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Archived updates for Friday, September 30, 2005

Unfair Import Investigations Requested for Scanners, Organ Locators, and Flash Memories

On September 23, 2005, Symbol Technologies, Inc. filed a "Section 337" unfair import complaint at the U.S. International Trade Commission. The complaint requests that an unfair import investigation be instituted involving "Certain Laser Bar Code Scanners, Scan Engines, Components Thereof and Products Containing Same." The proposed respondents are Metro (Suzhou) Technologies Co., Ltd., China and Metrologic Instruments, Inc., Blackwood, New Jersey. The complaint has been designated as confidential and assigned Docket No. 337-2446 for indexing in the Commission's database.

On September 28, 2005, Varian Medical Systems, Inc. and SAS PRAXIM, Inc. filed a "Section 337" unfair import complaint at the U.S. International Trade Commission. The complaint requests that an unfair import investigation be instituted involving "Certain Devices for Determining Organ Positions and Certain Subassemblies Thereof." The proposed respondent
is Resonant Medical, Inc., Canada.The complaint has been designated as confidential and assigned Docket No. 337-2447 for indexing in the Commission's database.

On September 29, 2005, Toshiba Corporation filed a "Section 337" unfair import complaint at the U.S. International Trade Commission. The complaint requests that an unfair import investigation be instituted involving "Certain Flash Memory Devices and Components Thereof, and Products Containing Such Devices and Components." The proposed respondents are Hynix Semiconductor, Inc., Korea and Hynix Semiconductor America, Inc,. California. The complaint has been designated as confidential and assigned Docket No. 337-2448 for indexing in the Commission's database.

Such complaints typically include an allegation of intellectual property infringement and a request that the infringing godds be excluded from entry into the United States. The Commission now has 30-35 days from the filing date of the complaints in which to decide whether to institute the investigation. Upon institution, the proposed respondent will be served with the Complaint via postal mail and an Administrative Law Judge will schedule discovery, conduct a trial, and issue a written "Initial Determination," usually within about 10 months. Due to the expedited nature of these proceedings, and availability of general exclusion orders affecting non-parties, it is important to notify any potential importers of similar products as soon as possible.

Click here for more information on the importance of monitoring these ITC investigations, and click here for a free audio-visual Internet presentation on "Unfair Import Investigations at the U.S. International Trade Commission."

For the latest details on a particular Section 337 investigation, or to arrange a free, in-person presentation on these (and/or other) intellectual property topics, contact me, Bill Heinze (Bill.Heinze@tkhr.com), at Thomas, Kayden, Horstemeyer & Risley in Atlanta, Georgia.
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TGIF for Renting your DVR on the Internet

The folks at http://www.rentmydvr.com/ want you to "Never miss your Favorite TV Show again!" According to their website:

Now you don't have to remember to program your DVR or VHS to record you
favorite TV show. With the Rent My DVR site you can simple hire someone that
will do the recording for you. Simply file a request on our site to have someone record for you and as soon as a new episode of your favorite show has been broadcasted, it is downloaded automatically to your computer and you can
watch it whenever you want. Record 5 TV shows for a Euro!

Make money by letting your DVR. If you would let your DVR to our users, please sign up for a recorders account.

Sign up today!

But, as pointed out by Joe Gratz on Corante's Copyfight Blog, "before submitting a recording request, the user must click a check-box next to the following statement:

"I assure [you] that I have an agreement with ABC that allows me to record this
show."
Ooooh, just wait until the folks at the American Brodcasting Company find out about this. . . .

Thank Goodness It's Friday,

--Bill Heinze
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U.S. Losing Support on Opposition to WIPO Development Agenda

According to William New writing for "Intellectual Property Watch" on September 29, 2005, the United States appears to be isolated in its insistence that discussions on the development agenda be moved to the WIPO Permanent Committee on Cooperation for Development Related to Intellectual Property (PCIPD). Reporting from the World Intellectual Property Organisation General Assembly running through October 6, new also adds

Developing countries have resisted the PCIPD proposal out of concern that it would marginalise the development agenda, which they argue cuts across core areas at WIPO.

The United States argued in a floor statement Thursday that WIPO has not ignored development concerns and that intellectual property does not hinder development. The earlier Intersessional Intergovernmental Meeting (IIM) meetings have not provided a forum for an in-depth examination of all proposals, and that no consensus has emerged on any of the proposals put forward in the IIM, the U.S. delegate said.

The U.S. further said it supports a “frank exchange of views” and work to respond to developing country needs, but that the IIM process “was a compromise, time-limited, and reached the end of its mandate at the end of July 2005.” The time has come for a permanent forum to discuss the issues, and the PCIPD would be the best as it could be easily converted, it said.

“Despite our belief that WIPO is not, and should not become, a core development body, we do support WIPO improving its efforts, within its core competencies to bring the benefits of IP to all of its member states,” the U.S. delegate said, adding that this could be added to the PCIPD mandate.

Get more details on the WIPO Genral Assembly from EFF's Depp Links Blog.
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Patent Reform Legislation Stymied by Damages Provision

According to Sarah Stirland writing for "Intellectual Property Watch" on September 29, 2005, the biggest remaining sticking point between the information technology industry and the biotechnology and pharmaceutical industries in the latest patent reform bill is its proposal to change the way courts award damages:

In testimony submitted to the House subcommittee, BSA’s Counsel Emery Simon
said that his group opposes the coalition’s proposal to change the legal language covering damages to cover “claimed inventions” rather than “inventive contributions.”

This change could allow patent holders to claim monetary damages based on the value of an entire new product, rather than the value of an inventor’s partial contribution to a product. But “we think the law is functioning well as it exists,” said Herb Wamsley, the Intellectual Property Owners Association’s executive director. “We have not seen any legal cases that demonstrate that the law doesn’t work. The proponents of ‘inventive contribution’ are trying to change the law in a way we don’t understand, but would appear to reduce the amount of patent damages and royalties than what we would have today,” he added.

While members of the House subcommittee earlier this month tried hard to bring industry representatives closer to consensus on the issue, it was clear that negotiations are going to be tough. BSA’s Simon warned legislators during his presentation to the subcommittee that “The support of our industry for this legislation should not be taken for granted.”

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EC Launches Consultations for State Aid on Innovation


The European Commission is launching consultations on improvements to EU state aid rules with regard to projects encouraging innovation. “Even though effective competition is the best tool to strengthen innovation and competitiveness in Europe, state aid can also play a very useful supporting role, " said Competition Commissioner Neelie Kroes. "In this consultation document, the Commission sets out for the first time its concrete ideas on ways to support innovation via state aid. It is also the first concrete implementation of the refined economic approach outlined in the State Aid Action Plan.”

The suggested improvements include rules for aid that funds innovation, criteria to help public authorities to target aid more effectively, clarifying the rules to increase legal certainty and simplification of the regulatory framework. The proposals for innovation aid cover six broad areas: innovative start-ups; risk capital; the integration of innovation into existing rules on state aid for research and development (R&D); innovation intermediaries; training and mobility between university research personnel and SMEs; and poles of excellence for projects of common European interest

Click here for answers to frequently asked questions on state aid for innovation, and click here for more on the European Commission's state aid action plan.
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Archived updates for Thursday, September 29, 2005

ITCTLA Annual Meeting with Circuit Justice Randall Rader

Mark your calendar now to attend the Annual Meeting of the ITC Trial Lawyers Association on Tuesday, Nov. 8, 2005. The meeting will feature a panel of presentations, followed by the Keynote Address of the Hon. Randall R. Rader, Circuit Justice, Court of Appeals for the Federal Circuit.

Registration will begin at 1:00 pm EST, followed by panel presentations from 2:00 - 5:00 pm, in the Main Hearing Room of the ITC. The reception will begin at 5:30, followed by dinner and Judge Rader's Keynote Address.

The West Coast video conference session is planned for Palo Alto, will begin at 11:00 am PST, and will include a catered lunch.

