TWO TRUTHS AND A LIE:
EXPLORING MISCONCEPTIONS IN
INTELLECTUAL PROPERTY LAW
February 19, 2014
Seattle Intellectual Property American Inn of Court
Anchorage. Bellevue. Los Angeles. New York. Portland.
San Francisco. Seattle. Shanghai. Washington, D.C. | dwt.com
Topics
1. Copyright Fair Use and in Japan: Hideko Takemiya
2. Copyright Sound Recordings : Tonya Gisselberg
3. Trade Dress: Harold Federow
4. Trademark Dilution: Karin Swope
5. Patent History: Jonathan Putman
6. AIA Priority: Hideko Takemiya
7. Patent Claim Construction: Ben Byer
8. Limits to Patent Scope: Kevin Raudebaugh
1. Copyright Fair Use - 2 Truths and a Lie
 1. Japan has a private use exception to copyright
infringement.
 2. There is no case that the Supreme Court of Japan admitted
“parody” as a fair use of copyrighted work.
 3. In the US, comment or criticism on original work is always
required to establish “transformative use” in first factor of fair
use test.
Copyright Fair Use - Answer
 1. True: In Japan, Copyright Act Article 30 provides that “Except in the
cases listed below, it shall be permissible for the user of a work that is the
subject of a copyright … to reproduce the work for his personal use or
family use or other equivalent uses within a limited scope ("private use")
 2. True: Actually, Japan does not have “Fair Use Doctrine” as the US has.
Parodic use of copyrighted work may be permitted as “quotation,” if It
meets requirements of the Act (Art. 32), however, it would be very
difficult.
 3. Lie: For example, in Cariou v. Prince, 714 F.3d 694 (2d Cir 2013), the
court held that “[t]he law imposes no requirement that a work comment
on the original or its author in order to be considered transformative, and
a secondary work may constitute a fair use even if it serves some purpose
other than those (criticism, comment, …) identified in the preamble to the
statute.” Id, at 706.
Copyright Fair Use - Cariou v. Prince (2d Cir 2013)
Cariou “Yes Rasta” 9.5” X 12”
http://www.nytimes.com/2013/04/26/arts/design/
appeals-court-ruling-favors-richard-prince-incopyright-case.html
Prince “Graduation” 72 ¾” x 52 ½”
http://pdnpulse.pdnonline.com/2014/03/richardprince-settles-photographer-patrick-cariou.html
Copyright Fair Use - Supreme Court of Japan
(1980)
Original work
Parody?
http://www.saegusa-pat.co.jp/copyright/cr_02_3_2.htm
2. Sound Recordings - 2 Truths and a Lie
 Copyrights for sound recordings are distinct from copyrights
for musical compositions.
 Sound recordings have always received copyright protection.
 Exclusive sound recording public performance rights are
limited to the right to perform the copyrighted work publicly
by means of a digital audio transmission.
Sound Recordings - Answer
 Truth: Sound recording rights are separate from musical
composition copyrights. Musical composition copyrights
further break down into separate copyrights for the music and
the lyrics.
 Lie: Sound recordings did not received copyright protection
until 1972, when they received limited copyright protection.
 Truth: The exclusive right of the sound recording copyright
owner to publicly perform sound recordings is limited to
digital audio transmission.
Sources: 17 USC §§ 106 and 114 and Music Choice v. Copyright Royalty Board, No. 13-1174,
District of Columbia Circuit Court of Appeals (2014).
3. Trade Dress - 2 Truths and a Lie
Trade Dress can be used to protect the “look and feel” of
product that serve as source identifiers. The elements
cannot be functional and they must have acquired
secondary meaning, such that people associate them with a
particular producer.
Each of these is protected by Trade Dress Registrations:
 Boise State University’s blue football field
 Topps Company, Inc.’s design of its Ring Pop candy
 Gibson Guitar Corp.’s design for the configuration of its
acoustic guitar
Trade Dress – Answer
 TRUE: Boise State University owns Reg. No.
3,707,623 for its blue football field covering
“entertainment services, namely the presentation
of intercollegiate sporting events and sports
exhibitions rendered in a stadium, and through the
media of radio and television broadcasts and the
global communications network” in Class 41.
 TRUE: The Topps Company, Inc. owns Reg.
No. 1,846,873 for its ring pop design, covering
“candy” in Class 30.
 FALSE: Gibson was denied protection for its guitar
design on the grounds that it was functional. But,
the company has registered other designs.
4. Trademark Dilution - 2 Truths and a Lie
1. Using the Navajo trademark to sell a flask did
not state a claim for trademark dilution under
the Lanham Act.
Trademark Dilution
2. Using the Navajo trademark to sell
underpants did not state a claim for
trademark dilution under the Lanham
Act.
Trademark Dilution
3. Using the misspelled “NAVAHO” sell products did not state a claim for
trademark dilution under the Lanham Act.
The Navajo Nation Code provides that the use of “Navajo” shall use the spelling
“j” and not “h.” Navaho is the Americanized form of spelling the name, Navajo.
