Claims for Mental Processes for Resolving Disputes by Arbitration Were Unpatentable

Case: In re Comiskey, No. 2006-1286 (Fed. Cir. 9/20/07)

The One Sentence Summary: Claims for a method of submitting disputes to arbitration were unpatentable subject matter under 35 U.S.C. § 101 when they were no more than mental processes, but the addition of a computer and communication devices to such claims was remanded to the PTO for whether the addition of these devices was obvious.

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Ninth Circuit Rejects “Trademark Disparagement” As A Cause of Action Under The Lanham Act

Case: Freecycle Network, Inc. v. Oey, No. 06-16219 (9th Cir. 9/26/07)

The One Sentence Summary: Plaintiff’s preliminary injunction preventing defendant “from making any comments that could be construed as to disparage upon [plaintiff's] possible trademark and logo” was vacated because defendant’s actions were not a “use in commerce,” created no likelihood of confusion, and did not disparage plaintiff’s products or services; and to the extent the injunction was based on a “trademark disparagement” claim under the Lanham Act, the district court abused its discretion because no such cause of action exists under the Act.

What They Were Fighting About: Plaintiff, a nonprofit corporation “dedicated to encouraging and coordinating the reusing, recycling, and gifting of goods,” sought to obtain trademark protection for its marks, “The Freecycle Network,” and “Freecycle.” The term “freecycle,” however, had previously been used to refer more generally to the act of recycling goods for free via the internet. Defendant made various statements on the internet that plaintiff lacked trademark rights in “freecycle” because it was a generic term, and he encouraged others to use the term in its generic sense and to write letters to the United States Patent and Trademark Office opposing plaintiff’s pending registration. Plaintiff sued, alleging that the defendant’s statements constituted contributory trademark infringement and trademark disparagement under section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a), as well as injurious falsehood, defamation, and intentional interference with a business relationship under Arizona law. The district court granted a preliminary injunction.

Ninth Circuit Holdings:

• Defendant’s actions were outside the scope of the Lanham Act because his actions likely did not constitute a “use in commerce” given that his internet postings were not made “to promote any competing service or reap any commercial benefit whatsoever.”
• Although plaintiff’s complaint alleged “trademark disparagement” under § 1125(a), no such claim exists under the Lanham Act. “That the Lanham Act’s text does not contemplate a trademark disparagement claim is borne out by the absolute dearth of precedent analyzing such a claim under the Act.”
• To the extent plaintiff argued that defendant should be prevented from using plaintiff’s claimed mark FREECYCLE in its generic sense, the court held that plaintiff’s “asserted mark — like all marks - is always at risk of becoming generic and thereby losing its ability to identify the trademark holder’s goods or services. . . . The Lanham Act itself, however, contains no provision preventing the use of a trademarked term in its generic sense.”

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Plaintiff Could Not Assert Patent Claims When It Received Only Limited Rights Under the Patent From a Bankruptcy

Case: Morrow v. Microsoft Corp., No. 2006-1512, 2006-1518, 2006-1537 (Fed. Cir. 9/19/07)

The One Sentence Summary: Plaintiff that had received the right in a bankruptcy to sue for patent infringement, but which had not received the right to license the patent, did not have constitutional standing to bring patent claim because it could not establish injury in fact.



Federal Circuit Holdings:

• Patent law rather than bankruptcy law determines whether a party can maintain a patent claim.
• The constitutional requirement of injury in fact was not met where the plaintiff had received the right in a bankruptcy to bring patent litigation but did not have the other rights under the patent including the right to license the invention.
  
  

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Literal Infringement Not Present Because An Outer Surface Is Not the Same as an Interior Surface

Case: Gillespie v. Dywidag Syst. Int'l, USA, 2006-1382 (Fed. Cir. 9/6/07)

The One Sentence Summary: The Federal Circuit found no literal infringement and reversed the district court's judgment, after modifying its claim construction, where the district court had effectively ignored a prosecution argument by the patentee which had illustrated how he understood the claim limitation, and had instead used a broader construction of the limitation under which there could be literal infringement.

What They Were Fighting About: Gillespie's patent for mine roof bolts included the limitation that the bolt have a "drive collar" and "an outer surface defining a drive head that accepts a driving mechanism", the only claim limitations the Dywidag bolt lacked. Gillespie's patent showed a hexagonal bolt, but the specifications stated a square or other-shaped bolt would do. The Dysidag bolt, however, was turned via a key socket, and so the question was whether literal infringement could be found. The parties stipulated that it could if the district court's claim construction were correct.