Seating will be limited for the dinner program and West Coast video conference, so please keep an eye out for the registration forms and program details that will be forwarded by email in the near future.
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Sams Presents TTAB Efficiency Initiative


John Welch writes in his TTABlog that U.S. Trademark Trial and Appeal Board Chief Administrative Judge J. David Sams presented the 2005 Midwest IP Institute with several initiatives that the TTAB is currently considering in an effort to make TTAB inter partes practice more efficient and effective:
  • Mandatory initial disclosures
  • Accelerated case resolution
  • Mandatory telephone conference before filing an unconsented motion
  • TTAB decisions and orders by e-mail rather than paper
  • Service by e-mail
  • Service of opposition on applicant
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FTC Chairman Addresses Patentee "Hold-Up" of Standards-Setting Organizations


In a speech entitled "Recognizing The Procompetitive Potential Of Royalty Discussions In Standard Setting" (to Stanford University on September 23, 2005), U.S. Federal Trade Commission Chairman Deborah Platt Majoras provided her perspectives on standard setting and competition:

. . . While standard setting potentially provides tremendous benefits for consumers, it also potentially presents competitive issues that cannot be ignored. The most dangerous of these, of course, is the potential that a standard-setting effort will be used as a mechanism for competitors to fix prices, allocate markets, or boycott a competing firm or technology. Fortunately, we have not seen frequent instances of naked collusion in the standard-setting context. Still, SSOs should continue to take precautions to avoid facilitating collusion or other anticompetitive agreements.

What has become more common, though, is the potential for an intellectual property rights owner to "hold up" other members of a standard-setting organization after a standard has been set. If, at the start of the process, any one of a number of competing formats could win the standards battle, then no single format will command more than a competitive price. But standardization can change that dynamic. After the standard is chosen, industry participants likely will start designing, testing, and producing goods that conform to the standard – that is, after all, the whole idea of engaging in standard setting.

Early in the standardization process, industry members might easily be able to abandon one technology in favor of another. But once the level of resources committed to the standard rises and the costs of switching to a new technology
mount, industry members may find themselves locked into using the chosen
technology. In that case, competition for the standard ends (at least for a time, until, for example, the next generation of technology supplants it). In other words, before lock in – or "ex ante" – technologies compete to be the standard, and no patent-holder can demand more than a competitive royalty rate. After lock in – or "ex post" – the owner of the chosen technology may have the power to charge users supra-competitive royalty rates -- rates that may ultimately be passed on to consumers in the form of higher prices.

. . . [S]ome experienced members of SSOs and commentators have suggested that owners of patented technology should be permitted to state their intended royalty rates ex ante, that is, before the standard is set. Indeed, as some have suggested, if owners stated their royalty rates upfront, then price could become part of the competition among technologies for incorporation into the standard. Others have proposed that permitting SSO members to go further and engage in joint ex ante royalty discussions (perhaps even auctions) would also mitigate the hold-up problem.9 Such discussions would allow SSO members to collectively discuss – before lock in ("ex ante") – a royalty rate (or at least a maximum rate) for incorporated technology.

Both of these proposals, however, have raised concerns that agreed rates are exercises in collective price-fixing and therefore run afoul of the antitrust laws’ per se ban on price fixing. Consequently, some SSOs and their participants have hesitated to allow unilateral announcements of royalty rates by, let alone ex ante joint royalty discussions with, firms that own the technology being considered for incorporation into the standard, settling instead for rules that demand RAND terms for members.

While the antitrust concerns are understandable, they may have unduly prevented announcements of pricing intentions or royalty discussions that may, in fact, provide procompetitive benefits. First, a patent holder’s voluntary and unilateral disclosure of its maximum royalty rate, like most unilateral conduct, is highly unlikely to require antitrust scrutiny. Unilateral announcement of a price is, by definition, not a collective act subject to per se condemnation or even review under Section 1 of the Sherman Act, and it is hard to see how announcing one’s price before sale (without more) could amount to exclusionary conduct under Section 2.

Second, joint ex ante royalty discussions that are reasonably necessary to avoid hold up do not warrant per se condemnation. Rather, they merit the balancing undertaken in a rule of reason review. We would apply the rule of reason to joint ex ante royalty discussions because, quite simply, they can be a sensible way of preventing hold up, which can itself be anticompetitive. Put another way, transparency on price can increase competition among rival technologies striving for incorporation into the standard at issue. They may allow the "buyers" (the potential licensees in the standard-setting group) to get a competitive price from the "sellers" (the rival patentees vying to be incorporated into the standard that the group is adopting) before lock in ends the competition for the standard and potentially confers market power on the holder of the chosen technology. (Indeed, a few SSOs do this already: SSOs that require members to license incorporated technology to each other royalty-free have already, in effect, collectively negotiated a royalty arrangement.)

If joint ex ante royalty discussions succeed in staving off hold up, we can generally expect lower royalty rates to lead to lower marginal costs for the standardized product and lower consumer prices. By mitigating hold up, joint ex ante royalty discussions might also make possible the more timely and efficient development of standards. A reduction in ex ante uncertainty on royalty rates may "reduce the extent to which litigation is needed to resolve issues relating to patent and standards." Joint ex ante royalty discussions also could prevent delays in the implementation of the standard resulting from ex post litigation (or threats of it), which may involve "inefficient allocation of resources intended for innovation."

In a rule-of-reason analysis, of course, these possible procompetitive benefits are weighed against the risk of anticompetitive harms. In particular, some have raised concerns that the SSO members could use joint ex ante royalty discussions to force patent holders to offer royalty rates below the competitive level. The fear is that innovators may then reduce new investments in their research and development efforts.

While theoretically possible, this risk is unlikely to be a frequent practical concern. If the SSO members jointly lack buying power, they would not be able to impose a lower-thancompetitive rate. Further, SSO members may have incentives to temper their instinct to drive royalty rates too low. Manufacturing members of the SSO may recognize that patent holders (particularly non-manufacturing patent holders) who fear that the group will demand anticompetitively low royalty rates may choose not to join the SSO in the first place. If they do not join, then it will be harder for the
members to know about the patent holders’ potentially relevant intellectual
property before setting a standard – exposing the group to a greater risk of
demands for high royalty rates from a non-member in the end. Moreover, concerns
about collective buyer power may be minimal when the patent holders are
themselves manufacturers. Such patent holders may be willing to license their
technology for very little – perhaps even for free – in exchange for gaining the
first-mover advantage in manufacturing the standardized product.

It may also be appropriate to consider whether joint ex ante royalty discussions are reasonably necessary to mitigate hold up. In such an analysis, we likely would consider whether an uncoordinated series of bilateral negotiations between patentees and individual would-be licensees would be equally capable of mitigating hold up, or whether bilateral negotiations actually frustrate the necessary collective evaluation of which technology alternative is preferable, taking into consideration both the merits of the technologies and their prices.

Joint ex ante royalty discussions, of course, can offer an opportunity for SSO members to reach side price-fixing agreements that are per se illegal. If in conducting joint ex ante royalty discussions, manufacturing rivals cross over the line from discussing the price of technology they will "buy," if they choose a particular standard and start discussing – and fixing – the price of the products they sell, summary condemnation is almost certainly warranted. In fact, joint ex ante royalty discussions might make such collusion cheaper: the costs of gathering together and
deciding on a common plan could be spread over plans associated with both buying and selling.

Concerns about legitimate royalty discussions bleeding into such dangerous territory may dissuade some groups from conducting them in the first place. But those risks are not cause for declaring the entire enterprise per se illegal, especially since some standards developers may already have extensive experience managing this risk.

Of course, even absent antitrust concerns, SSO members may refrain from such discussions for business reasons alone. Some members of the standard-setting community apparently believe that joint ex ante royalty discussions are time-consuming, costly, and unproductive. Discussions may prove too complex, involving important non-price terms and heterogeneous royalty rates. Moreover, SSO members may feel that productive joint ex ante royalty discussions demand the skills of especially talented business people who understand the complicated legal, engineering, and business matters at issue.

Indeed, at the FTC/DOJ Hearings on Competition and Intellectual Property Law, one panelist testified that his large company simply does not have enough of such people to attend "the 300 different standards consortia or standards bodies" in which his company participates. Joint ex ante royalty discussions may prove costly in another way: some SSOs and their members want to concentrate on the difficult job of choosing the technically best standard, and deem cost considerations to be a distraction.

Thus, by pointing out the potential for joint ex ante royalty discussions to mitigate or eliminate the hold-up problem, I do not mean to suggest that such discussions in SSOs are required. I simply offer my view that conducting legitimate joint ex ante royalty discussions does not warrant per se condemnation.

Antitrust concerns should never be taken lightly; neither, however, should the benefits that the setting of standards can bring to consumers. Fortunately, our ntitrust laws and enforcement program are flexible enough to permit procompetitive standard-setting activity. I appreciate the opportunity to discuss these important issues with you today. Thank you.