“Navajo” is actually an archaic, invented name. It was originally a pejorative used
by the Spanish when referring to the members of the Nation. It is derived from
the Tewa language of the Pueblo Indians, who—like the Spanish—were often
adverse to the Nation. Members of the Nation identify themselves as Diné, which
means “the People.”
See A. Benavides, BENAVIDES’ MEMORIAL OF 1630 45 (Peter P. Forrestal trans.,
Acad. of Am. Franciscan Hist. ed. 1954).
Trademark Dilution - Answer
 1
TRUE: [Flask] Court held that UO’s use of mark with their “Navajo
Print Wrapped Flask” product was not sufficiently unwholesome or
unsavory to support trademark dilution claim because the Nation
admitted to registering the “FIREROCK NAVAJO CASINO” mark for shot
glasses using in their gaming facilities.
 2
FALSE: [Panties] Court held that UO’s use of Navajo to sell
underpants stated a claim of trademark dilution.
 3
True: [Navaho] Court held that UO’s use of “Navaho” to sell products
did not state a claim of trademark dilution because Plaintiffs acknowledge
that “Navaho” has been a “long-thought acceptable spelling” and the
Webster’s Dictionary, relied on by Plaintiffs, use Navaho and Navajo
interchangeably.
5. Patent History - 2 Truths and a Lie
 James Buchanan and Andrew Johnson are the only two
United States Presidents to obtain a patent while in office.
 The patent for the microwave oven was filed after an
inventor noticed a melted chocolate bar in his pocket
 The inventor of the fire hydrant cannot be verified. The
patent was destroyed in a fire.
Patent History – Answers
 LIE: However, the President that came between those two
(Abraham Lincoln) was the only United States President to
obtain a patent while in office. The patent (#6,469 in May
1849) was for a device for lifting boats off sandbars.
 TRUE: In 1945, Percy Spencer (who was an engineer) of
Ratheon was working near a magnetron (used for powering
radar). He noticed the chocolate in his pocket had melted
and filed a patent for a microwave oven later that year.
 TRUE: Although, credit for the invention is generally
attributed to Frederick Graff, the patent office caught fire
in 1836, destroying many patent records of the period.
Patent History – Answers
 Lincoln worked on the patent between terms as a U.S. Congressman, and
filed it days after leaving Congress – 12 years before he became President.
 Issued two months after it filed.
 The invention would equip a boat with inflatable bellows on either side,
and inflate them to raise the boat out of the water to float over a shallow
sand bar.
 A model of the device is in the Smithsonian – unlikely that it would
actually work.
6. AIA Priority - 2 Truths and a Lie
 Dr. A conceived an invention on Apr. 15th 2013.
 He published an article (written in English) and disclosed the
invention in Japan on Apr. 30th 2013.
 He filed patent application in Japan on Nov. 15th 2013.
 He filed patent application in the US based on previous application
in Japan, and claimed right of priority on Oct. 15th 2014.
2013
Apr. 15th
2013
Apr. 30th
2013
Nov. 15th
2014
Oct. 15th
Dr. A
Conception
Dr. A
Published
Article
(Disclosure)
In Japan
Dr. A
Patent
Application
In Japan
Dr. A
Patent
Application
In US
Claimed right of priority
AIA Priority - 2 Truths and a Lie
 1. Patent application in the US will be rejected.
– Because, the invention was publicly disclosed more than 1 year
before the filing date.
 2. Patent application in Japan will be rejected.
– Because, the invention was publicly disclosed more than 6
months before the filing date.
 3. Patent application in the US won’t be rejected only because
the article was written in English.
AIA Priority - Answer
 1. Lie: The invention was publicly disclosed by the
inventor less than 1 year before the effective filing date (in
this case, filing date in Japan). Therefore, the invention will
not lack novelty.§102 (b)(1)(A)
 2. True: According to Patent Act of Japan, Dr. A’s invention
will not lack novelty if he files patent application within 6
months from the publication of his article.
 3. True: Public disclosure is not required to be done in
English.
7. Claim Construction - 2 Truths and a Lie
 1. The Federal Circuit does not often reverse district courts
on claim construction
 2. All aspects of claim construction fall exclusively within
the province of the court, not the jury
 3. Claim construction does not include fact findings
requiring deference on appeal
Claim Construction – Reversal Rare? Truth.
 Reversal rate for claim construction in line with reversal rate
of other issues
Reversal Rate
50%
45%
40%
35%
30%
25%
20%
15%
10%
Reversal Rate of
all issues
Philips
5%
0%
1998
2000
2002
2004
2006
2008
2010
2012
Claim Construction – Judge not Jury? Truth.
 Claim construction falls exclusively within the province of the court,
not that of the jury
 Markman, 517 U.S. 370 (1996).
– Addressed this and only this
 Rule 52
– Findings of fact:
clear error
– Conclusions of law: de novo
 Federal Circuit
– Reviewed de novo, even though it involves “allegedly fact-based
questions”
– Cybor Corp. v. FAS Tech., Inc., 138 F.3d 1448 (Fed.Cir.1998) (en banc)
Claim Construction – No Difference? Lie!
