The long-awaited decision by the United States Supreme Court on business method patents was issued on June 19, 2014.  Unfortunately, the decision raised more questions than it answered.  The expectation was that the Supreme Court would clearly explain the difference between unpatentable abstract ideas and patentable software, including business methods.  Instead, the Court issued a very narrow decision with broad, but uncertain ramifications.  The Court applied a test it has previously relied upon, striking down all of the patents in the case and expressly stating that it was not opining on the patentability of software or business methods in general.

The case is Alice Corporation Pty. Ltd. v. CLS Bank International, 2014 U.S. Lexis 4303 (U.S. Supreme Court, June 19, 2014). Alice Corporation’s patents were directed to a computer-implemented process of minimizing “settlement risk” – the risk to a party in a financial transaction that the other party would not perform the transaction, by creating an intermediary using “shadow” financial records of both parties.  The claims covered the computer system to perform the process, the computerized method itself, and a computer-readable medium with the instructions to perform the method.

Alice Corporation had sued CLS Bank for patent infringement.  The district court had granted summary judgment for CLS Bank on the grounds that all of the claims were not eligible for patent protection as they were directed to an abstract idea.  A panel of the Federal Circuit Court of Appeals had reversed the district court, but then, in an en banc hearing, affirmed the district court in a set of multiple opinions.  A plurality of the Federal Circuit found all of Alice Corporation’s claims patent-ineligible, relying on the Supreme Court’s 2012 decision in Mayo Collaborative Services v. Prometheus Laboratories, Inc., 132 S.Ct. 1289 (2012).

Continue Reading Business Method Patents: Murkier Water

transparentWith the prevalence of smartphones in today’s society, one cannot help but to have at least heard of Google’s Android operating system.  This operating system came about with the intent of competing with the superpower known as Apple’s iPhone.  Of course, when Google released this platform for the first time in 2007, the Android operating system was perceived to be the first generation.  Recently, however, an Illinois man asserted that perhaps Google’s Android was not the first generation.  Well, not quite, but he did assert that Google infringed his federally registered trademark, “Android Data.”

During the Dot.com Boom of the late 1990s Erich Specht decided he wanted to get into the lucrative software business.  As such, in 1998, he founded a suite of e-commerce software that became known as Android Data Corporation (“ADC”).  Through his entity, he intended to license software to his would-be clients, and provided website hosting and computer consulting services.   Two years after the company’s inception, Mr. Specht applied to the United States Patent and Trademark Office for federal registration of the “Android Data” mark.  The mark was registered in 2002.

Unfortunately for Mr. Specht, by the end of 2002, his company had hit the end of the road.  It ceased all major operations, lost the bulk of its clients, and moved its headquarters into Mr. Specht’s home.  Mr. Specht then caused ADC to transfer the Android Data mark to his wholly-owned company, The Android’s Dungeon Incorporated (“ADI”).  For the remainder of the year, Mr. Specht attempted to sell ADC’s assets, including the mark, but was unable to find a willing buyer.  He kept the ADC website running for a short period thereafter, but eventually allowed the registration for the company URL to lapse. Continue Reading Google’s Android: Was It Truly The First Generation?

The 2013 NFL season was not kind to the Washington Redskins, and after winning only 3 games and losing 13, there are many in the Washington Redskins organization who might have wanted to hide behind a new name.  Now they might have to.

The USPTO officially cancelled the Washington Redskins trademark registration stating that the team’s name is offensive to Native Americans.  Although it is unusual for the trademark office to take such action, this move is consistent with the Trademark Manual of Examining Procedure, Section 1203.01, as well as Section 2(a) of the Lanham Act, which provide that trademarks which disparage or belittle any group are not permitted to be registered under federal law.

Although the cancellation of a federal trademark registration does not mean that the Washington Redskins must stop using their name, cancellation of their trademark might significantly reduce the overall value of the team.  A significant source of revenue for most professional sports teams comes from the sale of a variety of licensed products bearing the team name and logo.  Ownership of a valid and enforceable trademark registration in connection with this name and logo helps a sports team to control this intellectual property, license it, and otherwise exclude other parties from profiting through unlicensed use of the marks.  Cancellation of the federal registration will remove a significant number of enforcement tools available to the Washington Redskins, rendering it potentially more difficult to exclude others from using their marks.

Periodically the Trademark Office receives applications for registration, or complaints about an already registered mark, which contain “immoral, deceptive or scandalous matter” or is disparaging to “people, institutions, beliefs, or national symbols.”  Although it is a somewhat rarely cited basis for the rejection or cancellation of a trademark, the Washington Redskins join a dubious list of marks that have run afoul of this provision.  For example, in 2012, the Court of Appeal for the Federal Circuit affirmed the Trademark Office’s rejection of a trademark application covering the rather graphic name of a rooster shaped lollipop product, on the grounds that the name affixed to this particular product was “immoral or scandalous.”