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Claim-Type Differentiation for Dummies

Contact me for a higher-resolution copy of this "poster presentation" to the 2005 Corporate Patent Seminar entitled "Structure, Function, and the Importance of Claim-Type Differentiation," or view a more-detailed presentation on this topic at http://www.aplf.org/events/roundtables/2003-11-20.shtml
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A Postcard from the Solaia Patent Odyssey


Philip Brooks' "Patent Infringement Updates" points a September 26, 2005 article in the Star Tribune by Dee DePass describing the experience of nine companies that joined together to defend allegations of patent infringement from a reputed patent troll:

Initially, each of the nine companies hired an independent counsel, sought
software specialists and met with plant managers to verify that the patent in
question -- No. 5,038,318 -- was not employed in their automated manufacturing
processes. The patent, which Solaia purchased in 2001, was related to a
spreadsheet software device for communicating real-time data between automated
machines.

In June 2003, seven of the Minnesota manufacturers [filed a declaratory judgment action against] Solaia in U.S. District Court in Minnesota.

Solaia tried and failed to consolidate the Minnesota lawsuit into others being tried in Chicago. Solaia's law firm, Niro & Scavone, then took the unusual step of suing Fish & Richardson, accusing the law firm of soliciting manufacturers not to honor Solaia's patent. That case was dismissed this year. "I have never heard of any lawyer being sued because they were representing us. That was a new one," Ubel said. "Our group just had a good chuckle and we welcomed Fish & Richardson" to the regular meetings at the Minneapolis Club. By sticking together, the firms made a strategy of "divide and conquer" impossible, said Peyton of the National Association of Manufacturers.

"They want to say, 'Oh we are heroes because we banded together and took on
the evil giant.' That is nonsense," said Ray Niro, the Solaia attorney. "All they did was wait until there was a related decision down in Chicago that they perceived as being beneficial to them. And then Solaia agreed that they would defer based on that decision. Absolutely it was Solaia's decision. They didn't have to dismiss the case."

"It really blows my hot buttons to hear all this troll nonsense. Those who talk about trolls are know-nothings. They have no background dealing or enforcing patents," said Ray Niro, the Solaia attorney at Niro, Scovone, Haller & Niro who sent the letter to Valspar. He said his style of patent litigation helps cash-poor inventors protect their intellectual property, adding that big companies are not the only ones entitled to patent protection.

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Archived updates for Wednesday, September 28, 2005

USPTO to Require Translation of Foreign-Language Provisional Applications

Effective November 25, 2005, the United States Patent and Trademark Office is amending the rules of practice (70 FR 56119) on September 26, 2005) to require that
  1. a copy of the English translation of a foreign-language provisional application be filed in the provisional application if a nonprovisional application claims the benefit of the provisional application; and
  2. a copy of documentary evidence supporting a claim of ownership must be recorded in the Office’s assignment records when an assignee takes action in a patent matter; and
  3. separate copies of a document be submitted to the Office for recording in the Office’s assignment records, each accompanied by a cover sheet, if the document to be recorded includes an interest in, or a transaction involving, both patents and trademarks.
The changes apply to any paper, application or reexamination proceeding filed in the Office on or after November 25, 2005. For applications claiming priority to a non-English provisional application, a translation of the provisional application and a statement that the translation was accurate required by 37 CFR 1.78(a)(5)(iv) will not be required to be filed in the provisional application, if the translation and statement were filed in the nonprovisional application before November 25, 2005.
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Jury Testimony on Claim Construction Improper

In Cytologix Corp. v. Ventana Medical Systems, Inc. (Fed. Cir.; Sepetmebr 21, 2005), the court conclyuded that CytoLogix failed to present substantial evidence of infringement of claim 13 of the ’693 patent because it did not conduct a structural analysis of means-plus-function limitations in that claim:
The "temperature controller" limitation of claim 13 is a means-plus-function limitation as defined by 35 U.S.C. § 112, ¶ 6. Infringement of a means-plus-function limitation "requires that the relevant structure in the accused device . . . be identical or equivalent to the corresponding structure in the specification." Odetics, Inc. v. Storage Tech. Corp., 185 F.3d 1259, 1267 (Fed. Cir. 1999). To establish infringement under § 112, ¶ 6, it is insufficient for the patent holder to present testimony "based only on a functional, not a structural, analysis." Alpex Computer Corp. v. Nintendo Co., 102 F.3d 1214, 1222 (Fed. Cir. 1996). Here, CytoLogix failed to identify the structure in the specification that is the "temperature controller means" and compare it to the structure of the accused device. Accordingly, because CytoLogix failed to present substantial evidence of infringement of claim 13 of the ’693 patent, the jury verdict of infringement of claim 13 must be reversed.

Instead of offering such structural analysis, the parties agreed to have there experts testify before the jury on claim constrction:

We note that in this case the parties agreed, contrary to the district court’s wishes, not to have a Markman hearing, and that the claims were not construed until the close of evidence. This was not erroneous since we have held that the district court has considerable latitude in determining when to resolve issues of claim construction. See Jack Guttman, Inc. v. Kopykake Enters., Inc., 302 F.3d 1352, 1361 (Fed. Cir. 2002) ("District courts may engage in a rolling claim construction, in which the court revisits and alters its interpretation of the claim terms as its understanding of the technology evolves."). However, by agreement the parties also presented expert witnesses who testified before the jury regarding claim construction, and counsel argued conflicting claim constructions to the jury. This was improper, and the district court should have refused to allow such testimony despite the agreement of the parties.

The risk of confusing the jury is high when experts opine on claim construction before the jury even when, as here, the district court makes it clear to the jury that the district court’s claim constructions controlcase the parties agreed, contrary to the district court’s wishes, not to have a Markman hearing, and that the claims were not construed until the close of evidence.

Although in this case there is no ground for reversal since there was no objection to the expert testimony as to claim construction, it appears that the conflicting expert views as to claim construction created confusion and may have led to a verdict of infringement with respect to the asserted claims of the ’061 patent that was not supported by substantial evidence under the district court’s claim construction. We nonetheless conclude that the verdict should be sustained as to these claims because, although the district court’s claim construction was in error, the evidence requires a verdict of infringement under the correct claim construction [of the other claims].

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Extraterritorial Trademark Infringement Considered by First Circuit


According to writing for the National Law Journal on September 26, 2005, the U.S. Circuit Court of Appeals for the First Circuit announced a new test last month for determining when federal trademark law will extend to extraterritorial conduct by foreign defendants. In McBee v. Delica Co. Ltd., 417 F.3d 107 (1st Cir. 2005):

McBee sued Delica in Japan, but, after several appeals, the Japanese courts
affirmed Delica's trademark. In 2002, McBee commenced an action in Maine federal
court under the Lanham Act seeking, among other things, damages based on the
Japanese sales of "Cecil McBee" products, and an injunction prohibiting Delica
from making its [Japanese-language] Web site available in the United States. The district court found jurisdiction was lacking. . . .

In affirming dismissal, the 1st Circuit rejected Vanity Fair's three-part
test, and instead reduced the analysis of jurisdiction over the extraterritorial
conduct of foreign nationals to a single factor: whether that conduct "has a
substantial effect on United States commerce." In applying its test to McBee's claims, the court considered two key extraterritorial activities: Delica's Japanese sales and the operation of Delica's Web site. Unfortunately for McBee, the court found that he had failed to show evidence of resale into the United States, or harm to his career or lost revenue, either in the United States or in Japan. . . .

The court ruled that, on its own, the visibility of the Web site within the United States does not constitute domestic conduct sufficient to ground subject-matter jurisdiction. . . . The court also emphasized that both the Web site and the Google results were written almost entirely in Japanese characters. This fact made the possibility of any real confusion in U.S. markets "very unlikely."

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Goods Differences Prevent Infringement Preclusion before the TTAB

In Mayer/Berkshire Corp. v. Berkshire Fashions, Inc. (Fed. Cir.; September 22, 2005), the court concluded that the question of the likelihood of confusion before the trial (distict) court presented sufficiently different issues and transactional facts to bar the application of preclusion before the Trademark Trial and Appeal Board:
Caution is warranted in the application of preclusion by the PTO, for the
purposes of administrative trademark procedures include protecting both the
consuming public and the purveyors. Thus the party objecting to a registration
may raise grounds not only of commercial injury to itself, but of confusion or
deception or mistake to the consumer. The public policy underlying the
principles of preclusion, whereby potentially meritorious claims may be barred
from judicial scrutiny, has led courts to hold that the circumstances for
preclusion "must be certain to every intent." Russell v. Place, 94 U.S. (4 Otto)
606, 610 (1878). . . . The question of the likelihood of confusion presented sufficiently
different issues and transactional facts to bar the application of preclusion. The summary judgment of the Board is vacated, and the case is remanded for
further proceedings.

