The IP Law Blog

Focusing on legal trends in data security, cloud computing, data privacy, and anything E

Everything Old is New Again: Post-Expiration Patent Royalties are a Bad Idea!

Posted in Patent Law

On Monday, the United States Supreme Court Audrey-Millemann-03_webupheld the longstanding case law that prohibits a patent owner from receiving royalties after a patent has expired. In Kimble v. Marvel Entertainment, LLC (June 22, 2015) 2015 U.S. LEXIS 4067, the Court ruled in favor of Marvel, the licensee of a patent for a Spiderman web-shooting toy.

The plaintiff, Stephen Kimble, had patented the web-shooting toy. Kimble had talked to Marvel about licensing his patent, but Marvel declined to take a license. Shortly thereafter, Marvel began selling a suspiciously similar web-shooting toy.

Kimble sued Marvel for patent infringement. The parties settled. Pursuant to the settlement, Marvel bought the patent from Kimble for a lump sum and a three-percent royalty on future sells of the toys.

Marvel later filed a declaratory judgement action in the district court, seeking a judgment that Marvel could stop paying Kimble royalties when the patent expired in 2010. Marvel relied on Brulotte v. Thys Co., 379 U.S. 29 (1964), in which the Supreme Court had held that a patent owner could not receive royalty payments after the patent had expired, and that agreements that provided for post-term patent royalties were per se unlawful.

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Richard Prince once again pushes the limits of fair use

Posted in Copyright Law

Richard Prince is either on the very edge of fair use or is engaging in Scott-Hervey-10-webblatant copyright infringement. Unlike most however, Prince has been down this road before; accused of infringement and a defense based entirely on fair use. What is different about Prince, and what might explain the sheer boldness of his recent project, is the last time Prince was accused of copyright infringement, he ultimately prevailed on appeal to the 2nd Circuit.

Prince is a practitioner of what has come to be known as “appropriation art,” that is, art – mainly visual art – that incorporates and utilizes third-party images and photographs, which are often the subject of copyright.

In 2008, Prince created thirty works of art that comprised a series he called Canal Zone. The works in Canal Zone made use of a number of images from Patrick Cariou’s photography book on Rastafarians in Jamaica called “Yes Rasta”. In the Canal Zone works, Prince had enlarged, cut up, and painted over Cariou’s images, as well as placed them with other images. While not directly a factor in the Court’s infringement analysis but certainly a motivating factor behind Cariou’s lawsuit, while Cariou had little commercial success with his book, Yes Rasta, Prince sold eight of the Canal Zone works for a total of over $10 million.

Cariou initially won on summary judgment at the district court level, and obtained a permanent injunction compelling Prince to turn over all of the unsold Canal Zone works for sale, disposal or destruction. In its ruling, the United States District Court for the Southern District of New York held that Prince’s works did not qualify as a “fair use” because, among other things, they were not transformative in that they did not “comment on” Cariou’s photographs or the subjects of the photographs, and Prince himself did not articulate any transformative intent in connection with the use of the images. Pic2

On appeal, Prince challenged the lower court’s analysis of the first fair use factor, the purpose and character of the use. The purpose of this factor is to test whether the allegedly infringing work is “transformative”. A work is transformative when it adds something new to the work allegedly infringed, with a further purpose or different character, altering the original work with new expression, meaning, or message. A work is transformative if it does something more than repackage or republish the original copyrighted work. A transformative work is one that serves a new and different function from the original work and is not a substitute for it. As the Supreme Court noted in Campbell v. Acuff-Rose Music, Inc., “the more transformative the new work, the less will be the significance of other factors, … that may weigh against a finding of fair use.”

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Just Because You Think It’s Invalid Doesn’t Mean You Don’t Infringe!

Posted in Patent Law

A U.S. patent is “presumed” valid. Audrey-Millemann-03_webThat means a patent owner does not need to prove the patent is valid in a suit for infringement. And, as the U.S. Supreme Court just explained in Commil United States, LLC v. Cisco Systems, Inc., 2015 U.S. LEXIS 3406 (May 26, 2015), a defendant’s belief that the patent is invalid is not a defense to infringement.

Commil owned a patent that covered a method for increasing the speed of wireless networks. Commil sued Cisco for patent infringement, alleging that Cisco directly infringed the patent by making and using certain network equipment. Commil also alleged that Cisco indirectly infringed the patent by inducing infringement, that is, by selling the equipment to others and instructing them how to use the equipment, causing them to thereby infringe the patent.

At trial, the jury found that Cisco had directly infringed the patent. With respect to the claim of indirect infringement, Cisco contended that it did not have the required specific intent to induce infringement because it believed in good faith that the patent was invalid. The district court for the Eastern District of Texas ruled that Cisco’s evidence of its good faith belief was not admissible as a defense to infringement. The jury found Cisco liable to Commil and awarded Commil $63.7 million in damages.

Cisco appealed to the Federal Circuit Court of Appeals, arguing that the district court’s ruling was erroneous. The appellate court reversed the district court, holding that a good faith belief that a patent is invalid is sufficient to negate the required specific intent to induce infringement.

