The Board found that, although no formal written agreement existed, the parties entered into an informal agreement through email communications. Australian agreed it would not use or register its unregistered mark in the United States, and Naked could use and register its NAKED mark in the United States. The Board found that Australian led Naked to reasonably believe that Australian had abandoned its rights in the United States to the NAKED mark in connection with condoms.

The Federal Circuit said that the Board discussed the requirements to bring a cancellation proceeding under 15 U.S.C. § 1064 in terms of “standing” instead of a statutory entitlement to a cause of action under 15 U.S.C. § 1064, and proceeded to review de novo whether Australian has established entitlement to a statutory cause of action under § 1064. Section 1064 provides that a petitioner may seek cancellation of a registered trademark if the petitioner “believes that he is or will be damaged” by the registered trademark. 

The Federal Circuit found that the Board’s requirement that Australian establish proprietary rights in its unregistered mark in order to demonstrate a cause of action under § 1064 was made in error. Neither § 1064 nor Federal Circuit precedent requires that a petitioner have a proprietary right in its own mark in order to demonstrate a cause of action before the Board. For example, a trade association may have standing to oppose a mark’s registration without having proprietary rights in a mark.

The Federal Circuit said that the Board determined that Australian had contracted away its right to use and register its unregistered mark, but contracting away one’s rights to use a trademark does not preclude a petitioner from challenging a mark before the Board. The Federal Circuit noted that while an agreement could ultimately bar Australian from proving actual damage, § 1064 requires only a belief of damage.

The Federal Circuit concluded that neither § 1064 nor its precedent requires that a petitioner in a cancellation proceeding must prove that it has proprietary rights in its own mark in order to demonstrate a real interest in the proceeding and a belief of damage.

On the issue of a real interest and reasonable belief of damage, the Federal Circuit said that such an interest exists where the petitioner’s application has been refused registration based on a likelihood of confusion with the challenged mark, or where the petitioner is making and selling products with the challenged mark.

The Federal Circuit said that Australian demonstrates a real interest in the proceeding because it twice filed an application to register its unregistered mark, and because the USPTO refused registration of both applications based on a likelihood of confusion with Naked’s registered mark. Australian’s applications for registration, the USPTO’s refusal of registration, and the USPTO’s suspension of prosecution support a conclusion that Australian Therapeutic meets the statutory requirements under § 1064.

Naked argued that Australian’s applications do not support a cause of action under § 1064 because Australian abandoned the first one and the second one was a post-filing futile attempt to establish its standing. Naked further argued that “mere ownership of a pending application does not in itself provide standing to oppose other applications.”

The Federal Circuit was not persuaded. The Federal Circuit noted that a trademark owner does not abandon their rights in a mark by abandoning prosecution. The Federal Circuit also noted Australian’s advertising and sales in the United States also demonstrate a real interest and reasonable belief of damage.

Naked challenged the sufficiency of Australian’s commercial activity because Australian’s marketing and advertising activities are “isolated,” “limited,” and “de minimis,” and its sales are “sporadic” and “nominal.” The Federal Circuit said that Section 1064, however, does not impose a minimum threshold of commercial activity, and it declined to define one.

The Federal Circuit concluded that based on the facts established before the Board, Australian had a real interest in the cancellation proceeding and a reasonable belief of damage, thereby satisfying the statutory requirements to seek cancellation of a registered trademark. 

The Federal Circuit concluded that the PTAB can consider § 101 when considering amended or substitute claims in an IPR (and no doubt § 112 as well).

Uniloc 2017 LLC v. Hulu, LLC:

In Uniloc 2017 LLC v. Hulu, LLC, [2019-1686] (July 22, 2020) the Federal Circuit affirmed the PTAB’s denial of Uniloc 2017’s motion to amend on the grounds that the substitute claims were unpatentable under 35 USC 101.

During an IPR, a patent owner may file one motion to amend the patent, canceling any challenged patent claim, and propose a reasonable number of substitute claims for each challenged claim. § 316(d)(1). At the conclusion of the IPR, the Director will issue a certificate incorporating any new or amended claim determined to be patentable into the patent. § 318(b).