In this case, the issue litigated in the district court action was whether the marketing by Berkshire Fashions of specific products with either the BERKSHIRE mark or the Berkshire Fashions trade name was likely to cause confusion with Mayer/Berkshire's registered BERKSHIRE trademarks. In the opposition proceeding the question of likelihood of confusion required consideration not only of what the applicant has already marketed or has stated the intention to market, but of all the items for which registration is sought.

The parties disputed the extent to which Berkshire Fashions' application embraced a broader statement of goods than those before the district court. According to the Federal Circuit, "this aspect alone rendered summary judgment inapplicable, for the Board did not consider the separate goods in the Class 25 application, but stated that all "garments" were included in the district court judgment. Precedent and practice require a more detailed analysis."
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The Embedded Patent Attorney

J. Matthew Buchanan at Promote the Progress is discussing the concept of the "EPA" Embedded Patent Attorney here, here, here, and here, including this excerpt:

Following this approach, the attorney does whatever it takes to learn about your
business . . . walking the floor, routinely meeting with employees, reading
everything he can about the business, its industry, and the competition. Over
time, the attorney develops a familiarity and, indeed expertise, in the field
that will return huge dividends. A well-educated (in your business, not a
reference to his/her pedigree) patent attorney can help the business person
steer the ship, so to speak. The patent system provides a wealth of information
about your industry, and a patent attorney that is integrated with your overall
business strategy can sort through the vast amount of information available to
provide meaningful insight on your strengths and weaknesses and to identify (and
seize!) opportunities.

"Of course, the ‘P’ from EPA could really be any specialty," writes Matthew, "I’m just partial to patent attorneys."
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Archived updates for Tuesday, September 27, 2005

The GAO Reports on the USPTO

The U.S. Government Accountability Office ("GAO") has published "Testimony Before the Subcommittee on Courts, the Internet, and Intellectual Property, Committee on the Judiciary, House of Representatives" which summarizes the results of its Report GAO-05-1008T entitled "Improvements Needed to Better Manage Patent Office Automation and Address Workforce Challenges." Their conclusions include that the
  • USPTO Continues to Pursue a Fully Automated Patent Process, but Has Not Effectively Managed its Strategy for Achieving This Capability.
  • USPTO Lacks Essential Information Technology Investment Management Processes to Support Its Patent Automation.
  • USPTO Has Taken Steps to Help Attract and Retain a Qualified Patent Examiner Workforce, but Long-Term Success Is Uncertain.
  • USPTO Faces Long-Standing Human Capital Challenges that Could Undermine Its Recruiting and Retention Efforts.
  • USPTO Has Made Greater Progress on Strategic Plan Initiatives that Enhance the Agency’s Capability Rather than Productivity and Agility
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China Launches Patent Trade Website

According to Shanghai Daily on September 24, 2005, China's new patent trade Website at www.ip426.cn "gathers patent promotion and demand information in Jiangsu and Zhejiang provinces and Shanghai Municipality. If someone is interested, he or she can watch a short video through the video-on-demand system for introduction and talk with the patent-right owner for trade and cooperation."
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Author Name Registrable for Series of Books

In In re First Draft, Inc., Serial No. 76420605 (TTAB September 20, 2005), the U.S. Trademark Trial and Appeal Board ruled that an author's name or pseudonym is registrable for a series of books under appropriate circumstance However, it agreed with the PTO that, based on the record evidence, FERN MICHAELS does not function as a trademark for Applicant's goods. "Had Applicant timely submitted certain proofs, the outcome might have been different," notes John Welch at the TTABlog in his insightful analysis of the decision.
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Perpetual Movement at WIPO

Not to be confused with perpetual motion, "Creators in Perpetual Movement" highlights the evolution of the watch industry and "the ever-increasing importance of intellectual property to that sector." Sponsored by the World Intellectual Property Organization, the exhibition runs from September 24 to October 14, 2005, at the Crowne Plaza Hotel in Geneva. It is open to the public from 10:00 am to 6.00 pm, seven days a week.

Perhaps they will even have one of Cox's timepieces. Though not a perpetual motion machine per se, these clocks are powered by changes in atmospheric pressure via a mercury barometer so as to never need winding. The change of pressure in the Earth's atmosphere kept a mainspring coiled inside the barrel. The original Cox timepeice now resides in the Victoria and Albert Museum of Great Britain.

Click here for more on perpetual motion.
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Current and Emerging Issues Relating to Patents

This WIPO website provides the following links to other sites, articles, and studies containing a variety of views and information on non-exhaustive list of current and emerging issues relating to patents. As the debate about patents develops, further topics may be added and others might be removed from the WIPO website:

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WIPO Index of Patent Systems

According to their website, the "WIPO Index of Patent Systems" is a tool for helping users of patent statistics understand the impact of differences between patent systems on the interpretation of patent statistics. The Index is based on the results of a survey sent by WIPO in March 2005 to all its Members States. The resulting country profiles reflect the status of the patent system in each country as of May 2005 and will be regularly updated as more information becomes available.

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Archived updates for Monday, September 26, 2005

Package Licensing Not Per Se Patent Misuse

In U.S. Philips Corp. v. ITC (Fed. Cir.; September 21, 2005), the appellate court disagreed with the line of analysis employed by the International Trade Commission in concluding that Philips’s package licensing agreements were patent misuse per se, or under the rule of reason:

In light of the efficiencies of package patent licensing and the important differences between product-to-patent tying arrangements and arrangements involving group licensing of patents, we reject the Commission’s conclusion that Philips’s conduct shows a "lack of any redeeming virtue" and should be "conclusively presumed to be unreasonable and therefore illegal without elaborate inquiry as to the precise harm they have caused or the business excuse for their use." N. Pac. Ry. Co. v. United States, 356 U.S. 1, 5 (1958). We therefore hold that the analysis that led the Commission to apply the rule of per se illegality to Philips’s package licensing agreements was legally flawed.

* * *

Under the rule of reason, the finder of fact must determine if the practice at issue is "reasonably within the patent grant, i.e., that it relates to subject matter within the scope of the patent claims." If the practice does not "broaden the scope of the patent, either in terms of covered subject matter or temporally," then the patentee is not chargeable with patent misuse. More specifically, "the finder of fact must decide whether the questioned practice imposes an unreasonable restraint on competition, taking into account a variety of factors, including specific information about the relevant business, its condition before and after the restraint was imposed, and the restraint’s history, nature and effect." Va. Panel, 133 F.3d at 869, quoting State Oil Co. v. Khan, 522 U.S. 3, 10 (1997); see also Monsanto Co., 363 F.3d at 1341.

The Commission’s rule of reason analysis is flawed for two reasons. Most importantly, its conclusion was largely predicated on the anticompetitive effect on competitors offering alternatives to the four so-called nonessential patents in the Philips patent packages. Yet, . . . the evidence did not show that including those patents in the patent packages had a negative effect on commercially available technology. The Commission assumed that there was a foreclosure of competition because compact disc manufacturers would be induced to accept licenses to the technology covered by the [non-essential] Farla and Iwasaki patents and therefore would be unwilling to consider alternatives. As noted, however, there was no evidence before the Commission that any manufacturer had actually refused to consider alternatives to the technology covered by those patents or for that matter that any commercially viable alternative actually existed.

In addition, as in its per se analysis, the Commission did not acknowledge the problems with licensing patents individually, such as the transaction costs associated with making individual patent-by-patent royalty determinations and monitoring possible infringement of patents that particular licensees chose not to license. The Commission also did not address the problem, noted above, that changes in the technology for manufacturing compact discs could render some patents that were indisputably essential at the time of licensing arguably nonessential at some later point in the life of the license. To hold that a licensing agreement that satisfied the rule of reason when executed became unreasonable at some later point because of technological development would introduce substantial uncertainty into the market and displace settled commercial arrangements in favor of uncertainty that could only be resolved through expensive litigation.

Finally, the Commission failed to consider the efficiencies that package licensing may produce because of the innovative character of the technology at hand. Given that the technology surrounding the Orange Book standard was still evolving, there were many uncertainties regarding what patents might be needed to produce the compact discs. As noted, package license agreements in which the royalty was based on the number of units produced, not the number of patents used to produce them, can resolve in advance all potential patent disputes between the licensor and the licensee, whereas licensing patent rights on a patent-by-patent basis can result in continuing disputes over whether the licensee’s technology infringes certain ancillary patents owned by the licensor that are not part of the group elected by the licensee.