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“Desert Warrior” Vanquished: Google Defeats Cindy Lee Garcia’s Copyright Claims

Posted in Copyright Law

Cindy Lee Garcia thought she was playing a bit part in “Desert Warrior,” Scott-Plamondon-03_weban adventure film being made by an amateur film maker. The film was never completed. Instead, Ms. Garcia’s performance was re-purposed, and her physical on screen appearance was used in a film titled “Innocence of Muslims,” with her voice redubbed, changing her speaking part so that she appeared to being asking, “Is your Mohammed a child molester?” The film was uploaded to YouTube. An outraged Muslim cleric saw the video and thereafter issued a fatwa directing his followers to kill everyone involved with the film. Ms. Garcia was nonplussed.

Garcia filed suit seeking, among other things, a restraining order directing Google to remove the film from YouTube. Primarily, Garcia claimed that the video infringed a copyright which gave her the exclusive right to control the use of her performance. Granting the injunction, the district court ruled that Garcia was likely to succeed on her copyright claim because it believed she held a valid copyright interest in her performance, and that the film maker had exceeded the terms of a license granted by plaintiff when she was misled into acting in “Innocent Muslim,” under the false pretense that she was playing in “Desert Warrior.” The court also determined that Garcia faced irreparable harm because Garcia had been receiving death threats. Google appealed to the Ninth Circuit. Initially the Ninth Circuit agreed with Garcia, however on May 18th, sitting en banc, the Ninth Circuit reversed.

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California Homegrown: Protect Your Pot!

Posted in Trademark Law

Let’s face it, we live in a progressive era. transparentMany things that were once taboo in the eyes of the law have become not only socially acceptable, but legal. For example, twenty years ago, if a California state police officer saw you walking down the street smoking what he knew to be marijuana, you were unlikely to walk away without at least a citation. Now, that same officer would have to think twice before jumping to a conclusion and writing you a citation for possession of marijuana, because it is now legal to possess cannabis for medically related purposes in this state. In fact, as of the date of this article, 23 states and the District of Columbia have legalized the possession of marijuana in some form. Four states have even legalized it for recreational use.

At this point, you are likely wondering why I am yammering on about the legalization of marijuana in an intellectual property article. Not only is it unrelated, but honestly, its old news. However, the booming business that is emanating from the legalization of marijuana is not old news. That is exactly what I am here to discuss. If you have read any of my previous articles, you know that I am a strong proponent of protecting the goodwill in your brand through the federal trademark laws. This should not come as a surprise; it is more beneficial and less costly for my clients to retain my services for preventative intellectual property counseling than it is for litigation, or to lose goodwill in their brand.

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That Would .SUCK

Posted in Cyberspace Law

The word that comes after the period in a domain name is referred to as a topScott-Hervey-10-web level domain (“TLD”) and there seems to be a TLD for everything. There are TLDs that reflect geographic regions such as “.ASIA” for the Asia-Pacific region and .IRISH for the global Irish community. There are numerous other TLDs that reflect a wide variety of interests, including professions (“.ACTOR” for actors and “.ACCOUNTANTS” for accountants). Just when you think you have seen everything, along comes a proposed new TLD that causes a huge uproar among trademark owners.

Vox Populi Registry Inc. was granted the right to operate the registry for a “.SUCKS” TLD. The stated purpose of the .SUCKS TLD is to facilitate First Amendment criticism of companies, organizations or products.   Trademark owners say that Vox is a shakedown artist and the sole purpose of the .SUCKS registry is to cause trademark owners to purchase expensive domains in order to defend their brands. In support of this allegation, trademark owners point to the fact that Vox will charge trademark owners approximately $2500 and up to register a .SUCKS domain name during the Sunrise Period. (A Sunrise Period is a period of time during the rollout of a new TLD in which trademark owners have the right to register domain names which reflect their brands in the new TLD.) Trademark owners argue that when compared to the registration fee of $249 charged by Vox during the general availability period and when compared to the few hundred dollars charged by other TLD registrars during their Sunrise Period, it is obvious that this scheme is nothing more than “predatory, exploitative and coercive.”

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Live Streaming Apps Raise New/Old Copyright Concerns

Posted in Copyright Law, Entertainment Law

By: Scott Hervey

Periscope (owned by Twitter) and Meerkat are two new “live streaming” appsScott-Hervey-10-web which allow users to live stream videos from their phones.  These applications could potentially change the way live sporting or music events are broadcast or change the way news footage is gathered.  They can also be used by a viewer to re-broadcast copyrighted content.  HBO was recently on the receiving end of that lesson when it found out that dozens of viewers were live streaming the season premiere of Game of Thrones.

HBO said that Periscope was responsive to its take down notices, but also added “We feel developers should have tools which proactively prevent mass copyright infringement from occurring on their apps and not be solely reliant upon notification.”   This sounds very similar to the argument Viacom initially made in its protracted copyright infringement litigation against YouTube.  However, in 2010 U.S. District Court Judge Louis Stanton rejected this argument when he found that the Digital Millennium Copyright Act (the “DMCA”) insulated YouTube/Google from Viacom’s infringement claims and granted YouTube’s motion for summary judgment.

