CUTTING EDGE
TOPICS IN
INTELLECTUAL
PROPERTY LAW
COMING UP
Intellectual
Property
Challenges Facing
3D Printing
From
#HASHTAGS to
LEGOS: Recent
Trends in
Trademark and
Branding Law
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Ethical Issues in
Negotiating IP
Licenses
Patent Reform
ETHICAL ISSUES IN NEGOTIATING IP LICENSES
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ETHICS IN INTELLECTUAL PROPERTY NEGOTIATIONS
The ABA Model
Rules of Professional
Conduct (“Rules”)
impose competing
obligations
The Rules and
negotiations
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Strive for justice &
eschew dishonesty v. act
with commitment and
dedication & zealously
advocate for the interests
of your client
Duty to preserve client
confidences v. obligation
to refrain from assisting a
client’s fraud
Selective disclosures are
an accepted negotiation
strategy
Absent fraud, the
obligation to act in good
faith only attaches to the
performance of a
contract, not its
negotiation
MAY A LAWYER REPRESENT BOTH THE
LICENSOR AND THE LICENSEE IN A LICENSING TRANSACTION?
Generally, no.
Rule 1.7(a) prohibits
simultaneous
representation when:
• The representation of one client will be directly
adverse to the interests of the other, OR
• Where there is significant risk that the representation
of one client will be materially limited by the lawyers
responsibility to the other client
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Notwithstanding
this limitation,
the dual
representation
may proceed if:
• The lawyer reasonably believes that he will be able
to provide competent and diligent representation,
• The representation does not involve the assertion
of a claim by one client against the other, AND
• Each client gives informed written consent.
CAN A LAWYER MISREPRESENT THE
CLIENT’S “BOTTOM LINE?”
Depends on Circumstances
Rule 4.1(a): “A lawyer shall not
knowingly…make a false
statement of material fact or law”
• Commentary: Estimates of price or value
and a party’s intention as to an
acceptable settlement are not statements
of material facts
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Application of Rule
• Cannot misrepresent facts
• No duty to disclose client’s endgame
MUST A LAWYER FOR A PATENT LICENSOR INFORM THE
POTENTIAL LICENSEE OF ALL POTENTIALLY
INVALIDATING
PRIOR ART OF WHICH THE LICENSOR IS AWARE?
Rule 4.1: “A lawyer shall not knowingly…fail to disclose a material fact to a third
person when disclosure is necessary to avoid assisting a criminal or fraudulent act
by a client”
• However, a lawyer does not have an affirmative duty to inform the opposing party of relevant facts
A lawyer must be careful to not incorporate or affirm the actions or statements
of another that a lawyer knows to be false
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DOES A
WHO AGREES TO A
PROVISION IN AN AGREEMENT, BUT WHO DISCOVERS
THAT
HAS
THE
PROVISION IN THE AGREEMENT,
ABA Informal Opinion
86-1518: the lawyer
should correct the
other attorney’s
apparent drafting error
and need not consult
with his client about
the situation
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The lawyer may not
advise his client to take
advantage of the
mistake
• Rule 1.2: “A lawyer shall
not counsel a client to
engage, or assist a client, in
conduct that the lawyer
knows is criminal or
fraudulent”
MAY A LAWYER CONDUCT NEGOTIATION IN A STATE
ONE IN WHICH HE IS LICENSED?
IN MOST STATES,YES
Model Rule 5.5: “A lawyer admitted in another
state and not disbarred or suspended in any
jurisdiction, may provide legal services on a
temporary basis in the jurisdiction that:
Commentary: Services may be considered
temporary even though the lawyer provides
services in the other jurisdiction on a recurring
basis or for a lengthy period
• Arise out of or are reasonably related to the lawyer’s
practice in a jurisdiction in which the lawyer is admitted to
practice; or
• Are in or reasonably related to pending or potential
proceeding before a tribunal, potential arbitration, mediation,
or APR in this or another jurisdiction, if the lawyer is
authorized by law or order to appear in such proceeding
• But the services must not be systematic and continuous
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PATENT REFORM
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SOME BASICS
A patent is government grant of
the right to exclude others from
making an invention without an
inventor’s permission for up to
20 year period.