Federal Circuit Holdings:

• In reviewing the claim construction, the Federal Circuit noted that Gillespie had overcome a rejection of obviousness by distinguishing prior art that showed a bolt-like rock anchor having a head with a recess in the end, arguing it was impractical for engagement by a mine roof bolting machine. While the examiner did not cite this in his Reasons for Allowance, that was immaterial to the Federal Circuit's claim construction -- what was significant is that Gillespie argued this distinction, which showed what one of ordinary skill in the art would have understood the limitation to mean.


• The Federal Circuit disagreed with the district court's conclusion that a person of ordinary mechanical skill would read the specifications, drawings and claims to construe "outer surface" of the drive collar to include a collar whose interior, not exterior, accepts the drive tool. It observed that here the specifications and drawing showed a drive collar whose outer surface accepted the drive tool. While the outer surface need not be any particular shape, it must be outer to meet the claim limitation.


• By modifying the claim construction to require that a driving mechanism be applied to the outer surface, literal infringement did not exist, and the judgment was reversed.
  
  

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Lack of Enablement for the Full Claim Scope Dooms Patent

Case: Automotive Tech. Int'l v. BMW of North America, Inc., 2006-1013, 1037 (Fed. Cir. 9/6/07)

The One Sentence Summary: Affirming summary judgment finding of invalidity and noninfringement based on conclusion that the claims were invalid for lack of enablement, where the specification only described the manner and process of making one embodiment of the claimed invention.

What They Were Fighting About: Prior art sensors for side impacts were crush sensors, triggered when crushed or deformed, which closed a circuit. The problem was they were not triggered where the impact did not crush the side, but was still so severe that the occupant needed side protection. Velocity-type sensors would solve this problem, but conventional wisdom had been they would not reliably trigger for side impacts (though they had been used for front impacts). Here, the inventors found a design that did work for side impacts. The specifications described both mechanical and electronic sensors. The claim included the phrase "means responsive to the motion of said mass upon acceleration of said housing in excess of a predetermined threshold value, for initiating an occupant protection apparatus." It was agreed by all that this was a means plus function limitation, where the function was initiating an occupant protection apparatus. However, the parties disagreed as to the corresponding structure, and whether electronic sensors were included.

Federal Circuit Holdings:

• The district court had found that the claim included both mechanical and electronic sensors, but the specification failed to provide sufficient detail allowing one of ordinary skill in the art to make and use the electronic sensor without undue experimentation. The only figure showing the electronic sensor failed to show any specific design for it, and ATI's representative had admitted the specification failed to disclose structure for the general reference to sensing technologies. Moreover, the description was vague, and failed to disclose a reasonable basic enabling structure for using existing electronic sensing technologies to achieve the desired characteristics.


• The Federal Circuit rejected the argument that merely because one embodiment, for a mechanical sensor, was enabled, that was sufficient to satisfy the enablement requirement for an electronic sensor. Having construed the claims to cover both mechanical and electronic sensors, both types must be enabled. There must be reasonable embodiment of the scope of the range.


• The Federal Circuit noted that the only drawing of the electronic sensor was described as a "conceptual view" in the specification, and was a very general view. One of the inventors had even described that figure as "not meant to represent any specific design or anything, just a concept." Similarly, the description failed to provide a structure or description of how a person of ordinary skill in the art would make or use an electronic side impact sensor.


• Citing Genentech, Inc. v. Novo Nordisk A/S, 108 F.3d. 1361, 1366 (Fed. Cir. 1997), the Federal Circuit reiterated that the specification, not the knowledge of one ordinarily skilled in the art, must supply the novel aspects of the invention for adequate enablement. Here, the novel aspect was side impact sensors, so it was insufficient to merely state that known technologies could be used.


• The Federal Circuit further noted that the inadequacy of the electronic sensor enablement was highlighted by the detailed description of the mechanical sensor. If two full columns were needed for the latter, why did the electronic sensor, which was an essential aspect of the invention, not require at least as much disclosure?


• The panel further reasoned that expert testimony offered to show why undue experimentation was not required to develop the electronic sensors was inadequate because it failed to discuss what types of tests would have been needed to adapt existing electronic sensors to this purpose, and provided no detail on adapting existing technologies.
  

