Newsletter January

Patent Laches Issue Revisited

In light of Petrella v. Metro-Goldwyn-Mayer, Inc., 134 S. Ct. 1962
(2014), a 2014 Supreme Court case that held that laches does not
apply to copyright suits seeking for damages only within a fixed
time frame, the Federal Circuit recently agreed to review en banc
A.C. Aukerman Co. v. R.L. Chaides Constr. Co., 960 F.2d 1020 (Fed.
Cir. 1992). SCA Hygiene Products Aktiebolag v. First Quality Baby
Products, LLC, Fed. Cir., No. 2013-1564, 12/30/2014. The Court in
Aukerman held that for patent infringement cases, even claims
seeking damages only within the six-year period limited by 35 U.S.C.
286, laches may still apply if (a) the patentees unreasonable and
inexcusable delay in bringing suit, and (b) material prejudice to the alleged
infringer attributable to the delay.
The December 30th Federal Circuit en banc order called for briefs to
reconsider Aukerman in light of Petrella in terms of (1) whether the court
should overrule the 1992 Aukerman decision such that the defense of laches
is applicable to bar a patent infringement claim for damages based on 35
U.S.C. 286; and (2) whether the defense of laches should be available
under some circumstances to bar an entire infringement suit for either
damages or injunctive relief? See, e.g., Lane & Bodley Co. v. Locke, 150 U.S.
193 (1893). In Petrella, Justice Ginsburg rationalized that each infringing act
starts a new limitations period and any harm that is caused by the plaintiffs
delay in bringing the suit is offset by the Copyright Acts three-year statute of
limitations.
Thus, if the rationale under Petrella is to be applied to Aukerman, taking into
consideration the differences in copyright and patent law, on the face it
seems likely that the Federal Circuit may overrule its previous decision and
hold that the six-year damages limitation under 35 U.S.C. 286 would be
comparable to a statute of limitations and therefore effectively preempts the
laches defense. However, experts have noted that, unlike the copyright
statute, as to which there was a split among the circuitsa split the Supreme
Court was obliged to resolvethe Federal Circuit has consistently interpreted
the patent statute as permitting laches to restrict damages under carefully
defined circumstances. And since the Federal Circuit has virtually exclusive
jurisdiction over appeals in patent infringement case, there is no danger of a

split arising. The upcoming holding will set important precedent for future
patent infringement cases asking for damages under 35 U.S.C. 286.
Toyota Releases Patents to Public Domain
During CES 2015, Toyota surprised its audience by allowing its 5,680 patents relating to
hydrogen fuel-cell cars to be royalty-free between now and 2020. Of the 5,680 patents, 1,970
relate to actual fuel cell stack, 3,350 relate to fuel cell power control software, 290 relate to
hydrogen storage tanks, and 70 relate to hydrogen production technologies.
Inspired by Teslas generosity to the public with its IP, Toyota hopes this strategic move will
drive adoption of hydrogen fuel cell technology in the car market worldwide. The company says
that companies will be able to negotiate the use of Toyotas patents by providing Toyota access to
their patents with similar conditions. In order for these negotiations to be successful, however,
Bob Carter, SVP of automotive operations, believes that there needs to be a concerted and
unconventional collaboration between auto makers, government regulators, academia and energy
providers.
Also announced during CES 2015, Toyota will be launching its first fuel cell vehicle, the Mirai,
later this year.
Trademark Filing Fees Reduced
Effective Jan. 17th, 2015, there is a reduced filing fee for qualified small-business owners for
registering a federal trademark with the USPTO. Last year, the USPTO received over 400,000
trademark applications, amounting to almost a 5% increase from 2013. This reduced filing fee
will likely result in even more applications for the upcoming year.
Filing online using the Trademark Electronic Application System (TEAS), an applicant is given
two options: regular and TEAS Plus. TEAS Plus require a bit more information and is generally
less expensive it is being reduced from $275 per class to $225 per class. Regular has been
reduced from $325 to $275 per class if the applicant authorizes email communication and agrees
to file all responses electronically during prosecution; the option will be known as TEAS
Reduced Fee.
For filing fees of renewal documents filed online, fees have been reduced from $400 to $300. On
an unrelated but nonetheless positive note, the USPTO will also be sending courtesy email
reminders of renewal filing deadlines. Since an active trademark can last indefinitely as long as
the proper renewal documents are filed in time, this courtesy will hopefully save many
unnecessary headaches.
Please call Cislo & Thomas LLP regarding any questions regarding whether or
not you qualify for the reduced trademark filing fees.