The purpose of a patent is to
encourage and reward
innovation and provide
opportunity to develop and
commercialize an invention
without fear of theft or
misappropriation.
“Patent trolls,” today, are entities
in the business of making money
from patents without practicing
the inventions covered by those
patents using low-quality patents
and abusive litigation practices.
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“Patent troll,” coined in 90’s,
identifies “someone who tries to
make a lot of money off of a
patent that they are not
practicing, have no intention of
practicing and in most cases
never practiced.”
By other names, patent trolls are
also know as “patent holding
companies” (PHCs), “nonpracticing entities” (NPEs),
“patent assertion entities”
(PAEs) and “patent monetizers”
(PMs).
“THE AMERICA INVENTS ACT”
In 2011, the Leahy-Smith America Invents Act (or AIA) was enacted and was designed to
improve the patent system by fast-tracking patent prosecution; reducing the patent backlog;
and increasing protections for U. S. IP abroad.
Other provisions were intended to address PAE issues by creating new programs at the
(PTO) as alternatives to litigation regarding patent validity, new methods for post-grant
review of issued patents, and increasing patent quality by clarifying and tightening standards.
In the last two years, however, PAE-sponsored suits have tripled, rising from 29 % to 62% of
all infringement suits, as PAE targets now extend beyond the software industry to biotech
and pharma, and small businesses.
In 2011 alone, small businesses mounted 3,400 legal defenses for patent cases at a cost of
about $11B, a 32% increase over the prior year in each instance.
By 2013, PAEs threatened over 100K companies with patent infringement, and the total
median award for a PAE was nearly twice as high as that of non-PAE patent holders.
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WHITE HOUSE
Increasing demand letter transparency
Tighten functional claiming
Fix owner transparency
Empower downstream users
Expand dedicated outreach and study
Strengthen enforcement of exclusion orders
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Owner transparency
Expand fee-shifting
Expand review of business method patents
Protect end users
Change ITC standard for injunctive relief
“The Innovation Act”
(H.R. 3309), sponsor Bob
Goodlatte (R-VA), passed in
12/2013
• No heightened pleading
requirements
• No fee shifting
• No joinder of “interested parties”
• No discovery limits
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“Patent Transparency
and
Improvements Act” (S.
-Transparency of
Patent Ownership
-Customer Stay
-Bad Faith
Demand Letters
-Claim
Construction
Standards
1720), sponsor Patrick Leahy (DVT), pending
• PTO reports on topics including the
secondary market for patents
• Small business educational programs
on patent infringement issues
• Protection of patent licenses in
bankruptcy
• Codification of “the double-patenting
doctrine”
COURTS
Judicial training
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FRCP
Amendments
restrict the scope
of discovery and,
thus, reduce
discovery expenses,
e.g., by reducing the
presumptive
number and
number of hours of
individual
depositions; the
number of Ints. and
RFA; and reducing
the time to serve a
complaint and for
courts to issue a
scheduling order.
Pending Decisions
Octane Fitness, LLC v.
Icon Health and Fitness,
Inc. (Supr. Ct. Docket
No. 12-1184) - proper
standard for determining
an “exceptional case” in
the attorney fee shifting
context of 35 U.S.C. §285.
Oral arguments held
February 26, 2014.
Decision expected by June
2014.
Highmark Inc. v.
Allcare Health
Management Systems,
(Supr. Ct. Docket No.
12-1163) - standard of
appellate review for fee
shifting decisions. Oral
arguments held February
26, 2014. Decision
expected by June 2014.
Alice Corp. Pty. Ltd. v.
CLS Bank International
(Supr. Ct. Docket No.