 Some aspects of claim construction involve finding of fact
 Teva v. Sandoz (2015)
– Intrinsic evidence:
conclusion of law
– Extrinsic evidence:
finding of fact
– Ultimate decision:
conclusion of law
– Dissent (Thomas and Alito)
• No findings of fact
8. Limits to Patent Scope - 2 Truths and a Lie
 Most issued patents have invalid claims
 You cannot patent something that is
illegal under federal law
 The USPTO has a secret committee to
prevent embarrassing and objectionable
patents
Limits to Patent Scope - Most Patents Have Invalid
Claims
TRUTH
 “globally, more than half or all invalidation proceedings concluding
with a decision lead to partial or full invalidation
of the patent…”1
 Invalidity rate at the Federal Circuit was 60% from 2003 to 2009
 IPR data- 2,176 unpatentable claims vs. 643 patentable
claims(1/15/2015)
 German litigation: 75% of challenged patents partially or fully
invalid
1. Henkel, J., Zischa, H., Why Most Patents are Latently Invalid- Extent Reasons, and Potential Remedies of
Patent Invalidity, August 7, 2014.
Limits to Patent Scope - Most Patents Have Invalid
Claims
 Continually evolving case law
–
KSR Intern. Co. v. Teleflex Inc., 550 U.S. 398 (2007)
–
Mayo Collaborative Servs. v. Prometheus Labs., Inc., 132 S.Ct. 1289 (2012)
–
Association for Molecular Pathology v. Myriad Genetics, Inc., 133 S.Ct. 2107 (2013)
–
Nautilus, Inc. v. Biosig Instruments, Inc., 134 S.Ct. 2120 (2014)
–
Alice Corp. v.. CLS Bank International, 134 S.Ct. 2347 (2014)
 Inadequate Resources at the USPTO
–
Patent Examiners are expected to spend about 16 hours per examination
–
Average number of references cited per patent is about 48- scope of prior art is expanding
exponentially in the information age.
–
A report in 2010 found that 80% of Examiners had less than 3 years experience.
 Since 2008, more than 50% of US applications are of “Foreign Origin”
 Given the costs and complexity, the current system may be the most
efficient way to determine validity.
Limits to Patent Scope - You Cannot Patent
Something Illegal
LIE
 In the 19th Century, illegal or immoral activity was not deemed to lack utility
under 35 U.S.C. § 101.
 Since then, courts are increasingly less likely to invalidate based on morality or
illegality.
 “To violate § 101 the claimed device must be totally incapable of achieving a
useful result.”
– Fuller v. Berger, 120 F. 274, 275 (7th Cir.1903)
– New utility test is whether invention "is incapable of serving any beneficial end.”
 “[W]e find no basis in section 101 to hold that inventions can be ruled
unpatentable for lack of utility simply because they have the capacity to fool
some members of the public.”
– Juicy Whip, Inc. v. Orange Bang, Inc., 185 F.3d 1364 (Fed. Cir. 1999).
Limits to Patent Scope - You Cannot Patent
Something Illegal
 1,785,447: “Aldehyde-free alcoholic liquids”
– Distilling process prosecuted during prohibition
 5,800,268: “Method of Participating in a Live Casino Game from a Remote
Location”
– Online gambling, which is illegal under federal law and legal under Nevada
state law
– Litigated in Home Gambling Network, Inc. v. Piche (D.C. Nev., Sept. 30, 2013)
 6,928,960: “Non-lethal gamecock sparring match, equipment & methods”
– Directed to cock fighting, which is illegal under federal law and laws of all
states
 8,445,034: “Systems and methods for producing organic cannabis tincture”
 Enforceability is less clear.
Limits to Patent Scope – SAWS Program
TRUTH
 The Sensitive Application Warning System (SAWS) program
was revealed in a leaked memo in 2006.
 Subsequent FOI requests have revealed some of the details.
 Limited scope- only about 0.05% of applications are
examined under SAWS.
 Extended pendency– About double the average office Action and RCE rate.
– 6.0 year pendency compared to 3.5 year average.
Limits to Patent Scope - SAWS Program
Criteria
• Inventions that, if issued, could generate
unwanted media coverage
Method of exercising a cat
• Disclosing frivolous or silly subject matter
• Domineering scope or very old effective date
(submarine)
• Taking human life
• Curing incurable diseases
• Human cloning
• Method or apparatus for abortion
• Post-grant proceedings involving high value or
SCOTUS litigation
• Controversial, illegal, objectionable or derogatory
subjects (e.g. marijuana cigarettes, pornography)
Limits to Patent Scope - Answer
 Truth: Most issued patents have invalid claims. Although
issued patent validity is difficult to study and this claim is
controversial, all papers reviewed for this presentation
conclude that a majority of patents issued since around 2000
have at least one invalid claim.
 Lie: You cannot patent something that is illegal under federal
law. Although this was true hundreds of years ago, morality
and legality are no longer bars to patentability.
 Truth: The USPTO has a secret committee, not accountable to
the public, to prevent embarrassing and objectionable
patents, called the Sensitive Application Warning System
(SAWS) program.
Questions?