Actress Copyright Claims Over A Film She Starred In Revisited

In 2012, actress Cindy Lee Garcia starred in a controversial short film
uploaded on Youtube called Innocence of Muslims, wherein she plays a
character that defames the Prophet Mohammed and has gotten death
threats since the release of the video. Garcia has actively fought to have the
short film taken down and a three-judge panel from the Ninth Circuit Court of
Appeals ruled 2-1 that she had a copyright claim over her performance and
ordered the defendant Google to remove the video at her request.
This ruling received heavy criticism with law professors, Hollywood directors,
and media companies filing briefs in support of Googles appeal. Although
this may be an extraordinary case wherein the public may believe that the
end justifies the means, providing such precedent of giving actors a
copyright claim to the movies or films they star in may be create dangerous
unforeseen legal consequences.
As Alex Lawrence, an IP attorney at Morrison & Forester points out, prior to
this case, there wasnt any question that an actor in the restaurant in the
scene of The Godfather doesnt have a copyright claim in the movie.
The Ninth Circuit has agreed to re-examine the case with an 11-judge panel
that suggests that the larger panel will likely overturn the prior ruling.
Corynne McSherry, an IP director at the Electronic Frontier Foundation, stated
that she would be shocked if the court decided to rehear the case simply to
reinstate the old opinion.

Debatable Filing for I Cant Breathe Trademark

On December 13th, 2014, An Illinois woman, Catherine Crump filed a
Trademark Application for I Cant Breathe with the USPTO for use in
relations to apparel. These famous last words of Eric Garner have been used
by protestors on banners and clothing throughout the country since the July
incident. The controversy sparked when a police officer held Garner in
chokehold as he repeated I cant breathe until his last breathe.
Crump revealed that she has been using the phrase since August 18th but
did not relieve her intentions for registering the mark though she assured
reporters that she was not looking for financial gain by attempting to register
the trademark. Crump further acknowledges that that she has no personal
or business relations to the Garner family.

Phrases like I Cant Breathe have been sought after for trademark
protection a handful of times in the past couple of years (Occupy Wall
Street, Justice for Trayvon, Linsanity) and have been the center of
debate in terms of the balance between ethical lines for trademark
ownership and the fundamentals of American capitalism.

Considering Mediation For Intellectual Property Cases

Jeff Kichaven, one Californias leading mediators, sat with Gene Quinn to
discuss how mediation and settlements may be the best route for intellectual
property cases whenever this is a reasonably possible way to do so.
According to Kichaven, the primary goal in mediation is to allow clients, with
the assistance of their lawyers and the mediator, to make the best decisions
possible under the circumstances. However, the key is not to be unduly
attached to the goal of settlement for the sake of settling but to recognize
the economic and practical and emotional and psychological realties that
people generally speaking do want to work toward settlement whenever
reasonably possible. Especially in intellectual property cases involving fast
moving industries, litigation tends to strip people from focusing on the
marketplace and the present and too wrapped up on the past.
The best time to start considering mediation is when the client is no long in
denial or heated at the opposing party or the situation at hand. Once the
parties are ready to put things behind them, meaning that they are
emotionally and psychologically ready rather than ready in terms of factual
development in the case, a court setting may no longer be in the parties
best interests.
Post-Punctured Tea-Pods Are Not Water-Permeable
The Federal Circuit affirmed the lower courts holding in Teashot. LLC v.
Green Mountain Coffee Roasters Inc. et al., No. 14-1323, Fed. Cir. that teafilled K-Cups do not infringe T-Shots Patent No. 5,895,672.
K-Cups, which are disposable coffee-pods or tea-pods used in Keurig
machines, were alleged to be infringing T-Shots patents, which cover a
disposable tea-pods with a sealed body constructed of a water-permeable
material which allows flow of a fluid through said sealed body to produce a
tea extract from said tea composition. Essentially the T-Shot tea-pod is tea
wrapped and sealed within a coffee filter.