13-0298) - subject matter
eligibility of computer
implemented inventions
and software within the
meaning of 35 U.S.C. §
101. Oral arguments
March 31, 2014. Decision
expected June 2014.
PTO
Periodic
identification
of
attributable
patent
owner
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Disclosure
of
competitive
landscape
Multi-phased
training
programs
for
examiners
and judges
Patent claim
glossaries
Crowd
sourcing
Pro bono
assistance
Tech training
for
examiners
STATES
Legislation
• Vermont was the first state to take patent trolling into its own
hands when the Governor signed Vermont House Bill H.299 into
law in 2013.
The law requires patent demand
letters to be specific about the claim
being violated and how a target is
violating the patent, and to give a
reasonable estimate of damages and a
reasonable time to respond.
• Heavy fines are awarded upon a finding of
meritless or deceptive claims.
AG Activism
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• In 2012, MPHJ, a Delaware-based LLC company , began sending letters to VT, MN, Neb.
and NY businesses demanding royalty payments for infringing patents covering scanning
technology. The letters threatened suit against numerous small businesses and nonprofit organizations unless a $900-1200/employee license fee was paid. Companies
complained to AGs and the AGs responded.
• In each case, save Neb., the AGs were successful in securing the cessation of all
activities by MPHJ, reimbursement of any fees paid by constituents, and an agreement
regulating any further activities by MPHJ within each state.
INDUSTRY
Partnership for
American
Innovation
Coalition for
Patent Fairness
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• a lobby group comprised of leaders from the health care and technology industries that
aims to fight back against proposed changes they claim could threaten intellectual
properties and discourage innovations. Members includes Apple, General Electric,
DuPont, IBM, Ford, Microsoft and Pfizer.
• “a diverse group of companies dedicated to enhancing U.S. innovation, job creation, and
competitiveness in the global market by modernizing and strengthening our nation’s
patent system.” Members includes Amazon.com, Autodesk, Business Software Alliance,
Cisco Systems, Comcast, Dell, Electrolux, Financial Services Roundtable, Google,
Hewlett-Packard, Information Technology Industry Council, Intel, Micron Technology,
Palm, SAP AG, Symantec, TechNet, Time Warner, and Visa.
FROM #HASHTAGS TO LEGOS
Recent Trends in Trademark and Branding Law
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In 2013, several Cease &
Desist letters went viral – as
did the shaming replies from
small business owners.
Practice Tips:
Trademark and Cease and
Desist enforcement
strategies can cause public
embarrassment
Starbucks
Trademark bullying can
backfire
Nutella
American Bankers
Association
West Orange, NJ
Freetail Brewing Co.
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Social media should be
considered in a brand’s
choice to enforce.
Tone and content are
critical
Louis Vuitton
Freetail
Starbucks
Brands in 2013
continued to
expand their
use and
registration of
non-traditional
trademarks.
Determine what
visual or audio
trade draft
characteristics
are unique to
your client
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Sounds, shapes, colors, moving graphics, and other non-traditional
trademarks can be registered.
Facebook applied
to register the
design of part of
its mobile app
menu
Lego applied to
register the
configuration of
is yellow head
piece
Pepperidge Farm
applied to
register the
threedimensional
configuration of
its Goldfish
cracker
University of
Arkansas applied
to register the
sound of its
“Woooooooo.
Pig. Sooie!” cheer
Dozens of trademark applications were filed
with the USPTO in 2013 for marks featuring
pop culture terms with hashtags, including:
#DREAMJOB
#RUNTHISTOWN
#WECANDOTHAT
#TAGMEBRO
#Twerking
#YOLODONUTS
#MUSTACHEPRETZELS
#HASHTAG LABS
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You can
trademark a
hashtag so long
as you are
providing a
product or
service
connected with
that hashtag.
