  Under the old standard, the trial court had the discretion to order the losing party to pay the prevailing party’s attorney fees if it found that the case was “exceptional.”  A case was regarded as “exceptional” if it was “objectively baseless and brought in subjective bad faith.”  This is a tough standard to meet.  The Supreme Court has now lowered the bar so that an “exceptional case” is one that either “stands out from others” with regard to the party’s litigation position (considering the law and the facts of the case), or is litigated in an unreasonable manner.  The Supreme Court instructed that the trial court should look at the totality of the circumstances, and that there were no fixed…

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