Under the DMCA, a “Service Provider” may be entitled to immunity from claims of copyright infringement in four areas: 1) transitory communications; 2) system caching; 3) storage of information on systems or networks at direction of users; and 4) information location tools. While each area would appear to have some application to Periscope and Meerkat’s business, the information storage category is of primary focus.

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Brewing Up Some IP

Posted in Copyright Law, Patent Law, Trademark Law

With so many new microbreweries popping up in Sacramento, the Bay Area,transparent and the Greater San Diego area, I felt compelled to write the present piece for the benefit of the aspiring, as well as the established, microbrew entrepreneur. These individuals undoubtedly pour (excuse the pun) their hearts, souls, and hard-earned money into the development of their breweries and their attempts to formulate the perfect brew. However, from my own research and analysis it seems clear that these entrepreneurs are regularly overlooking one thing in particular—their intellectual property rights.

The thought first occurred to me when I was sitting in San Diego having an IPA with a couple of my friends. As I stared at the bottle on the table it occurred to me that despite my everyday involvement with intellectual property, I had never looked into whether some of these companies were properly safeguarding their intellectual property rights. I immediately went to the United States Patent and Trademark Office (“USPTO”) website on my cellphone and began searching for some of my favorite breweries and their assorted brews on the database. I quickly learned that some of the companies were prudently protecting their intellectual property in their company’s name, certain brews, and certain designs/graphics. However, I also learned that some of my favorite breweries were not doing anything to protect their intellectual property. I discussed the matter with my friends and express how I could not understand why these companies would not try to protect their intellectual property. Then, it occurred to me that some of them probably never thought about it, or were simply unaware what types of protection exist under the intellectual property laws. After all, prior to my involvement in the intellectual property world, I never thought about trademarks, trade dress, copyrights, or patents. Accordingly, I decide to draft this brief, non-exhaustive discussion of trademark law’s application to the microbrewery industry and suggest that breweries consider protecting their rights as they grow as businesses.

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Enablement is Key – Especially in Biotech Patents

Posted in Patent Law

Enablement is the requirement that a patent teach a person Audrey-Millemann-03_webskilled in the art (the field of the invention) how to make and use the invention without undue experimentation. In other words, a patent must describe the invention clearly enough so that a skilled person in the field can replicate the invention without having to perform experiments to determine how to make and use the invention. The enablement requirement is set forth in 35 U.S.C. §112, first paragraph. If a patent is not enabled, it can be invalidated.

In the fields of biology and chemistry, referred to in the patent world as the “unpredictable” arts, enablement is particularly important. Thus, biotechnology patents must clearly satisfy the enablement requirement or they are at risk of being challenged and held invalid. That is what happened in Promega Corp. v. Life Technologies Corp. (Fed. Cir. 2014) 773 F.3d 1338.

Promega sued Life Technologies for infringement of five patents. The patents covered methods and test kits for analyzing DNA samples and were used in forensic science. Promega alleged that Life Technologies manufactured and sold genetic test kits that infringed Promega’s patents.

Life Technologies moved for summary judgement of invalidity on four of the five Promega patents, arguing that the four patents were not enabled. The district court denied the motion. The court granted Promega’s motion for summary judgment, holding that the patents were infringed. The jury then awarded $52 million in damages to Promega, but the district court granted Life Technologies’ motion for judgment as a matter of law. The court then vacated its previous ruling of infringement.

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Move Over Vanna White, Here Comes Marion Barry’s Kidney

Posted in Privacy

In 2008, former Mayor of Washington, D.C., and then council member Marion BarryScott-Plamondon-03_web became ill with a kidney disease. To survive the illness, Mr. Barry required a kidney transplant, and one of his friends, Ms. Kim Dickens, came to his aid and donated one of her kidneys. Although the transplant helped Mr. Barry survive for several more years, he passed away in November 2014. Ironically, Mr. Barry’s widow is now suing Ms. Dickens.

In a lawsuit filed by Cora Masters Barry against Kim Dickens, Mrs. Barry alleges that Ms. Dickens has unlawfully used her late husband’s celebrity identity in order to promote the “Barry Dickens Kidney Foundation,” a charity formed by Ms. Dickens. According to the website of the Barry Dickens Kidney Foundation, Marion Barry played a role in the formation of that group, and the website even features photographs of Mr. Barry along with a detailed story of how Ms. Dickens came to donate one of her kidneys to Mr. Barry.

Mrs. Barry’s claims against the Foundation are not without legal precedent. In 1993, Wheel of Fortune hostess Vanna White sued Samsung Electronics of America in connection with a television ad which depicted a robotic version of Ms. White to promote sales of Samsung’s video cassette recorder. Ruling in favor of Ms. White, the Court of Appeal determined that television and other media create “marketable celebrity identity value,” and a celebrity has an exclusive right to exploit this value by prohibiting unauthorized commercial exploitation of their identity.

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