A hashtag that is “hijacked” for
criticism or social media humiliation
Can be removed from
social media sites if
use is misleading or
confusing others
Protection is limited
on social media
#McDStories
#WherestheBeef
#SusAnalBumParty
Be careful what you
wish for
#MyNYPD
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#IloveWalgreens
#Obamacareisworking
It is common for
business opportunists
to capitalize on
newsworthy events and
file trademarks with
the USPTO
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However the first to
file trademark
application does not
necessarily own the
mark
Tim
Tebow
Johnny
Football
Psy
TEBOWING for use with shirts and hats.
Blue Ivy Carter, born to Beyonce and Jay-Z
All made
news with
trademark
issues in
2013.
The video for Gangnam Style by Psy
The Kardashians own many trademarks but
they found themselves defending
infringement allegations on their Kardashian
Khroma name and Kardashian Kollection logo.
the Kardashians
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Johnny Football filed by Johnny Manziel
As even more
sports and
entertainment
stars become
marketing
powers, these
celebrity
trademark
trends are
bound to
continue.
INTELLECTUAL PROPERTY CHALLENGES FACING 3D PRINTING
WHAT IS 3D PRINTING?
Also called “Additive
Manufacturing”
because it builds
object from ground up
• As contrasted with
traditional “subtractive
manufacturing”
processes where raw
material is cut to
shape, producing
waste
Industrial uses include
rapid prototyping,
rapid manufacturing
and mass production
Process of creating
physical object by
layering material into
desired shape
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Being tested for wide
range of commercial
uses, including
implants and medical
devices, low cost
housing and even food
Consumer use
currently limited by
cost of printers but
many expect lower
cost printers to
expand greatly home
based uses such as
printing customized
products and
replacement parts
• But such use raises
certain legal issues
Materials include
cured liquids, metals,
plastics, polymers
EMERGING LEGAL ISSUES
Intellectual
Property
Analyst group
Gartner has estimated
that 3D printing will
cause $100 billion IP
losses per year
Products
Liability
Who is
“manufacturer”?
Food and
Drug Act
Regulatory
Concerns
How does FDA
evaluate devices that
can be endlessly
tweaked for each
patient?
Guns and other
weaponry
Use of printed plastic
with food items
Risks for home use
(emissions, fire)
Printed recreational
drugs, paraphernalia
and other contraband
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PATENTS
3D Printing is the
“Napster” for patents
Infringing products
traditionally could be
found and litigation
was worthwhile
because mass
production and public
sale were required
Principle underlying
patent system is public
disclosure followed by
brief monopoly
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Induced infringement
may be pursued against
those who distribute
product plans
• But proving intent for
inducer may be too high a
burden
With home-based 3D
printing, infringing
product can be
secretly created by
individual consumers
• Infringing products difficult
to discover
• Litigation against individuals
not cost effective
Contributory
infringement not a
likely avenue because a
plan is not a
“component” of the
end product
COPYRIGHTS
Copyright covers not just printed
material and media but also nonfunctional, physical objects such
as sculptures and jewelry
• Issues similar to patents:
discovery and litigating against
individuals
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Copyrights also implicated
because design files are
protectable to the extent they
are original creative works
• Any object created from such
designs are derivative works
• Where the design was created
from a copyrighted work,
however, the design itself could
be an infringing work as can
anything created from the
design
3D representations of
copyrighted 2D objects can also
constitute infringement
• For example, a printed replica
of a cartoon figure
TRADE DRESS/DESIGN PATENTS
Trade dress protects the overall
appearance and image of a commercial
product
Must be inherently
distinctive or have
acquired secondary
meaning
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Examples: Coke
bottle, Mrs.
Butterworth bottle
Design patent
protects the
ornamental
features of a
functional
product
Example: shape of a
lamp
Like copyright and utility patents, the
challenge is in policing and enforcement
Infringement can be
difficult to detect
Additionally, for
trade dress, if
printing object is
for personal use
and not commercial
resale, likely no
infringement
QUESTIONS?
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