K-Cups, on the other hand, are constructed of impermeable foil lids combined
with a plastic cup-shaped exterior, wherein the tea composition and filter
paper are placed within. T-Shots argument was that, once punctured
through the foil, the K-cup also becomes water-permeable. On appeal, the
Federal Circuit rejected the argument and that a hole-punching scheme does
not fit within a water permeable requirement.
Given that the patent was issued without amendment, there could have been
a doctrine of equivalents theory however the district court refused to allow
the new infringement theory to be presented because T-Shot waived its right
to raise the doctrine of equivalents by failing to timely disclose it as an
infringement theory; the Federal Circuit affirmed that holding.
This case sets precedent that the qualities of an original state of the
invention, such as being water-permeable, does not extend to after a
physical alteration is made to the object.

Teva v. Sandoz
The issue the Supreme Court is faced to tackle is whether claim construction
rulings should be reviewed de novo, or from the beginning, or if the standard
of review should be set higher at a clear error standard, giving district
courts more deference. Rule 52(a) of the Federal Rule of Civil Procedure
requires deferential clear error review over any findings of fact but the
Federal Circuit has consistently reviewed claim construction as conclusions of
law that are allowed for de novo review.
In Teva, the claims at issue relates to methods for manufacturing copolymer1, the active ingredient in Copaxone, owned by Teva and used to treat
multiple sclerosis. Teva sued Sandoz for patent infringement, wherein
Sandozs primary defense was that the claim term average molecular
weight had multiple possible meanings to a person of ordinary skill in the
art and that the claim should be invalid for indefiniteness. The district court
rejected the defense and held that there was enough in the specification for
a person of ordinary skill in the art to understand that the term was referring
particularly to the peak average molecular weight (Mp).
On appeal, the Federal Circuit reversed and reviewed the issue of
indefiniteness de novo. The court found that plain language does not
indicate which average molecular weight measure is intended and neither

the specification nor the prosecution history resolved this ambiguity. Teva
Pharms. USA, v. Sandoz, 723 F.3d 1363, 1369 (Fed. Cir. 2013). The Supreme
Court ruling will provide guidance as to which standard will be applied in
cases going forward.
Commil v. Cisco
The issues before the Supreme Court are whether a good-faith or reasonable
belief that a patent is invalid is enough for a defense for inducement under
35 U.S.C. 271(b) and whether the jury instructions for inducement
adequately met the requisite knowledge standard set out in Global-Tech
Appliances v. SEB, 131 S. Ct. 2060 (2011).
In Commil, Commil sued Cisco for making and using allegedly infringing
equipment and for inducing others to infringe Commils patent that relates to
a method for implementing wireless networks. A jury returned a verdict that
Cisco did directly infringe but did not induce infringement and the judge
granted a retrial on the inducement issue. During retrial, the district court
excluded certain evidence related to Ciscos good-faith belief that the patent
was invalid and instructed the jury to find inducement if they found that
Cisco actually intended to cause the acts that constituted direct
infringement, and knew or should have known that its actions would
induce actual infringement. Commil USA, v. Cisco Sys., 720 F.3d 1361, 1366
(Fed. Cir. 2013). Consequently, the jury found that Cisco was liable for
inducement.
On appeal, the Federal Circuit remanded for a new trial on inducement based
on Global-Tech, in which the Supreme Court had stated that inducement
requires both knowledge of the patents existence and knowledge that the
induced acts would constitute patent infringement. Therefore, the court held
that the district courts instruction of knew or should have known allowed
the defendant to be liable based on merely negligence. The court also held
that the district court should not have excluded the good-faith evidence
because it may negate the specific intent to have another infringe. The
amicus curiae brief by the Department of Justice however argued that
recognizing a good-faith belief in invalidity as a defense to inducement
undermines a patentees ability to enforce the patent. We await the Supreme
Courts stance on this issue as well.