In its Final Written Decision, the PTAB — in addition to explaining why the challenged original claims were unpatentable — denied Uniloc’s Motion to Amend the claims, concluding that Hulu had shown by a preponderance of the evidence that the Substitute Claims are directed to non-statutory subject matter under 35 U.S.C. § 101.

Ineligibility was the sole ground on which the PTAB denied the motion to amend.

Rejecting the argument that the case was moot, the Federal Circuit considered whether the PTAB had the authority to consider § 101 eligibility for proposed substitute claims, and concluded that the PTAB was authorized by statute to assess Uniloc’s proposed Substitute Claims for eligibility under § 101 and, finding the claims ineligible, to deny the motion to amend.

Uniloc argued that the PTAB was limited in its review of proposed substitute claims to anticipation or obviousness, as provided by § 311(b). The Federal Circuit, however, found that the PTAB correctly concluded that it is not limited by § 311(b) in its review of proposed substitute claims in an
IPR, and that it may consider § 101 eligibility.

The Federal Circuit said that this determination was supported by the text, structure, and history of the IPR Statutes, which indicate Congress’s unambiguous intent to permit the PTAB to review proposed substitute claims more broadly than those bases provided in § 311(b).

The Federal Circuit said that the IPR Statutes plainly and repeatedly require the PTAB to determine the “patentability” of proposed substitute claims. The Federal Circuit said that Congress did not intend § 311 to constrain the PTAB’s review of proposed substitute claims to anticipation and obviousness, pursuant to § 102 and § 103, because § 311 is confined to the review of existing patent claims, not proposed ones. The Federal Circuit said that the structure and legislative history of the IPR Statutes support this conclusion, as section 311 applies to the petition phase of the proceedings, and not to a separate adjudication-stage provision, such as § 316. Finally, the Federal Circuit found support in the IPR statute’s legislative history.

The Federal Circuit noted that an alleged infringer bears an initial burden of production to articulate the products it believes are unmarked patented articles subject to the marking requirement. This initial burden is a “low bar” and the alleged infringer needed only to put the patentee on notice that certain licensees sold specific unmarked products that the alleged infringer believes practice the patent. The burden then falls on the patentee to prove that the identified products do not practice the patent-at-issue.

NetScout argued that Packet Intelligence is not entitled to pre-suit damages because it failed to prove that MeterFlow, an unmarked product of Packet Intelligence’s licensee, did not practice the patent. The Federal Circuit agreed that under the standard articulated in Arctic Cat, Packet Intelligence bore the burden of proving that the MeterFlow product identified by NetScout did not practice at least one claim of the patent. Because Packet Intelligence failed to present substantial evidence to the jury that matched the limitations in any claim of the patent to the features of the Meter-Flow product, NetScout is entitled to judgment as a matter of law that it is not liable for pre-suit damages based on infringement of the patent.

Packet Intelligence further argued that the two method patents, which are not subject to the marking requirement, would alternatively support the award of pre-suit damages. The Federal Circuit disagreed, however, noting that method claims are not directly infringed by the mere sale of an apparatus capable of performing the claimed process. Thus, Packet Intelligence could not simply count sales of the software accused of infringing the ’789 patent as sales of the method claimed in the ’725 and ’751 patents. Instead, Packet Intelligence was required to produce evidence that the claimed method was actually used and hence infringed. The Federal Circuit rejected Packet Intelligence’s efforts to show that NetScout’s internal use justified the entire damage award, noting that the damages base was not tailored to any alleged internal use of the claimed methods.

Takeaway:

Patent owners should police the marking by their licensees, and remember to always completely prove their entitlement to damages when challenged by the accused infringer.

The appeal relates to an inventorship dispute over groundbreaking work in the field of cancer treatment. Each patent at issue claims a method of treating cancer by administering antibodies targeting specific receptor-ligand interactions on T cells.

Ono challenges the district court’s decision on two bases:

1. The district court’s legal analysis of conception, and;
2. The district court’s factual findings regarding inventorship.

Addressing each argument in turn, the Federal Circuit began by explaining that a joint invention is simply the product of a collaboration between two or more persons working together to solve the problem addressed.

