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OCTOBER 2017

 

Interesting IP Case

 

On October 4, 2017, legendary crooner Meat Loaf was sued for copyright infringement in California federal court.  The plaintiff, Enclosed Music LLC, claims that Meat Loaf's stole his hit "I'd Do Anything for Love" from songwriter Jon Dunmore Sinclair.  The case is Enclosed Music LLC v. Steinman et al., No. 2:17-cv-07304 in the United States District Court for the Central District of California.

 

2018 Winter Meeting – Amelia Island

 

At the 2018 Winter Meeting, the Intellectual Property Section will be presenting with a new partner – the Life, Health, and Disability Section.  Neil Hartzell from the IP Section and Bill Demlong from Life, Health, and Disability will present:  "Intellectual Property Issues Every Insurer Should Consider."  Topics will include copyrights for insurance policies and patent troll litigation.  Please plan to attend this session in Amelia.

 

Writers Needed

 

Our section is responsible for an Insights article in January 2018.  The approximately 1200-word article should focus on a practical topic.  Please let me know if you would be interested in writing this article.

 

I'm also happy to consider submissions for this newsletter.  Submissions are due by the 10th of the month, so feel free to send your submissions before then. 

 

You can reach me at mwalshe@stonepigman.com or at (504) 593-0881.

 

Membership

 

We're always on the lookout for new members for the FDCC and, especially, our section.  Please pass on the names of any prospects you may have.

 

Closing Thought

 

The meaning of opaque is unclear.



SEPTEMBER 2017


As More States Legalize Marijuana, Legal Sellers Look for Ways to Protect Their Trademarks

By the end of 2016, marijuana was either fully or medically legal in 29 states.  But sellers that want to enter the industry have had issues with registering their marks.  Trademarks for "unlawful" uses are barred from registration by the Lanham Act.  This means that marks used in connection with the sale of marijuana cannot be registered because marijuana remains a controlled substance that is illegal under federal law.


So far, the United States Patent & Trademark Office has upheld this ban.  In a case arising out of Washington, where marijuana is fully legal, the Trademark Trial and Appeal Board (the "TTAB") upheld the examining attorney's refused to register the mark HERBAL ACCESS for "retail store services featuring herbs."  The applicant had not specifically listed marijuana as an herb being sold, but the TTAB found that it was proper for the examining attorney to rely on evidence from the applicant's website regarding its marijuana sales to support rejection of the application.


In a later case, another applicant from Washington was equally unsuccessful despite taking a different position regarding registration of its mark.  The applicant, a company called JuJu, argued that even though marijuana was illegal, because the Department of Justice had decided not to prosecute marijuana businesses in legal jurisdictions, that was sufficient to make marijuana legal for trademark purposes.  The TTAB rejected that argument, finding that the Department of Justice's position, which had been outlined in a document known as "The Cole Memo" did not supersede the Controlled Substances Act.


Proponents of allowing registration of marijuana marks argue that allowing registration of the marks protects not only the businesses selling marijuana, but also protects consumers from purchasing fraudulent or dangerous imitations.


This is certainly an issue to watch in the future.

 

JULY 2017


Supreme Court Finds the Lanham Act’s Disparagement Clause Unconstitutional

On June 19, 2017, the Supreme Court issued its decision in Matal v. Tam, No. 15-1293.  The case involved a challenge by the Asian rock band The Slants to the United States Patent & Trademark Office’s (“PTO”) denial of registration of the band’s name as a trademark.  Section 2(a) of the Lanham Act (15 U.S.C. Sec. 1052(a)) authorized the PTO to refuse registration of any mark that the trademark examiner found to be disparaging.  The Slants contend that they had chosen their name in order to reclaim what had become a derogatory term for Asian-Americans and argued that Section 2(a)’s disparagement clause was unconstitutional infringement on free speech.  The Supreme Court agreed, holding that the disparagement clause violates the free speech clause of the First Amendment.

This is an issue that the Intellectual Property Section has followed for some time.  The more well-known case involving the disparagement clause involved the PTO’s decision to cancel six trademarks owned by the Washington Redskins.  At the 2015 Winter Meeting, the Intellectual Property section presented on the Redskins matter and discussed the case law under the disparagement clause at some length.  Interestingly, at that time, the majority of courts had rejected First Amendment challenges to the disparagement clause.  There is no doubt that the Tam decision is a positive result for the Washington Redskins.  It will be interesting to see if the decision encourages others to seek registration of what may be considered disparaging terms or phrases as trademarks.

 

JUNE 2017

 

On May 22, 2017, the Supreme Court issued its decision in TC Heartland LLC v. Kraft Food Group Brands LLC.  The case involved an interpretation of the venue provision for patent infringement lawsuits, 28 U.S.C. Section 1400(b).  The statute provides that patent infringement lawsuits “may be brought in the judicial district where the defendant resides, or where the defendant has committed acts of infringement and has a regular and established place of business.”  In 1957, in Fourco Glass Co. v. Transmirra Products Corp., the Supreme Court held that, for purposes of Section 1400(b), a domestic corporation resides only in its state of incorporation.  At issue in TC Heartland was whether amendments to the general venue statute, 28 U.S.C. Section 1391, necessitated a change in the Fourco decision, which several lower courts had endorsed.  Ultimately, the court decided that no change was needed and affirmed its earlier decision in Fourco.

 

Commentators discussing TC Heartland believe that it will limit the ability of so-called “patent trolls” to bring patent infringement lawsuits in what they perceive to be favorable venues instead of the defendant’s state of incorporation.



MAY 2017


Lost Profit Calculations in Patent Cases Clarified In Recent Federal Circuit Decision

 

In March 2017, The Federal Circuit issued its decision in Mentor Graphics Corp. v. EVE-USA, Inc. 851 F.3d 1275 (Fed. Cir. 2017). This decision provides some needed guidance on how lost profits are calculated in patent cases, an area where there had been conflicting decisions in the district courts. The underlying dispute concerns a patent for a feature of an emulator, a machine that tests for bugs in computer chips.


This was a complex case with a long history. In the district court, the jury found that the defendant had infringed on two features of the plaintiff’s patent and awarded the plaintiff $36 million. On appeal, the defendant argued that the $36 million damage award was improper as it should have reflected an apportionment analysis that factored in non-infringing features for product sales. In other words, defendant argued that plaintiff was not entitled to the lost sales, but only the value attributable to plaintiff’s features of the emulator. The Federal Circuit disagreed and held that once the four Panduit test factors are met,[1] apportionment is taken into consideration as lost profits are tied to “specific claim limitations and ensure that damages are commensurate with the value of the patented features.” 851 F.3d at 1288. Thus it upheld the jury damages award. 

 

The defendant has sought a rehearing before the full panel. Stay tuned.



[1] A patentee is entitled to lost profits if it can establish (1) a demand for the patented product; (2) absence of acceptable non-infringing alternatives; (3) manufacturing and marketing capability to exploit the demand; and (4) the amount of profit it would have made. Panduit Corp. v. Stahlin Bros. Fibre Works, 575 F.2d 1152, 1156 (6th Cir. 1978)

 

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Melinda S. KollrossDefense Counsel, Clausen Miller PC, Chicago, IL
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