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Statutory Damages Under California's Right of Publicity Statute Limited to One Award Per Cause of Action

Case: Miller v. Collectors Universe, Inc., Calif. 4th App. Dist. No. G036432 (8/30/07)

The One Sentence Summary: California's Right of Publicity Statute, Civil Code § 3344, allowed only one award of statutory damages of $750 when only a single cause of action arose from the issuance of multiple certificates of authenticity bearing plaintiff's name.


What They Were Fighting About: After plaintiff left his employment at Collectors Universe, Collectors Universe continued to issue certificates of authenticity for collectors items listing plaintiff as one of a panel of authenticators. A total of 14,060 of these certificates were issued over plaintiff's objection. Plaintiff sued under California Civil Code section 3344 for unauthorized use of his name and identity, and sought an award of statutory damages of $750 for each of the 14.060 certificates for a total of $10,545,000.

California Fourth Appellate District Holdings:

• The "single publication" rule which limits a plaintiff to a single tort cause of action for multiple copies of a harmful publication did not apply here because there was no mass communication to a large audience as required by the single publication rule. Rather, each of the certificates of issue were issued to individuals at different times and bore different serial numbers.
• The issuance of the 14,060 certificates allowed only a single award of statutory damages of $750 because the certificates created only one cause of action in that they were issued for a common purpose under a common plan.
• The case should be remanded for trial to allow plaintiff to attempt to prove actual damages and punitive damages which plaintiff had elected not to pursue in light of the trial court's incorrect interpretation of the statutory damages provision.
  
  

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Scope of ANDA Injunction Cannot Go Beyond Compounds Listed In ANDA

Case: Forest Laboratories, Inc., et al. v. Ivax Pharmaceuticals, Inc., et al. (Fed. Cir. No. 07-1059, 9/5/07)

The One Sentence Summary: The district court was affirmed in rejecting anticipation, obviousness and broadening reissue challenges to a patent, but the patent infringement injunction arising from an Abbreviated New Drug Application ("ANDA") was too broad in covering compounds not listed in the ANDA.


Federal Circuit Holdings:

• The district court did not err in finding that the patent was not anticipated by a prior reference where the reference discussed the patented compound but did not disclose how to isolate it.
• The district court did not err in rejecting an obviousness challenge to the patented enantiomer in light of evidence showing the failure of others to isolate the enantiomer.
• The correction on reissue of a typographical error in the optical sign of the patented compound was not an improper broadening reissue where the mistake would have been apparent to one of skill in the art.
• The injunction issued by the district court was too broad in that it covered other products under the patent even though those products were not listed in the ANDA application.
  
  

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Past Discord Between the Parties Supported High 29.2% Reasonable Royalty Patent Damages Award

Case: Mitutoyo Corp. v. Cent. Purchasing, LLC, Fed. Cir. No. 2006-1312, 2006-1343 (9/5/07)

The One Sentence Summary: A jury's award of a 29.2% royalty rate for patent infringement "reasonable royalty" damages was appropriate in light of defendant's high profit margin and the contentious history of the parties.



Federal Circuit Holdings:

• The trial court's infringement finding was affirmed over a claim interpretation challenge concerning whether a comparison of phase must be direct or indirect. As the trial court found, an indirect comparison was sufficient for infringement due to statements in the specification which allowed that interpretation of the claim language.
• The trial court erred in dismissing the willful infringement claim for failure to prosecute it. Plaintiff's failure to move for summary judgment on the claim did not constitute a waiver of the claim.
• A distributor who had a license to resell plaintiff's products made under the '902 patent in the United States did not have standing to sue under the patent because another company also distributed goods under the patent.
• The trial court correctly ruled that there was no market overlap between plaintiff's high-end calipers and defendant's inexpensive infringing calipers, so no lost profits damages could be awarded by a jury.
• The trial court's award of a 29.2% royalty rate (plaintiff's profit margin on its sales) was reasonable as the result of a hypothetical negotiation given defendant's 70% profit margin and the contentious history between the parties.
• The trial court erred in calculating lost royalties using the sales of a company unrelated to defendant when there was no evidence to show defendant would have agreed to pay such royalties.