To be a joint inventor, one must:

1. Contribute in some significant manner to the conception or reduction to practice of the invention.
2. Make a contribution to the claimed invention that is not insignificant in quality when that contribution is measured against the dimension of the full invention.
3. Do more than merely explain to the real inventors well-known concepts and/or the current state of the art.

There is no explicit lower limit on the quantum or quality of inventive contribution required for a person to qualify as a joint inventor. People may be joint inventors even though they do not physically work on the invention together or at the same time, and even though each does not make the same type or amount of contribution.

The Federal Circuit noted that conception is the touchstone of the joint inventorship inquiry, and conception is complete when an idea is definite and permanent enough that one of skill in the art could understand the invention. An inventor need not know, however, that an invention will work for its intended purpose in order for conception to be complete, as verification that an invention actually works is part of its reduction to practice.

The Federal Circuit refused to adopt a rule that research made public before the date of conception of a total invention cannot qualify as a significant contribution to conception of the total invention. Such a rule would ignore the realities of collaboration, especially that collaboration generally spans a period of time and may involve multiple contributions.Further, simply informing another about the state of the prior art does not make one a joint inventor. Collaboration and concerted effort are what result in joint inventorship, but a collaborative enterprise is not negated by a joint inventor disclosing ideas less than the total invention to others.

The Federal Circuit went on to reject a series of challenges to the district court’s factual analysis for each patent, and concluded that Freeman and Wood were co-inventors, and affirmed the district court.

The Board held that claim 3 is not unpatentable based solely on the Board’s rejection of Fitbit’s proposed construction of the term “application-specific interface (API).” The Board did not review patentability of claim 3 on the asserted grounds of obviousness.

The Federal Circuit agreed with the Board’ s construction, rejecting Fitbit’s broader construction. The Federal Circuit observed, however, that the difference between an application-specific interface and an application programming interface may have no significance.

The Board did not review the patentability of claim 3, as construed, on the asserted grounds of obviousness. The Board held that, by rejecting Fitbit’s position on the meaning of “application-specific interface (API),” the patentability inquiry ended, and by Final Written Decision the Board held claim 3 not unpatentable.

The Federal Circuit held that the Board erred in holding that since it did not adopt Fitbit’s claim construction, that decided the question of patentability. It was improper to hold claim 3 “not unpatentable” by Final Written Decision without determination of the asserted grounds of obviousness.

As to claims 4 and 5, the Board held claims 4 and 5 not unpatentable in its Final Written Decision, on the ground that the Board could not determine the meaning of the claims because the term “the application” lacked antecedent basis. The Board did not apply the cited prior art references, on which there were evidence and argument, instead stating that the meaning of the claims were “speculative.”

Both parties agreed that the lack of antecedent basis arose from an error in renumbering the claims, which the Board refused to correct. The Federal Circuit said that although the Board states that the intended meaning of the claims is “subject to reasonable debate,” it perceived no debate. Rather, the parties to this proceeding agree as to the error and its correction. The Board erred in declining to accept the parties’ uniform position and correct the error that claim 4 depend from claim 3. With this correction, the rejection of claims 4 and 5 for absence of antecedent basis for “the application” disappears.

The Federal Circuit concluded that the Agency’s treatment of this error as the basis of a Final Written Decision of patentability is not a reasonable resolution, and does not comport with the Agency’s assignment to resolve patentability issues.

The Federal Circuit has previously pressed the PTAB to reach a decision even where the claims were difficult to construe. Here the Court went further to require the Board to fix obvious defects in the claims rather than avoid reaching a decision on the merits.

Uniloc asked the district court to seal most of the materials in the parties’ underlying briefs, including citations to case law and quotations from published opinions. It also requested that the court seal twenty-three exhibits in their entireties. These exhibits included matters of public record, such as a list of Uniloc’s active patent cases.

The Federal Circuit began by pointing to the strong presumption in favor of access to documents filed with a court. The Federal Circuit sorted the motions to seal into two groups:

1. Documents with Uniloc’s own purportedly confidential and/or sensitive information and that of its related entities.
2. Documents with purportedly confidential and/or sensitive information of third parties.