We therefore conclude that the line of analysis that the Commission employed in reaching its conclusion that Philips’s package licensing agreements are more anticompetitive than procompetitive, and thus are unlawful under the rule of reason, was predicated on legal errors and on factual findings that were not supported by substantial evidence. For these reasons, we cannot uphold the Commission’s decision that Philips’s patents are unenforceable because of patent misuse under the rule of reason.

Because the Commission did not address all of the issues presented by the administrative law judge’s decision under both the per se and rule of reason analysis, further proceedings before the Commission may be necessary with respect to whether Philips’s patents are enforceable and, if so, whether Philips is entitled to any relief from the Commission. Accordingly, we reverse the Commission’s ruling on patent misuse for the reasons stated, and we remand this case to the Commission for further proceedings consistent with this opinion.

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Assignor Estoppel Prevents Inventor Testimony on Invalidity

In Pandrol USA, LP, et al. v. Airboss Railway Products, Inc., et al. (Fed. Cir.; September 19, 2005) the lower court properly invoked the doctrine of assignor estoppel to excluded the inventor's tesimony on invalidity:

"Assignor estoppel is an equitable doctrine that prevents one who has assigned the rights to a patent (or patent application) from later contending that what was assigned is a nullity." Diamond Scientific Co. v. Ambico, Inc., 848 F.2d 1220, 1224 (Fed. Cir. 1988). Thus, an assignor and parties in privity with the assignor are estopped or barred from asserting invalidity defenses. Id. In this case, the district court invoked that doctrine to bar an assignor from testifying against the validity of its own patent.

Courts frequently mention four justifications for the doctrine of assignor estoppel: "(1) to prevent unfairness and injustice; (2) to prevent one [from] benefiting from his own wrong; (3) [to adopt the] analogy [of]. . . estoppel by deed in real estate; and
(4) [to adopt the] analogy to a landlord-tenant relationship." Id. (quoting Hal Cooper, Estoppel to Challenge Patent Validity: The Case of Private Good Faith vs. Public Policy, 18 Case W. Res. 1122, 1128 (1967)).

This case relies primarily on the "unfairness and injustice" justification. "[A]n assignor should not be permitted to sell something and later assert that what was sold is worthless, all to the detriment of the assignee." Diamond, 848 F.2d at 1224.
"The principle of fair dealing as between assignor and assignee of a patent whereby the assignor will not be allowed to say that what he has sold as a patent was not a patent has been part of the fabric of our law throughout the life of this nation." Id. (quoting Scott Paper Co. v. Marcalus Mfg. Co., 326 U.S. 249, 260 (Frankfurter, J., dissenting)). Thus, assignor estoppel prevents an assignor from asserting that its own patent, for which it may have received value upon assignment, is invalid and worthless. The district court properly excluded Mr. Young’s testimony on this basis.

The district court also correctly excluded Mr. Young’s testimony because Airboss did not produce his expert report before trial. Under Federal Rule of Civil Procedure (FRCP) 26(a)(2), testimony offered as expert opinion requires the offer of an expert report prior to trial. Mr. Young’s declaration contains expert opinion because he opines on claim construction and interpretation of the original application. Thus, without an expert report proffered for the record at any time, the district court correctly excluded this testimony on the basis of FRCP 26(a)(2).

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Lack of Intrinsic Evidence Allows Reliance on Dictionary Definition


In Free Motion Fitness, Inc. v. Cybex International, Inc. (Fed. Cir.; September 19, 2005) the court held that where there was no intrinsic evidence to give the term a specialized meaning, the lower court properly looked to dictionaries for definitions of the word "adjacent" for assistance in determining the term’s meaning to one skilled in the art. The claim at issue involved an exercise apparatus [right], including a first extension arm having "a first end pivotally supported adjacent the resistance assembly at a first pivot point." According to the opinion,

"Our en banc decision in Phillips clarified the appropriate use of dictionaries in claim construction, rejecting the view that dictionary definitions govern unless contradicted by intrinsic evidence. Nonetheless Phillips confirms that courts may "‘rely on dictionary definitions when construing claim terms’" and that "[d]ictionaries . . . are often useful to assist in understanding the commonly understood meaning of words." The court must ensure that any reliance on dictionaries accords with the intrinsic evidence: the claims themselves, the specification, and the prosecution history. Under Phillips, the rule that "a court will give a claim term the full range of its ordinary meaning," Rexnord Corp. v. Laitram Corp., 274 F.3d 1336, 1342 (Fed. Cir. 2001), does not mean that the term will presumptively receive its broadest dictionary definition or the aggregate of multiple dictionary definitions. Rather, in those circumstances where reference to dictionaries is appropriate, the task is to scrutinize the intrinsic evidence in order to determine the most appropriate definition.

Webster’s Third New International Dictionary provides several different definitions of "adjacent," two of which are possibilities here. One definition is "not distant" and the other is "relatively near and having nothing of the same kind intervening."The specification thus suggests that "adjacent" simply means "not distant." We find nothing in the intrinsic record suggesting a concern with intervening pivot points or excluding an additional pivot point between the "first pivot point" and the resistance assembly, particularly given that a "pivot point" and a "resistance assembly" are not items of the "same kind". Renishaw PLC v. Marposs Societa’ Per Azioni, 158 F.3d 1243, 1250 (Fed. Cir. 1998) ("[W]here there are several common meanings for a claim term, the patent disclosure serves to point away from the improper meanings and toward the proper meaning."). The specification thus suggests that "adjacent" simply means "not distant." Indeed, Nautilus and Cybex appeared to agree before the district court that adjacent means "near." Under this definition the district court’s judgment of non-infringement is not supported because the pivot points of the accused devices are not distant from the resistance assembly.

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Nystrom Opinion Revised in View of Phillips


In Nystrom v. Trex Company, Inc., et al. (Fed. Cir. September 19, 2004), the court withdrew its previous opinion and granted a panel rehearing for the limited purpose of addressing the effects of Phillips v. AWH Corp., 415 F.3d 1303 (Fed. Cir. 2005) (en banc). At the Georgia Bar Patent Rountable in Atlanta on September 22, 2005, Lawrence Nodine, of Needle & Rosenberg made the following summary comparisons between the original and revised opinions, with the quoted passages from the second opinion:


  • Both start by looking at the words of the claim
  • Before Phillips, go to the dictionary first; after Phillips the claims must be read in view of the specification:
"The person of ordinary skill in the art views the claim term in the light of the entire intrinsic record. Thus, the claims "must be read in view of the specification, of which they are a part." See id. Markman v. Westview Instruments, Inc., 52 F.3d 967, 979 (Fed. Cir. 1995) (en banc). "‘The construction that stays true to the claim language and most naturally aligns with the patent’s description of the invention will be, in the end, the correct construction.’" Phillips, 415 F.3d at 1316 (quoting Renishaw PLC v. Marposs Societa’ per Azioni, 158 F.3d 1243, 1250 (Fed. Cir. 1998)). In addition to
the written description, "the prosecution history can often inform the meaning of the claim language by demonstrating how the inventor understood the invention and whether the inventor limited the invention in the course of prosecution, making the claim scope narrower than it would otherwise be."

  • Before Phillips, the dictionary must be disavowed; after Phillips dictionaries do not trump;

"In discerning the meaning of claim terms, resort to dictionaries and treatises also may be helpful. Id. at 1318. However, "undue reliance on extrinsic evidence poses the risk that it will be used to change the meaning of claims in derogation of the ‘indisputable public records consisting of the claims, the specification and the prosecution history,’ thereby undermining the public notice function of patents." Id. at 1319 (quoting Southwall Techs., Inc. v. Cardinal IG Co., 54 F.3d 1570, 1578 (Fed. Cir. 1995)). . . ."

However, as explained in Phillips, Nystrom is not entitled to a claim construction divorced from the context of the written description and prosecution history. The written description and prosecution history consistently use the term "board" to refer to wood decking materials cut from a log. Nystrom argues repeatedly that there is no disavowal of scope in the written description or prosecution history. Nystrom’s argument is misplaced. Phillips, 415 F.3d at 1321 ("The problem is that if the district court starts with the broad dictionary definition in every case and fails to fully appreciate how the specification implicitly limits that definition, the error will systematically cause the construction of the claim to be unduly expansive."). What Phillips now counsels is that in the absence of something in the written description and/or prosecution history to provide explicit or implicit notice to the public—i.e., those of ordinary skill in the art—that the inventor intended a disputed term to cover more than the ordinary and customary meaning revealed by the context of the intrinsic record, it is improper to read the term to encompass a broader definition simply because it may be found in a dictionary, treatise, or other extrinsic source. Id.; see also Snow v. Lake Shore & Mich. S. Ry. Co., 121 the appellants, that this language is to be taken as a mere recommendation by the the arrangement of the piston and piston-rod.").