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Deceptive Commitment to License on RAND Terms May Be Antitcompetitive Conduct Just Like Deceptive Nondisclosure of IP to Standard Setting Organization

Case: Broadcom Corp. v. Qualcomm Inc., Case No. 06-4292 (3rd Cir. 9/4/07)

The One Sentence Summary: In a consensus-oriented private standard setting environment, a patent holder's intentionally false promise to license essential proprietary technology on fair, reasonable and non-discriminatory terms, coupled with a standard setting organization's reliance on that promise when including the technology in a standard, and the patent holder's subsequent breach of that promise, is actionable anticompetitive conduct in violation of Section 2 of the Sherman Act.


What They Were Fighting About: Broadcom alleged that the European Telecommunications Standards Institute (ETSI) and its U.S. counterparts included Qualcomm's proprietary technology in the Universal Mobile Telecommunications System (UMTS) standard in reliance on Qualcomm's commitment to license that technology on fair, reasonable and non-discriminatory (FRAND) terms. Subsequently, Qualcomm sought licenses with non-FRAND terms.

Third Circuit Holdings:

• Reverses dismissal of Broadcom's claims of monopolization and attempted monopolization.
• In recent actions brought before the FTC, patent holders have faced antitrust liability for misrepresenting to standard setting organizations that they did not hold intellectual property rights in essential technologies, and then, after a standard has been adopted, seeking to enforce those rights.
• Deception in a consensus-driven private standard-setting environment harms the competitive process by obscuring the costs of including proprietary technology in a standard and increasing the likelihood that patent rights will confer monopoly power on the patent holder.
• Deceptive FRAND commitments, no less than deceptive nondisclosure of intellectual property rights, may result in such harm.
• For its monopolization claim, Broadcom adequately defined the relevant market as the market for Qualcomm's proprietary WCDMA technology, a technology essential to the implementation of the UMTS standard. The incorporation of a patent into a standard makes the scope of the relevant market congruent with that of the patent.
• For its attempted monopolization claim, Broadcom adequately alleged that Qualcomm engaged in anticompetitive practices with the specific intent to obtain a monopoly over the global UMTS chipset market. Broadcom's Complaint also alleged sufficient facts as to the dangerous probability of Qualcomm obtaining monopoly power in the UMTS chipset market.
• Broadcom lacked standing with regard to claims based on harm to markets in which Broadcom neither competes nor seeks to compete. Allegations that Qualcomm, by maintaining its monopolies in certain markets intended to cause harm to Broadcom in other markets, were speculative and alleged only remote injury.

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Arbitrator's Order Enforcing Comedy Club Restrictions In Trademark Agreement Violated California Non-Compete Rules

Case: Comedy Club, Inc. v. Improv W. Assocs., 9th Cir. No. 05-55739, 05-56100 (9/7/07)

The One Sentence Summary: Section 16600 of California's Business and Professions Code that prohibits restraints on competition precluded an arbitrator from enjoining the opening of comedy clubs in counties other than where the parties had opened an "Improv" club pursuant to a trademark license agreement.

What They Were Fighting About: An arbitrator had found that CCI had breached a contract that allowed it to use the "Improv" trademark for opening comedy clubs.


Ninth Circuit Holdings:

• The court lacked jurisdiction to review the district court order compelling arbitration because an appeal was not taken in time.
• The arbitration agreement was ambiguous as to whether the arbitrator could arbitrate equitable claims, so the policy favoring arbitration led the panel to interpret the agreement as allowing arbitration of equitable claims.
• California Business and Professions Code section 16600 and its prohibitions on non-competes allowed "in-term" prohibitions against opening comedy clubs in areas where CCI had opened an Improv club under the parties' contract.
  
• The arbitrator lacked authority to bind non-parties that were not in privity with CCI in its injunction against operating comedy clubs.
  
• The arbitrator's award violated California's Business and Professions Code section 16600 by prohibiting CCI from opening comedy clubs in counties where it does not operate a comedy club.
  
  

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Ninth Circuit Allows Enforcement of Agreement to Pay Royalties on Invention and Its Improvements

Case: Zila, Inc. v. Tinnell, No. 05-15031, 05-15087 (9th Cir. 9/7/07)

The One Sentence Summary: The Ninth Circuit panel held that a contract of indefinite term for the payment of royalties on a herpes treatment invention and its improvements could be enforceable while any of the patents on the invention and its improvements remained in force, and remanded for a determination of whether the plaintiff should have been named as the inventor on a 1992 patent for a gel delivery method.