As to Uniloc’s information, the Federal Circuit found that because Uniloc failed to comply with local rules setting out the standards for filing documents under seal and requesting reconsideration, the district court did not abuse its discretion in denying Uniloc’s motions to seal its purportedly confidential information and that of its related entities.

As to third party information, the Federal Circuit noted that the third parties were not responsible for Uniloc’s filing of an overbroad sealing request, and required independent analysis. The Federal Circuit concluded that the district court failed to make findings sufficient to allow it to adequately assess whether it properly balanced the public’s right of access against the interests of the third parties in shielding their financial and licensing information from public view, and vacated and remanded for the district court to consider in the first instance.

Takeaway:

Litigants with confidential information should realistically evaluate their information and attempt to only protect genuinely confidential information. It is a mistake to assume that the court will give free rein to designate information as confidential.

On October 6, 2017, Amgen sent a letter pursuant to 42 U.S.C. § 262(l)(8)(A) notifying Genentech of its intent to commercially market Mvasi — a biosimilar version of Avastin — starting no earlier than 180 days from the date of the letter. In August 2018, after two prior supplements, Amgen filed a third supplement to its Mvasi application to add a manufacturing facility and a fourth supplement to change its drug label. By July 8, 2019, Amgen decided it would commercially launch Mvasi, intending to market it immediately.

Genentech filed two motions seeking to preclude Amgen from commercially marketing Mvasi until Amgen provided notice of its intent to commercially market such product pursuant to 42 U.S.C. § 262(l)(8) and 180 days had elapsed. Genentech argued that Amgen’s third and fourth supplements resulted in new and distinct applications that require new notices under Section 262(l)(8)(A). The district court denied both motions, reasoning that Amgen’s October 2017 commercial marketing notice for Mvasi satisfied Section 262(l)(8)(A)’s notice requirements, and Genentech appealed.

The Federal Circuit said that the statute makes clear that a biosimilar applicant must provide notice to the reference product sponsor prior to commercially marketing the biological product. Section 262(l)(8)(A) expressly requires prior notice regarding commercial marketing of the “biological product,” the definition of which makes no reference to licensing under Section 262(k). Section 262(l)(8)(A) relates to timing. The Federal Circuit said this interpretation is consistent with the Supreme Court’s decision in Sandoz Inc. v. Amgen Inc., 137 S. Ct. 1664 (2017).

The Federal Circuit concluded that Amgen’s October 6, 2017 letter, which notified Genentech of Amgen’s intent to commercially market Mvasi at least 180 days before its July 2019 launch, satisfied Section 262(l)(8)(A), and affirmed the district court.

After its motion for judgment on the pleadings that the asserted claim of U.S. Patent No. 9,373,261 was not patent eligible, defendant filed a motion for an award of its attorneys fees. In “considering the totality of the circumstances,” the District Court determined the case was not exceptional, citing the Lanham Act, 15 U.S.C. § 1117), and denied the motion.

The Federal Circuit agreed with defendant that the district court abused its discretion in weighing relevant factors, and by applying the incorrect attorney fee statute. The Federal Circuit held that the District Court clearly erred by failing to address ECT’s manner of litigation and the broader context of ECT’s lawsuit against ShoppersChoice. The Federal Circuit pointed out that there was evidence that ECT sent standardized demand letters and filed repeat patent infringement actions to obtain low-value “license fees” and force settlements. Further, ECT, under its former name Eclipse, filed lawsuits against at least 150 defendants, alleging infringement of claims in the ’261 patent and in other patents in the ’261 patent’s family. ECT’s demand for a low-value settlement ranging from $15,000 to $30,000 and subsequent steps — such as failure to proceed in litigation past claim construction hearings — indicates the use of litigation to achieve a quick settlement with no intention of testing the strength of the patent or its allegations of infringement. The Federal Circuit also pointed to a prior California district court decision awarding attorneys fees against ECT, for its in terrorem enforcement tactics, and the fact that the principals of ECT were also associated with “one of the most prolific” non-practicing entity plaintiffs in the United States.