  • Claim differentiation is not controlling
"When different words or phrases are used in separate claims, a difference in meaning is presumed. Tandon Corp. v. United States Int’l Trade Comm’n, 831 F.2d
1017, 1023 (Fed. Cir. 1987). This principle of claim construction would suggest that the difference in the use of terms has significance and that "board" should not be limited to wood that is cut from a log. However, simply noting the difference in the use of claim language does not end the matter. Different terms or phrases in separate claims may be construed to cover the same subject matter
where the written description and prosecution history indicate that such a reading of the terms or phrases is proper. Id. at 1023-24 (affirming the International Trade Commission’s holding that "the inclusion of the term ‘non-gimballed’ in claim 5 did not require that claims 1 and 12 be read to encompass a gimballed first transducer")."
  • Pre-Phillips decision requires that written description disclaim broad dictionary definition; after Phillips, the specification need not amount to a disavowal
An examination of the term "board" in the context of the written description and
prosecution history of the ’831 patent leads to the conclusion that the term "board" must be limited to wood cut from a log. The written description begins by noting that "[a] variety of specialized flooring materials have been developed for interior and exterior use." ’831 patent, col. 1, ll.13-14. The discussion then proceeds to the specific context of wood flooring materials for exterior use. In the context of the discussion of wood flooring materials for exterior use, the patent states, "In all conventional flooring materials known to applicant, the top and bottom horizontal surfaces of these flooring materials are flat and planar. As a result, water tends to stand on the surface of the decking material, causing it to deteriorate more quickly than it otherwise would." Id. at ll. 57-61. The discussion continues, "Further, the process used to cut such lumber from logs can produce inferior product on the outermost boards, often leading to scrap." Id. at ll. 65-67. The Background of
the Invention, thus, frames the invention in the context of wood decking
materials cut from logs, even though it acknowledges that other materials exist.
  • After Phillips, panel is skeptical about arguments to avoid estoppel
"[W]hen arguing against an obviousness rejection, Nystrom stated, "YOSIDA [sic] is
clearly not concerned with materials made from wood, and especially an elongate
board for exterior use and having a convex top surface when installed that will
shed water and at the same time provide a surface that is suitable for
supporting furniture and comfortable to walk on." Id. at 4. Although Nystrom
argues that the latter statement was limited to explaining why Yoshida could not
be combined with the Zagelmeyer reference, which was directed to wood, we are
not convinced that the statement is so limited. "
  • Before Phillips, panel reluctant to find "disavowal."
Nystrom explained in the same response that "the extent of curvature used by
ZAGELMEYER in his boards was such that a distinctly uneven surface resulted,
giving any surface constructed from them a corduroy-like texture which would
have been unsuitable for supporting furniture, and which would have produced a
distinct tactile sensation of roughness or uneven surface." Id. at 3. Thus, it is clear that when Nystrom was distinguishing Yoshida from an elongate board that is suitable for supporting furniture and comfortable to walk on, he was referring to the invention and not Zagelmeyer. We need not decide, however, whether this statement represents a clear disavowal of claim scope because the context reflects Nystrom’s consistent use of the term board to refer to wood decking materials cut from a log.
  • After Phillips, panel gets to dictionaries last, and gives little weight compared to specification
"Nystrom explained in the same response that "the extent of curvature used by ZAGELMEYER in his boards was such that a distinctly uneven surface resulted, giving any surface constructed from them a corduroy-like texture which would have been unsuitable for supporting furniture, and which would have produced a distinct tactile sensation of roughness or uneven surface." Id. at 3. Thus, it is clear that when Nystrom was distinguishing Yoshida from an elongate board that is suitable for supporting furniture and comfortable to walk on, he was referring to the invention and not Zagelmeyer. We need not decide, however, whether this statement represents a clear disavowal of claim scope because the context reflects Nystrom’s consistent use of the term board to refer to wood decking materials cut from a log. "
  • Phillips distinguished: Defendant in Phillips sought to narrow ordinary meaning; plaintif here trying to broaden with "obscure definitions":

In Phillips, we held that the term "baffle" did not require any specific angle—even in view of the written description’s limited disclosure of baffles oriented at right angles to the walls—because the ordinary meaning of the term "baffle," as reflected in a dictionary definition to which the parties stipulated and as supported by the overall context of the written description, was simply "objects that check, impede, or obstruct the flow of something." 415 F.3d at 1324. In this case, both parties acknowledge the ordinary meaning of "board" as "a piece of sawed lumber." Nystrom, however, seeks to broaden the term "board" to encompass relatively obscure definitions that are not supported by the written description or prosecution history. Broadening of the ordinary meaning of a term in the absence of support in the intrinsic record indicating that such a broad meaning was intended violates the principles articulated in Phillips. Therefore, we affirm the district court’s construction of the term "board."

For a copy of Mr. Nodine's side-by-side comparison of the two opinions, please feel free to contact me.

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Non-Physical Differences Must Appear in Substantially All Gray Market Infringing Goods

In SKF USA, Inc. v. International Trade Commission, et al. (Fed Cir., September 14, 2005) the court held that physical material differences are not required to establish trademark infringement involving gray market goods.
"That is because trademarked goods originating from the trademark owner may have nonphysical characteristics associated with them, including services, such that
similar goods lacking those associated characteristics may be believed by
consumers to have originated from the trademark owner and, lacking such traits,
may mislead the consumer and damage the owner’s goodwill," wrote Judge
Lourie.
However, the court went on to affirm the Commission's determination on no trademark infringement because SKF USA did not establish a material difference between substantially all of its own products and the gray market imported goods based upon post-sale technical and engineering services.

. . . [W]e agree with the Commission that a plaintiff in a gray market trademark
infringement case must establish that all or substantially all of its sales are
accompanied by the asserted material difference in order to show that its goods
are materially different. If less than all or substantially all of a trademark
owner’s products possess the material difference, then the trademark owner has
placed into the stream of commerce a substantial quantity of goods that are or
may be the same or similar to those of the importer, and then there is no
material difference. Indeed, if it cannot be said that substantially all of a
trademark owner’s goods are accompanied by the asserted characteristic, then it
may properly be concluded that, in effect, there exists no material difference
between the trademark owner’s goods and the allegedly infringing goods. We have
reasoned before that "the consuming public, associating a trademark with goods
having certain characteristics, would be likely to be confused or deceived by
goods bearing the same mark but having materially different characteristics."
Gamut, 200 F.3d at 779. Conversely, then, a trademark owner’s argument that
consumers would be confused by gray goods lacking an asserted material
difference from the authorized goods is inconsistent with the owner’s own sale
of marked goods also lacking that material difference from its own authorized
goods. To permit recovery by a trademark owner when less than "substantially
all" of its goods bear the material difference from the gray goods thus would
allow the owner itself to contribute to the confusion by consumers that it
accuses gray market importers of creating. . . .

[Alhough] it was undisputed that 87.4% of SKF USA’s sales to authorized distributors were supported by the "full panoply" of post-sale technical and engineering services. . . ., [t]he Commission also found that "SKF USA’s bearings do not differ materially from respondents’ bearings" because "SKF USA has authorized the sale of SKF USA marked bearings by nonauthorized distributors, gray market distributors (including respondents), surplus distributors, and RBC/Tyson which we find are not predictably and consistently accompanied by post-sale technical and engineering services." Those are also findings of fact to which we defer.

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Archived updates for Friday, September 23, 2005

USPTO Updates Centralized Delivery Exceptions

On September 19, 2005, the U.S. Patent and Trademark Office issued a pre-OG notice entitled "Updated Lists of Exceptions to the Centralized Delivery and Facsimile Transmission Policy for Patent Related Correspondence." This notice replaces all prior Office notices specifying a fax number or hand carry address for certain patent related correspondence.