What They Were Fighting About: Tinell had invented a treatment for herpes lesions and applied for a patent. and then assigned his rights in the invention and improvements to Zila in exchange for five percent of Zila's royalties on the invention and improvements in perpetuity. Zila stopped paying after the first patent on the invention lapsed even though other patents remained in force. The district court ruled for Zila based upon Brulotte v. Thys, 379 U.S. 29 (1964) which held a contract for royalties past the expiration of a patent was unenforceable as an invalid extension of the limited monopoly granted by the patent.

Ninth Circuit Holdings:

• Brulotte is a matter of federal preemption of state law, and did not extend to an agreement to pay royalties for Canadian sales while a Canadian patent remained in force.
  
• Brulotte did not prevent an agreement such as that here for payment of royalties while any patent on the invention or its improvements was still in effect.
• The district court should determine whether Tinnell should have been named as an inventor on a 1992 patent that remained in force.
  
  

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Where Patentee Failed to Amend to More Clearly Define the Term "Stably Retain," Board's Broad Interpretation Would Control

Case: In re Icon Health and Fitness, Inc., 2006-1573, (Reexamination No. 90/005, 117) (Fed. Cir. 8/1/2007)

The One Sentence Summary: The Federal Circuit affirmed the Board's decision holding Icon's claims based on a treadmill with a folding base unpatentable for obviousness, based on the combination of an advertisement for a folding treadmill and a patent for bed springs.

What They Were Fighting About: Icon's treadmill claims included a limitation calling for a "gas spring connected between the tread base and the upright structure to assist in stably retaining" the tread base. An advertisement from another company showed a folding treadmill, and a prior patent existed for gas springs used to hold a folding bed in a cabinet or recess. The issue was therefore whether Icon's claim was obvious in light of this prior art.

Federal Circuit Holdings:

• The bed springs were analogous art, because like Icon's springs, both address the need to stably retain a folding mechanism, and both also contained discussions for creating a lifting force. The Federal Circuit concluded that analogous art could come from any area describing hinges, springs, latches, counterweights, or similar mechanisms -- including a folding bed.
• Moreover, the bed spring inventor was addressing a similar problem to that Icon had addressed, specifically, devising counterbalancing mechanisms.
• The Federal Circuit rejected the argument that the bed spring patent taught away from Icon's invention -- while the bed springs were a dual action spring, and Icon's were single action, the bed spring patent had discussed that single action springs would produce the same result. Icon had also argued the bed springs would have provided the wrong type of force for its purposes, but the Federal Circuit noted that while that argument might have carried weight had Icon narrowed its claims, having failed to do so, the argument lacked force.
• Given the broad scope of Icon's claims, the gas springs patent for beds fell within that scope, because Icon had not limited the manner in which its gas springs would assist in stably retaining the tread base. Indeed, the Board had specifically criticized Icon for relying solely on attorney argument on this question.
• Finally, the Federal Circuit noted that the specifications had provided little discussion of the definition of "stably retain." Icon's failure to amend to more clearly define the term meant it must now submit to the Board's interpretation.
  
  

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A Copyright Registration Certificate Provides Constructive Notice of Conflicting Ownership Rights for Purposes of Priority under 17 U.S.C. § 205(d)

Case: Latin Am. Music Co. v. Archdiocese of San Juan of the Roman Catholic & Apostolic Church, (1st Cir. No. 05-2806, 8/16/07)

The One Sentence Summary: Examining: 1) the denial of infringement claims on summary judgment, 2) the allocation of special master’s fees, 3) the dismissal of a party’s claims, counterclaims and defenses as a sanction for not complying with court orders, and 4) a finding of copyright infringement on summary judgment, the First Circuit affirmed in part and reversed in part the district court’s rulings in this music copyright infringement suit.

What They Were Fighting About: Latin American Music Company (“LAMCO”) and Asociacion de Compositores y Editores de Musica Latino Americana (“ACEMLA”) filed suit against various radio broadcasters, alleging copyright infringement of 51 songs. The radio broadcasters brought counterclaims against LAMCO and ACEMLA and filed third party complaints for indemnification against the American Society of Composers, Authors, and Publishers (“ASCAP”). ASCAP disputed with LAMCO and ACEMLA over the rights to five of the songs at issue, and they agreed to use the resolution of that dispute as a guide to resolving the ownership rights to the rest of the songs. Several music publishers (the “Publishers”) filed claims against LAMCO and ACEMLA, alleging that they owned or controlled the copyrights to songs that LAMCO and ACEMLA were infringing. The case expanded to involve copyrights to over five hundred songs, after additional claims and parties were added.