The Federal Circuit complained that there was no mention of the manner in which ECT litigated the case or its broader litigation conduct, saying “[s]uch conduct is a relevant consideration.” While a district court need not reveal its assessment of every consideration of § 285 motions, it must actually assess the totality of the circumstances, and by not addressing the adequate evidence of an abusive pattern of ECT’s litigation, the District Court failed to conduct an adequate inquiry and so abused its discretion. The Federal Circuit instructed that a pattern of litigation abuses characterized by the repeated filing of patent infringement actions for the sole purpose of forcing settlements, with no intention of testing the merits of one’s claims, is relevant to a district court’s exceptional case determination under § 285.

The Federal Circuit also said that the district court failed to sufficiently address the objective weakness of Claim 11.

The Federal Circuit vacated and remanded the case for the district court to consider, in a manner consistent with its opinion, ECT’s manner of litigation, and the objective unreasonableness of ECT’s infringement claims, and further reference the correct attorneys’ fees provision (35 U.S.C. § 285), rather than the parallel statute for trademark cases (15 U.S.C. § 1117).

This announcement follows the COVID-19 IP Update from June 15 in which the COVID-19 Trademark Prioritized Examination Program was initially covered.

Stay current on the latest COVID-19 IP News with email updates delivered straight to your inbox. Sign up now for daily alerts by filling out the form at the bottom of this window.

Reading this article on Lexology? Follow Harness Dickey for the latest updates.

To understand this decision, it is important to recognize the legal framework for proving generic goods. Specifically, a term is generic if consumers would recognize the term to describe a class of goods. This requires evidence that the relevant public would understand the term to describe a type of goods — think “escalator,” for example.

The majority characterized the issue as a problem with a “sweeping rule” that generic term + .com is always unprotectable. Instead, the Supreme Court determined that the combination can be protectable if there is evidence that the combination results in consumers recognizing a meaning or source identification. This is a factual inquiry requiring evidence of “whether consumers in fact perceive that term as the name of a class or, instead, as a term capable of distinguishing among members of the class.”

In fact, the majority notes that if consumers make an exclusive connection between the mark and the source, that’s the whole point of trademark law!

A few other notable observations:

• It’s interesting that the USPTO chose to appeal this case especially since the Trademark Manual of Examining Procedure (TMEP) indicates that domain name marks can be registerable if there is evidence that it serves as a trademark. See TMEP 1215.02(a) (“ A mark composed of a domain name is registrable as a trademark or service mark only if it functions as a source identifier”). Moreover, the TMEP further conflicts with the USPTO’s position in booking.com by providing that “there is no per se rule that the addition of a non-source-identifying gTLD to an otherwise generic term can never under any circumstances operate to create a registrable mark.” TMEP 1215.05 (emphasis added).
• It’s also noteworthy that the Supreme Court mentions several different findings that the USPTO did not contest, including the type of evidence presented regarding consumers’ perception of the mark (e.g., survey evidence). See Slip op at 11 n. 6. As such, the majority ruled that, despite Justice Breyer’s concerns in the dissent, the Supreme Court did not have the ability to discuss these issues. It’s unclear whether those issues would have changed the outcome, but, it’s a reminder that you need to carefully preserve your arguments and/or consider which arguments to concede.
• Booking.com wisely appealed to the EDVA under Section 1071(a). They did so in order to present new evidence that was not before the USPTO. This evidence was persuasive to the Supreme Court. If Booking.com had sought review by the Federal Circuit, they could only argue the evidence of record that was before the USPTO.
• The USPTO sought its attorneys fees based on the cost shifting provisions of Section 1071. The 4^th Circuit declined to award fees based on its precedent in Shammas. In a turn of good fortune for Booking.com, the Supreme Court determined in Nankwest that meaning that attorneys fees are excluded from the definition of “costs” under the Patent Act’s Section 145. Had this issue been in front of the Supreme Court, it’s likely that the same outcome would apply — i.e., USPTO’s attorney’s fees are not covered by Section 1071.
• Patent prosecutors are probably unsurprised by this decision as it seems that the Supreme Court adopted patent law principles: the combination of two known elements, in certain circumstances, can result in a patentable invention.