In case you have been on vacation for the past two weeks, here is a quick update of some major developments in the intellectual property arena. Depending on your position, they may represent the “good,” the “bad” or the “ugly.” Alice Corporation Supreme Court Decision Yesterday, in the Alice Corporation case, the Supreme Court provided further comment on patent-eligible subject matter under 35 U.S.C. § 101 in the computer software context. The patent claims-at-issue were directed to “a computerized scheme for mitigating ‘settlement risk.’” The Court held, in part, that “the claims at issue [were] drawn to the abstract idea of intermediated settlement, and that merely requiring generic computer implementation fails to transform that abstract idea into a patent-eligible invention.” The takeaway is that merely reciting a computer system configured to implement an abstract concept will not be patent-eligible subject matter. Rader Resigns As previously reported, Federal Circuit Judge Randall Rader stepped down as chief judge last month in the midst of criticism over his controversial e-mail. Last week, Judge Radar announced that he will be retiring from the bench at the end of the month. He intends to teach. Washington Redskins Trademarks Cancelled On June 18, 2014, the Trademark Trail and Appeal Board (“TTAB”) in the Amanda Blackhorse matter cancelled Pro-Football, Inc.’s trademark registrations consisting in whole or in part for the term REDSKINS for professional football-related services. The marks were cancelled because they were found to be disparaging to Native Americans and as such, were obtained in violation of 15 U.S.C. §1052(a), which prohibits “registration of marks that may disparage persons or bring them into contempt or disrepute.” The TTAB was quick to point out that its decision solely related to the right to register these marks and does not deal with the right to use such marks. This is an important distinction as this case will surely be appealed and does not extinguish any common law enforcement rights that may exist. Thus, if you are thinking about starting your own REDSKINS clothing line, you might want to rethink that decision.
After five years of continuous, post-registration use, a trademark registration can become “incontestable” under 15 U.S.C. § 1065. An “incontestable” trademark registration is immune from challenge on certain grounds, such as that the mark is merely “descriptive” and lacks secondary meaning. Although the validity of the registration may not be challenged on a “descriptiveness” basis, the mark’s strength (which affects the scope of protection) can be attacked when considering the “likelihood of confusion” prong of a trademark infringement analysis. Earlier this week, the Tenth Circuit examined this very issue when it unanimously affirmed a lower court’s summary judgment of non-infringement. In Water Pick, Inc. v. Med-Systems, Inc., the Court analyzed the use of similar marks used by competitors in the nasal irrigation market. The senior user, Med-Systems, owned several incontestable federal registrations for SINUCLEANSE. After negotiations broke down to buy Med-Systems, Water Pik developed its own nasal-irrigation line under the name SINUSENSE. The Tenth Circuit provided a nice analysis of the problems associated with Med-Systems’ expert’s survey. However, the more interesting issue (which should serve as a reminder to all litigators) was how the Court analyzed the conceptual strength of the senior SINUCLEANSE mark as part of its evaluation of a “likelihood of confusion.” A particularly strong mark can give rise to a “likelihood of confusion” while a weak or “descriptive” mark suggests that use of a similar, junior mark even on similar goods is unlikely to cause confusion. Determining whether a mark is descriptive and hence, weak, can be difficult. The Tenth Circuit set forth it’s test as “’[d]escriptive terms are those which directly convey to the buyer the ingredients, qualities, or characteristics of the product.’” In the end, the Tenth Circuit found the mark to be “descriptive” of the product’s characteristics or qualities as “Sinu” is a widely used prefix by third parties, including several sinus-irrigation products, and “cleanse” communicates the “nature and purpose of Med-Systems’ products….” The lesson to be learned is that even if a trademark registration is “incontestable,” in certain Circuits (like the Tenth), it may be possible to defend against a charge of infringement by arguing that the senior mark is “descriptive” as part of the “likelihood of confusion” analysis. Often, this is an overlooked, possible defense.
It is a commonly overlooked problem. A person comes up with a new product to bring to market and has the foresight to file an “intent-to-use” U.S. trademark application for the mark XYZ to be used with his new product. Then, before actual use is established, in an effort to get organized, the person sets up a company and assigns all rights, title and interest to the pending trademark application for the mark XYZ to his company. The trademark XYZ eventually becomes registered with the U.S. Patent and Trademark Office (“USPTO”) and is integrated into a portfolio of marks that the company subsequently develops. Now, the company is offering to sell the trademarks to you. Here is something to watch out for when evaluating the portfolio. Generally speaking, it is problematic to assign an “intent-to-use” trademark application except to the successor of the business that owns the trademark application. See 15 U.S.C. § 1060 and TMEP § 501.01(a). The USPTO does not want people trafficking in trademarks that have not been used in commerce. In the above example, the individual prematurely assigned his “intent-to-use” XYZ trademark application to his company and as a result, rendered his trademark registration void and subject to cancellation. What could the individual have done in the above example? He could have filed the application in his company’s name or waited until he had established use before he assigned the application. Pay close attention to trademarks that originate from individuals versus companies and make sure that the proper steps were followed or face the possible consequence of buying an unenforceable trademark registration.
Clients often inquire about whether they need to purchase every variation (e.g., misspellings) of their domain names used for their websites in order to prevent others from infringing their trademarks. The short answer is no. Indeed, there is no requirement to purchase any domain names at all. Generally speaking, in the U.S., trademark rights are acquired through use. As long as you have superior trademark rights, you can approach owners of confusingly similar domain names about trademark infringement. However, this is not the most cost effective approach. It will surely cost a company much more to hire outside counsel to pursue any infringers than paying the annual fees for the most obvious variations of the domain name used for its primary website. Read a discussion on the issue. While it may not be feasible for a company to register a multitude of variations for all of the domain names that it owns, it should consider adopting this approach with regard to the primary domain names (e.g., the domain name used for its primary website) used in connection with its business. An ounce of prevention in this regard goes a long way toward minimizing future business distractions and keeping a company’s legal bills down.