In this appeal, LAMCO and ACEMLA challenged the district court’s rulings, which: 1) denied on summary judgment their infringement claims relating to five songs; 2) allocated to LAMCO and ACEMLA half of the obligation to pay the fees of a special master hired to determine ownership rights; 3) dismissed their claims, counterclaims and defenses as a sanction for failure to comply with court orders; and 4) held on summary judgment that they infringed copyrights held by the Publishers.

First Circuit Holdings:

• Summary judgment denying LAMCO and ACEMLA’s infringement claims was affirmed as to four of the five songs at issue but was reversed and remanded as to one song because material facts regarding the transfer of rights remained in dispute. Under the good faith and lack of notice requirements of the recording statute, 17 U.S.C. § 205(d), a copyright registration certificate provides constructive notice of conflicting ownership interests, and therefore, recording of the transfer to the prior transferee is not required for maintaining its priority.


• The allocation of the special master’s fees was not an abuse of discretion because the district court has the broad discretion to allocate the fees as appropriate under the circumstances of the case. The court rejected LAMCO and ACEMLA’s argument that the Publishers should have been required to pay the majority of the fees because of their disproportionate wealth and because the Publishers complicated the case. The court noted that LAMCO and ACEMLA had various opportunities to demonstrate that they were unable to pay their share of the fees but did not do so.


• Because of LAMCO and ACEMLA’s pattern of delaying conduct throughout the case, the district court did not abuse its discretion by dismissing LAMCO and ACEMLA’s claims, counterclaims and affirmative defenses as a sanction for failing to comply with the court’s orders.


• Infringement does not occur by merely authorizing others to commit an infringing act; there must be a showing of actual use in an infringing manner after the authorization.


• Because the district court did not evaluate whether LAMCO and ACEMLA committed infringing acts beyond authorization, the First Circuit could not determine whether there was sufficient undisputed evidence to grant summary judgment on infringement. Therefore, the district court’s grant of summary judgment in favor of the Publishers on their infringement claims against LAMCO and ACEMLA was reversed and remanded for further proceedings on this issue.


• The First Circuit rejected LAMCO and ACEMLA’s claim that they retained a “fifty percent writer’s performance share” in songs even after they relinquished the copyrights. Even if they did prove their theory of retained performance rights, to the extent it was a defense, it was dismissed as part of the sanction imposed by the district court.


• The district court correctly determined that LAMCO and ACEMLA lacked standing to seek rescission of the Publishers’ agreements with composers because LAMCO and ACEMLA were not parties to the agreements they were seeking to rescind, and they did not show a close relationship with any of the parties who possessed rights or a hindrance of the parties’ ability to protect their own rights. Moreover, to the extent the rescission theory was used as a defense, it was dismissed as part of the sanction.

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Enabling Disclosure in Foreign Application Provides Priority Despite Later Developments in Understanding of the Process

Case: Frazer v. Schlegel, Case No. 06-1154 (Interference No. 104, 776) (Fed. Cir. 8/20/07)

The One Sentence Summary: Board erred in denying priority based on an Australian application that contained complete details of the method that was the subject of the interference count, and depicted the papillomavirus-like particle of the count with full disclosure of how to produce it, even though subsequently the inventor refined his understanding of the process.


What They Were Fighting About: When the Australian application was filed Frazer believed that both the L1 and L2 genes had to be expressed together from the same plasmid, but his later work showed that only L1 protein was necessary; the Board found that "[r]evising hypotheses in the face of evidence is a hallmark of well-conducted research," and ruled that Frazer was not entitled to any date of disclosure until he accurately and fully understood the mechanism. and awarded priority to Schwlegel.

Federal Circuit Holdings:

• Holding when reliance is on a patent document already filed, the question is whether the document discloses the invention of the count by meeting the written description and enablement requirements of 35 U.S.C. § 112, for a filed application serves as a constructive reduction to practice of its content.
• The Board erred in denying Frazer's entitlement to the date of the Australian patent application, because that application had complete details of the method that was the subject of the interference count, and depicted the particle at issue with full disclosure of how to produce it. Thus, the patent application was a constructive reduction to practice of the invention disclosed therein -- it was not merely proposing an unproved hypothesis or guess.
  
  

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Second Circuit Finds That Settlement Prices Listed on New York Mercantile Exchange Are Not Afforded Copyright Protection

Case: N.Y. Mercantile Exch., Inc. v. IntercontinentalExch., Inc.,No. 05-5585 (2d Cir. August 1, 2007)

The One Sentence Summary: Under the merger doctrine, settlement prices are not afforded copyright protection because to do so would effectively accord protection to the idea itself.