Yet in a different case, the Old Glory Condom Corporation was granted a federal trademark registration in connection with American flag-adorned condom packages.  The apparent discrepancy between this outcome and the Redskins or lollipops highlights the seemingly impossible task faced by the Trademark Office – to discern what type of mark might be “immoral or scandalous” or otherwise offensive to members of the public, while considering the fact that what is vulgar to one person often is not in the eyes of another.

In light of the significant number of protestations received from Native American communities across the country, and a growing public concern about the use of a racial slur such as “Redskins” for the name of a professional sports team, the Trademark Office’s decision in this case likely was easier than debating about lollipops or condoms.  Now that they have tackled the Redskins, perhaps the Trademark Office will knock Chief Wahoo of the Cleveland Indians out of the park.

In one corner, Paula Petrella, the daughter of Frank Petrella, co-author of the 1963 Raging Bull screenplays and book.  In the other corner, MGM, the owner of the copyright in the critically acclaimed motion picture Raging Bull, based on the life of boxing champion Jake LaMotta.   At issue, a 2009 copyright infringement suit against MGM in which Petrella alleged that MGM violated and continued to violate her copyright in the 1963 screenplay by using, producing, and distributing the Raging Bull motion picture.  MGM, landed two very solid blows in both the District Court of the Central District of California and at the 9th Circuit;  MGM was able to have Petrella’s case dismissed on the equitable doctrine of laches.  However, the Supreme Court decided that Petrella could go another round.

After retiring from boxing, Jake LaMotta worked with Frank Petrella to tell his life story.  Their efforts resulted in two screenplays, one registered in 1963, the other in 1973, and a book, registered in 1970.  In 1976, Frank Petrella and LaMotta assigned their rights in the three works, including renewal rights, to Chartoff-Winkler Productions, Inc. Two years later, an MGM subsidiary, United Artists, acquired the motion picture rights to the book and both screenplays.  In 1980, MGM released the film Raging Bull.

 

A year after the release of the film, Frank Petrella died.  Works registered under the pre-1978 regime (such as the 1963 screenplay) enjoyed an initial 28-year period of protection followed by a renewal period of up to 67 years.  Congress provided that the author’s heirs inherit the renewal rights.  Since Frank’s death occurred during the initial terms of the copyrights in the screenplays and book, his renewal rights reverted to his daughter, who could renew the copyrights unburdened by Frank’s assignment of the renewal right to Chartoff-Winkler.  Paula Petrella renewed the copyright in the 1963 screenplay in 1991.  (The copyrights in the other screenplay and book were not timely renewed.)  In 1998, Petrella’s attorney informed MGM that Petrella was the owner of the copyright in the 1963 screenplay and that MGM’s exploitation of any derivative work, including the Raging Bull motion picture,  infringed her copyright.  For two years, Petrella and MGM took jabs at each other by exchanging letters in which MGM denied the validity of the infringement claims and Petrella repeatedly threatened to take legal action. Continue Reading Supreme Court Says Raging Bull Copyright Case To Go Another Round

Let me start with a disclaimer.  This column is not really about intellectual property.  It’s about the unexpected – what happens when people stick to their principles and challenge the way it’s always been done.  Actually, this column is about a horse.  (But I’ll say something about intellectual property along the way.)

I have a second disclaimer.  I do not like horseracing.  It is physically stressful on the horses (who are mostly two and three–year olds) and they frequently get injured.  It is also a sport that often treats horses as disposable commodities; many racehorses are sent to slaughter after failed careers, although that is changing.  But this is a story with so much goodness, it has to be told.

First, the horse.  He is California Chrome.  He’s a three-year-old thoroughbred racehorse.  He now has a large fan club of “chromies” on social media everywhere.  The press calls him the Cinderella horse and the Sacramento Bee’s cartoonist Tom Meyer even portrayed him as a commencement speaker in Tuesday’s paper.  The press didn’t call him anything until he won the Kentucky Derby, the first leg of the Triple Crown, on May 3.  He was definitely under the radar, born and raised in California and starting his racing career here, in a sport dominated by Kentucky-bred horses.  Then there were those who said he couldn’t win the Preakness Stakes, the second leg of the Triple Crown.  On May 17, he won that one too, against a field of mostly fresh horses (horses who had not raced in the Kentucky Derby two weeks earlier and had had longer times to recuperate).

California Chrome is a chestnut colt with a white blaze and four white stockings.  Chestnut is a color like a shiny new copper penny.  The white markings are called “chrome” in horseracing.  His name was picked by a waitress out of several choices provided by the owners.

California Chrome was born in 2011 in Coalinga, California.  California Chrome’s sire (father) was Lucky Pulpit, who won some races in California.  His dam (mother) was Love The Chase, who won one of the six races she ran.  California Chrome was her first foal.

Trainers of other horses have observed that California Chrome has an easy-going personality, doesn’t get overly anxious going into the starting gate, and knows how to control his speed.  I could go on and on about this horse (or any horse for that matter), but I’ll move on. Continue Reading Best of Luck to California Chrome!