The United States Patent and Trademark Office (Office) requires most patent related correspondence to be either
  • faxed to the Central FAX number (571-273-8300),
  • hand carried or delivered to the Customer Service Window (located at the Randolph Building, 401 Dulany Street, Alexandria, VA 22314),
  • mailed to the mailing address set forth in 37 CFR 1.1 (e.g., P.O. Box 1450, Alexandria, VA 22313-1450), or
  • transmitted to the Office using the Office’s Electronic Filing System.
Exceptions to this so-called "centralized delivery" policy generally involve situations where special handling of the patent related correspondence is available. All the current exceptions are listed in this notice which explains that five significant updates have occurred to the lists of exceptions since they were last published on July 12, 2005:
  1. the Office of Public Records exceptions have been added.
  2. the PCT Operations facsimile number for correspondence permitted to be filed by facsimile in international applications has changed to 571-273-3201.
  3. the Office of Patent Publication facsimile has changed to 571-273-2885, the local area telephone number to check on receipt of payments transmitted by facsimile under that exception has also changed to 571-272-4200.
  4. the Assignment Branch facsimile number has changed to 571-273-0140.
  5. the Central Reexamination Unit (CRU) facsimile number has changed to 571-273-9900.
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USPTO Outsources PCT Patent Searching

On September 21, 2005, the United States Patent and Trademark Office (USPTO) announced that it has awarded contracts to Landon IP, Inc., and IP Data Miner Inc., to participate in a Patent Cooperation Treaty (PCT) search pilot program. This pilot will determine whether searches by commercial entities can maintain the accuracy and quality standards for searches conducted by the USPTO during the patent examination process while remaining cost effective.

The USPTO is also exploring contracting out some of its PCT-related work, on a pilot basis, to other established government intellectual property offices that currently perform PCT-related searches/examinations. This pilot is expected to begin next month.

Information concerning the PCT search pilot contracting program is available at http://www.uspto.gov/web/offices/ac/comp/proc/pctsearch/pctsearchhom.html.
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NAPP Georgia Meeting on the Politics of Patent Reform

The National Association of Patent Practitioners Georgia Regional Chapter will be hosting a meeting in Atlanta, GA. on September 27, 2005, 6:30-8:30 PM 999 Peachtree Street, Atlanta Georgia, 1st Floor conference room

A presentation will be given by Hayden Gregory, lobbyist for the ABA, on the Patent Reform Act of 2005.

For details and registration visit http://www.napp.org/events/ga_chap.asp.
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EU-US Wine Agreement May Signal the Future of Geographic Indicators

On September 15, 2005, U.S. Trade Representative Rob Portman announced that the United States and the European Community reached agreement on wine-making practices and labeling of wine. Among other things, the agreement provides for the United States limiting use of certain “semi-generic” terms in the U.S. market; the EU allowing use of certain regulated terms on U.S. wine exported to the EU; and each recognizing certain names of origin in each other’s market.

According to the U.S. press release, "The Agreement does not address the use of 'geographical indications,' a form of intellectual property." However, BRIDGES Weekly Trade News Digest noted on September 21 that semi-generic terms have been at the core of the larger dispute over whether certain "names of origin" can be used for products not originating from the region in question:

The pact therefore sets a precedent for product-based GI recognition among the
WTO's two most powerful Members. This approach could spill over into their
negotiating positions in the WTO. There, it would run up against developing
countries,which have been pushing for a rule-based solution for recognising and
registering GIs under the TRIPS Agreement given their concern that a
product-based approach -- especially one limited to wine -- would not adequately
cover their own geographically-based food and handicraft products.

Since the EU and the US are among the world's biggest wine producers, theirdeal may motivate other producers such as Australia, Argentina, South Africaand Chile to seek similar protection for their wines in the WTO. In thismanner, a product-based list could emerge as the basis for WTO negotiations.This would require developing countries to develop product lists of theirown in order to benefit from GI protection.

The press release from the European Union noted that a second-phase of negotiations "will start ninety days after the date of entry into force of the agreement and will, among other things, include a dialogue on geographical indications (GIs), a dialogue on the matter of names of origin including the future of the semi-generic terms, a dialogue on the use of traditional expressions, low alcohol wines, certification, wine-making practices and the creation of a joint committee on wine issues."

California vintners applauded the bilateral deal for smoothing rough spots in the market for exports to Europe. European winemakers also toasted the new commitment to protection of their names. More on the agreement is available from the INTA here.

However, according to William New writing for Intellectual Property Watch on September 23, 2005, a September 16, 2005 meeting of the World Trade Organization committee responsible for intellectual property rights saw little progress on the issue of a creating a multilateral registration system for geographical indications of wines and spirits under Article 23.4 of TRIPS. Nonetheless, the meeting dis produce a new paper from the WTO secretariat comparing three proposals from Hong Kong (TN/IP/W/8), the European Union (TN/IP/W/11), and a joint proposal from Argentina, Australia, Canada, Chile, Dominican Republic, Ecuador, El Salvador, Guatemala, Honduras, Japan, Mexico, New Zealand, Taiwan and the United States (TN/IP/W/10). The main differences between these positions appeara to be whether GI registration should be mandatory. Europe would like to amend the TRIPS Agreement and make registration mandatory. The joint proposal would not amend TRIPS and would make registration voluntary by encouraging the use of a database of registered items. The Hong Kong proposal falls between, providing some protection for registered items across all members who choose to participate.

A separate effort is reportedly underway at the WTO to extend that GI protection to other products.
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TGIF for Taking Your Legal Administrator to Lunch

Don't forget to (at least) take your Legal Administrator to lunch for Professional Legal Management Week, October 3-7, 2005.

According to the website, Professional Legal Management Week will be observed annually during the first full week in October and provides a forum for recognizing those in legal management for what they do and the role they play in the success of the organization, and in its service to its clients and those who work in the organization. The objectives of PLMW are:
  • To provide awareness, understanding and education about the legal management profession, and
  • To increase knowledge of the diverse roles within the profession.

Learn more about the sponsors of this week of recognition (or atonement, as the case may be).
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Archived updates for Thursday, September 22, 2005

Malta Patent Anomaly Driving Pharmaceutical Investment

According to Andrew Jack writing for the Financial Times on September 19 2005, although Malta has strong intellectual property protection laws, due to its small population of 400,000, few pharmaceutical companies ever bothered to incur the costs of obtaining Maltese patent protection. This patent anomaly has reportedly turned the tiny Mediterranean island into an unexpected investment location for the pharmaceutical industry:
The leading drugs companies have now begun registering their patents in Malta,
although they cannot do so retrospectively. There is also pressure to tighten the Bolar provision [EC Directive 2004/27/EC on pre-patent-expiry development activity] on across Europe. The even lower costs of the rising number of Indian generics companies are posing a fresh challenge. "We have a window of
opportunity for 15 years," says Joseph Tabona, chairman of Malta Enterprise, the local inward investment agency. "We view generics as a stepping stone
to other things such as 'health tourism' as we construct a new hospital."
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USPTO Electrical Patent Examining Groups Seminar

Partnering in Patents XII
October 26, 2005
12:00 - 4:00 pm
USPTO Madison Auditorium
600 Dulaney St.
Alexandria, Virginia 22314
Cost: Free to attend, but $100 administrative fee for CLE credit.

One day prior to the AIPLA Annual Meeting, this seminar will feature an open dialogue between the USPTO Electrical Patent Examining Groups, the AIPLA Electronic and Computer Law Committee, and the Bar with opening remarks by Michael Dunnam of Woodcock Washburn.

Anton Fetting in the Office of Patent Legal Administration, and Lynne Browne Supervising Patent Examiner for Tech Center 2100 will discuss the Pre-Appeals Conference. James Dwyer, Director of Tech Center 2800 will then discuss the new Re-Exam Unit.

John Whealan, USPTO Solicitor, and Vincent Roccia and John McGlynn of Woodcock Washburn,
will discuss claim interpretation in view of Phillips v. AWH. Joseph Rolla, Deputy Commissioner of Patents, will also discuss Patent Reform.

Register here. There is no fee to attend.
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Free Patent Damages Teleconference

Free Patent Damages Teleconference
Thursday, October 06, 2005
1:00 PM ET to 2:00 PM ET
Teleconference

Kathleen Kedrowski, of Kilpatrick Stockton LLP, and Shawn McGrath, of LECG, Inc. will address the following and related issues during the session:
  • Patent infringement action statistics, including patent applications filed, patent infringement cases filed, trends in damages awards over time, top damages awards, types of damages awarded, and a comparison of damages awarded in bench trials vs. jury trials;
  • Seminal cases that have shaped patent damages case law; and
  • The effect of recent decisions in the Federal Circuit on patent damages case law.

More information and free registration are available here.