What They Were Fighting About: Plaintiff is in the business of determining and publishing settlement prices for futures contracts. These settlement prices are used to value individual accounts. In conducting its business, Defendant forwards Plaintiff’s settlement prices to a third-party. Plaintiff sued, alleging copyright infringement. In its defense, Defendant argued, in the alternative, that settlement prices are facts that cannot be copyrighted and, even if they are not facts, the idea of the prices have merged with their expression and thus, are not protected under copyright law.

Second Circuit Holdings:

• The Court chose not to address whether settlement prices are original. Instead, for purposes of Defendant’s motion for summary judgment, the Court assumed that settlement prices could be protected, but nonetheless, granted Defendant’s motion based on the merger doctrine.


• The Court found that “‘[i]t has been long accepted that copyright protection does not extend to ideas; it protects only the means of expression employed by the author.’ Because ‘ideas are too important to the advancement of knowledge to permit them to be under private ownership,’ and because ‘open public debate, which is essential to a free democratic society, requires free access to the ideas to be debated,’ ideas cannot be copyrighted. Instead, ‘only the manner of [an idea’s] ‘expression’’ is copyrightable.” (internal citations omitted). Under the merger doctrine, “even expression is not protected in those instances where there is only one or so few ways of expressing an idea that protection of the expression would effectively accord protection to the idea itself.”


• Given that there was only one way to express the settlement prices for futures contracts (i.e., a number), the Court held that “[t]o grant NYMEX copyright protection here ‘would effectively accord protection to the idea itself.’”
  
  

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Ninth Circuit Affirms Preliminary Injunction for Albertson's Restraining Competing Retail Grocer from Using "Lucky" Trademark

Case: Grocery Outlet Inc. v. Albertson's Inc., No. 06-16380 (9th Cir. 8/9/07)

The One Sentence Summary: Ninth Circuit affirmed the district court's granting of a preliminary injunction to Albertson's, based on the possibility of irreparable injury and the strong likelihood of its prevailing on the merits despite competitor Grocery Outlet's asserted defense of abandonment of "Lucky" trademark by nonuse.


What They Were Fighting About: Grocery Outlet, a competitor of Albertson's in the retail grocery industry, contended that Albertson's abandoned the "Lucky" trademark by publicly announcing after a 1999 merger that "Lucky" stores were being converted to Albertson's stores. Albertson's sought a preliminary injunction for trademark infringement in the Northern District of California to restrain Grocery from using the "Lucky" mark. The district court granted the motion, finding at the preliminary injunction stage that Albertson's legally owned the "Lucky" mark and rejecting Grocery's abandonment defense. Grocery appealed.

Ninth Circuit Holdings:

• Ninth Circuit held that the district court did not abuse its discretion in finding that Albertson's demonstrated a strong likelihood of success on its trademark infringement claim and the possibility of irreparable injury in the absence of a preliminary injunction.


• On appeal, Grocery did not dispute that its use of the "Lucky" mark for retail grocery services was likely to cause consumer confusion. Thus, whether Albertson's was likely to succeed on the merits turned on whether Grocery's abandonment defense would be successful.


• Abandonment by nonuse is a defense under the Lanham Act that requires proof of both the mark owner's discontinuance of trademark use and intent not to resume such use.


• Ninth Circuit concluded that Albertson's offered sufficient evidence of its intent, during the short period of alleged nonuse, to resume use of the "Lucky" mark within the reasonably foreseeable future. Accordingly, the district court did not abuse its discretion in rejecting Grocery's defense of abandonment at the preliminary injunction stage.


• On the standard of proof for the abandonment defense, Grocery adopted the clear and convincing evidence standard in its briefing in the district court. The Ninth Circuit found Grocery to have waived any challenge on this point and decided not to resolve the disputed issue of whether the standard of proof is preponderance of the evidence or clear and convincing evidence.


• Two circuit judges agreed with the court's per curiam opinion but wrote separate concurring opinions to express their divergent views on the standard of proof for an abandonment defense under the Lanham Act. While the court's per curiam opinion did not discuss the issue, the concurring opinions provide future litigants in Ninth Circuit courts with their legal arguments for either a preponderance of the evidence or a clear and convincing evidence standard of proof.

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