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Archived updates for Wednesday, September 21, 2005

When to Audit Your I/P

Todd Mayover at the IP Counsel Blog writes that "In general, it is wise to conduct an IP audit at least once a year and sometimes more frequently depending on the size of the organization and the amount of intellectual property assets involved. Besides a regularly scheduled IP audit, there are significant events that may also trigger the need for an IP audit," including
  • New Intellectual Property Management
  • Transfer or Assignment of Interest in Intellectual Property
  • Licensing Program
  • Significant Change in Law, and
  • Financial Transactions Involving Intellectual Property
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Sept. 23 Webinar: Mediation and the Federal Circuit Practice

"Mediation and The Federal Circuit Practice"
Friday, September 23, 2005
12:15 to 1:25 p.m. Eastern
in Washington DC, and On-Line
Cost: $20

Panel members:

Alvin A. Schall, Federal Circuit Judge
Edward Hosken, Federal Circuit Mediation Officer-Designate
Martha Schneider, General Counsel U.S. Merit Systems Protection Board
Harrie Samaras, RatnerPrestia
Bob Niemic, Federal Judicial Center

Real Location:

The Federal Circuit Bar Association
Charitable and Educational Fund
Suite 900, 1620 I Street, NW
Washington, DC 20006(near Farragut West Metro)
Register here (and get a free box lunch)

Online Location:

To register for the Online Webcast, please visit Fedcirbar.webex.com where the registration password is 'fcba'

Get more information on upcoming patent Law conferences from Dennis Crouch's Patently-O Blog.
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USPTO Names Advisory Committee Members

Three new members have been named to each of the Patent Public Advisory Committee (PPAC) and Trademark Public Advisory Committee (TPAC) to counsel USPTO Director Jon Dudas on the agency's operations, including its goals, performance, budget and user fees. The new members will serve three-year terms on the committees, which each have nine voting members.

The new PPAC members are:

Maximilian A. Grant, an associate in the litigation department of the Washington, D.C. office of Latham & Watkins. He is the local chair for the intellectual property and technology practice group. He joined Latham & Watkins in 2002 after serving as Deputy Assistant Secretary of Defense.

Gerald J. Mossinghoff, senior counsel to Oblon, Spivak, McClelland, Maier and Neustadt, an intellectual property law firm in Alexandria, Va. He is a former Assistant Secretary of Commerce and Commissioner of Patents and Trademarks and former president of the Pharmaceutical Research and Manufacturers of America.

Lisa Norton, an attorney at DLA Piper, Rudnick, Gray, Cary US LLP. Prior to this position, she practiced in the Washington, D.C. office of King & Spalding. Her practice focuses on all aspects of patent law.

The new TPAC members are:

Ayala Deutsch, vice president and senior intellectual property counsel at NBA Properties, Inc., in New York. Her specialties include trademark law, copyright law and Internet law. Ms. Deutsch is a member of the board of directors of the International Trademark Association and co-chairs the New York State Bar Association Committee on Sports Law.

Van H. Leichliter, intellectual property leader and corporate counsel-trademarks at DuPont Corporate. He is a member of the government relations committee of the International Trademark Association.

Albert Tramposch, director of trademark registry services, Morgan, Lewis & Bockius in Washington, D.C. He has practiced exclusively in the area of intellectual property law for more than 19 years, and has worked in private practice in Alexandria, Va., Seattle, Wash., and Washington, D.C.
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Judicial Conference Proposes End to Non-Precedential Opinions

The Judicial Conference has endorsed a new Rule 32.1 of the Federal Rules of Appellate Procedure that would permit the citation of judicial dispositions that have been designated "not for publication," "non-precedential," or the like. The proposed rule applies only to decisions issued on or after January 1, 2007 and must still be approved by the Supreme Court.

Section a) of the proposed rule states that "A court may not prohibit or restrict the citation of federal judicial opinions, orders, judgments. or other written dispositions that have been designated as "unpublished," "not for publication," "non-precedential," "not precedent," or the like." According to the 2005 Report of the Advisory Committee on Appellate Rules:

Rule 32.1 is extremely limited. It does not require any court to issue an unpublished opinion or forbid any court from doing so. It does not dictate the circumstances under which a court may choose to designate an opinion as "unpublished" or specify the procedure that a court must follow in making that determination. It says nothing about what effect a court must give to one of its unpublished opinions or to the unpublished opinions of another court. In particular, it takes no position on whether refusing to treat an unpublished opinion of a federal court as binding precedent is constitutional. Rule 32.1 addresses only the citation of federal judicial
dispositions that have been designated as "unpublished" or "non-precedential" - whether or not those dispositions have been published in some way or are precedential in some sense. . . .

[W]hether or not no-citation rules were ever justifiable as a policy matter, they are no longer justifiable today. To the contrary, they tend to undermine public confidence in the judicial system by leading some litigants - who have difficulty comprehending why they cannot tell a court that it has addressed the same issue in the past - to suspect that unpublished opinions are being used for improper purposes. They require attorneys to pick through the inconsistent formal no-citation rules and informal practices of the circuits in which they appear and risk being sanctioned or accused of unethical conduct if they make a mistake. And they forbid attorneys from bringing to the court's attention information that might help their client's cause.

Because no-citation rules harm the administration of justice, and because the justifications for those rules are unsupported or refuted by the available evidence, Rule 32.1 (a) abolishes those rules and requires courts to permit unpublished opinions to be cited.

Current practices regarding citation of unpublished opinions vary among the circuits, with some permitting citation, others disfavoring citation but permitting it in certain circumstances, and others prohibiting citation. According to Tony Mauro writing for the Legal Times on September 20, 2005, "The 2nd, 7th, 9th, and federal circuits ban citation of unpublished opinions outright, while six other circuits discourage it."

The Federal Circuit court of appeals opposed the change in a January 6, 2004 letter from Chief Judge Mayer:

. . . In the view of the judges of the Federal Circuit, the adoption of Rule 32.1, which will override our local rule, may adversely affect the administration of justice by skewing the allocation of judicial resources, delaying issuance of precedential opinions, increasing the issuance of judgments without an accompanying opinion, and harming litigants.

The proposed rule may skew the allocation of judicial resources. As the Committee is aware, the decision to designate certain opinions as nonprecedential stemmed from the ever-increasing appellate caseload of the last few decades and the impossibility of providing a precedential opinion in every case. The adoption of the practice allows the judges to concentrate their efforts on opinion writing in cases involving important and precedent-setting issues. Opinions issued as nonprecedential do not require the same amount of time or effort. The Advisory Committee opines that this allocation of judicial resources will not be affected by the proposed rule because a court, although barred from prohibiting the citation of nonprecedential dispositions, may nonetheless decide by local rule that it will not treat its nonprecedential opinions as binding precedent. We fear that this finely-drawn distinction will not forestall the need to allocate judicial resources differently. Judges will certainly feel compelled to devote more time and resources to nonprecedential opinions if counsel cite and rely on them.

Indeed, having a rule that allows a party to cite a nonprecedential opinion and a second rule that would mandate that a court ignore such citation does not seem workable. Further, if a circuit maintains a rule barring the court from treating a nonprecedential opinion as binding, there seems little point in allowing a litigant to cite such nonprecedential opinions.

It is also likely that the issuance of nonprecedential opinions in any number of routine cases will be delayed as judges devote more time to writing them. That, in turn, will either delay issuance of precedential opinions or result in less time being devoted to preparing them. On the other end of the spectrum, it is likely that there will be an increase in Federal Circuit Rule 36 judgments without opinion. In our view, both of these developments would be detrimental to the administration of justice.

Finally, although the proposed rule is intended to benefit litigants, the effect may be the opposite. First, many litigants may feel compelled to significantly expand the breadth and depth of their legal research because of the existence of the rule. However, this expanded time, effort, and cost will yield commensurately little in return. Nonprecedential opinions with abbreviated fact patterns and without new legal principles will in nearly all instances lend little clarity to the law. . . .


"So, citing an unpublished opinion is something like citing part of the law," writes J. Craig Williams at his May it Please the Court blog. "It just doesn't work."
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Archived updates for Tuesday, September 20, 2005

The Politics of Patent Reform in the U.S.

In the third installment of his occasional series on patent politics, Declan McCullagh writes for CNet news.com on September 13, 2005 about the Patent Reform Act of 2005 which was introduced by Congressman Lamar Smith:
The legislation suddenly has become a flash point about everything that's right
with the U.S. patent system--and everything that's wrong with it. Technology
companies fighting expensive patent cases are hoping the bill will reduce
litigation, while open-source advocates say it will do nothing to hinder the
rising tide of software patents being issued. Many people feel that the measure
will make only modest improvements, if any, to the quality of patents being
awarded.
He also writes that Orin Hatch may be preparing to offer a competing bill in the Senate:
[Hatch] indicated that he might consider two other legislative options. The first one would be to permit third parties to submit "prior art," the legal term for evidence that an alleged invention was already public, after the patent application has been published but before it has been granted. A second option would be to repair the Patent and Trademark Office's existing re-examination process, which is virtually unused.
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Archived updates for Monday, September 19, 2005

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