Author: Scott R. Bialecki

Scott Bialecki, a former FTC attorney and IP litigator, is the co-Chair of Sheridan Ross P.C.'s Litigation Group.

The Party’s Over: Fee Hike At USPTO

Scott R. Bialecki
Each time that I traveled to Asia on business over the last seven years, I was asked as to when the world might expect U.S. patent reform. Well, it’s finally here.  You cannot look at a paper or a blog without some reference to the America Invents Act being signed into law last Friday. One of the more immediate implications of this law was to give the USPTO fee-setting authority.  As such, there will be a 15 percent surcharge on certain patent fees, effective Monday, September 26, 2011.  There is also a newly established “micro-entity” rate that should be reviewed.  All in all, we haven’t seen a rate hike in about three years from the USPTO so it’s better than most industries.

Has The Fat Lady Sung? Is Patent Reform Imminent?

Scott R. Bialecki
For years, the U.S. has talked about substantially overhauling U.S. patent law so that it conforms with how most of the rest of the world approaches patent rights. Now, it might become a reality. Yesterday, the Senate overwhelmingly passed patent reform legislation, which if signed, will have the greatest effect on patent law in the last fifty years.  See Patently-O’s recent post for a good overview of the legislation. It has been reported that the President is likely to sign the Smith-Leahy America Invents Act into law in the next few days.  The most significant change will be to move from a first-to-invent country toward a first-to-file country.  This change will greatly affect U.S. practitioners’ patent procurement and litigation strategies.  See http://www.patentlyo.com/patentreformbillaspassed.pdf for the language of the Act.

Learn From How The FTC Approaches Your Competitors’ Advertising!

Scott R. Bialecki
Earlier this week, the FTC approved a final Order settling charges against Beiersdorf, Inc. relating to marketing claims for its Nivea My Silhouette! skin cream product. The Decision and Order can be found on the FTC’s website along with a copy of the Complaint. What can be learned from this case?  First, don’t believe that just because your competitors’ products have not been questioned by the FTC, your products are immune from review.  Second, there can be serious financial repercussions for making questionable claims.  According to Section V of the Order, Beiersdorf is required to pay $900,000 to the FTC to settle this matter.  Third, in addition to being concerned about whether your more traditional types of marketing are compliant, you need to be careful about the types of keywords that you are purchasing to promote your products.  As noted in the Beiersdorf matter, the FTC complained about the purchase of terms, such as “stomach fat” and “thin waist.” Finally, while the matter may be over, Beiersdorf is now under Order with the FTC (the violation of which will trigger significant financial penalties) and has agreed to be monitored by the FTC for five years with regard to certain future claims.  While such monitoring provisions are not new, companies often forget about how invasive these provisions can be as it allows the FTC, “upon reasonable notice and request” to ask for, among other things, substantiation for the subject claims.  In other words, unlike in civil litigation, the matter is far from being over even though a settlement has been reached. Learn from how the FTC settled matters with others in your field and consider the significant disruptions, both financial and otherwise, that can result if your company makes unsupported or questionable claims.

Don’t Let The New FTC ALJ Rule Changes Bite You!

Scott R. Bialecki
The FTC has announced changes to several sections of its Rules of Practice used in consumer protection and competition matters before an Administrative Law Judge.  According to the FTC, they are designed to help streamline discovery and motion practices.  Details of the changes can be found at http://www.ftc.gov/os/fedreg/2011/08/110812part3frn.pdf, which reportedly address such issues as how to label "confidential" documents and the admissibility of expert reports.  The FTC's Press Release can be found at http://www.ftc.gov/opa/2011/08/part3.shtm. 

FTC Tip Of The Day: Don’t Bury Damaging Documents

Scott R. Bialecki
Receiving an inquiry from a government agency, like the FTC, is different than being involved in civil litigation. Your client is dealing with the government, which does not have the same motivation or pressure points to settle as a private litigant. Having worked at the FTC, it’s my impression that most of the lawyers working there are passionate about making a difference and protecting consumers.  As such, if they get a sense that someone is playing games or being less than forthright, they have the luxury of devoting a substantial amount of time to a single matter and turning over every rock possible. During my tenure, some companies attempted to bury damaging documents in massive document productions with the hope that they would go unnoticed. The problem is that by putting documents in places that you wouldn’t normally expect to find them (e.g., placing a random memo in the middle of financial data), it only highlighted the document’s potential importance.  Once a company loses its credibility, it’s hard to get it back. What can be done about  producing damaging documents?  If they are clearly relevant to the FTC’s inquiry and cannot be withheld based on confidentiality concerns or some applicable privilege, don’t bury them in other documents. Rather, disclose them as the are kept in the ordinary course of business and deal with them as a matter of law.  If your company somehow ran afoul of the applicable regulations, look to prior FTC Orders to see how others in your circumstance were treated. Generally speaking, my experience with the FTC was that it tried to be consistent in its approach to dealing with issues.  In short, deal with the issues and don’t play games.  In the end, it’s been my experience that you’ll achieve better results.

Look Behind The Curtain When Acquiring Registered Trademarks

Scott R. Bialecki
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.

You Can’t Judge A Patent By Its Cover….

Scott R. Bialecki
We’ve all heard the phrase, “You can’t judge a book by its cover.”  Well, this adage is especially true when looking at an issued patent as there may be valuable information that is not reflected on its face. First, printing errors can occur. Late amendments to the claims of the patent (which define the scope of the protected invention) may not make it into the final version of the patent.  Thus, the claims that you are looking at may appear broader than they actually are.  This is especially important to know when evaluating potential non-infringement positions. Second, the applicant may have given up significant ground to get its patent granted, which is not necessarily reflected in the patent.  For example, the applicant may have distinguished its invention over a prior art system.  This could have been done by making claim amendments and arguing their narrow meaning, or by otherwise convincing the U.S. Patent and Trademark Office Examiner that no amendments were necessary because the claims (as written) were sufficiently narrow to get around the prior art.  Why is this relevant you ask?  Because your company may be practicing a technology that is similar to what the applicant distinguished. In the end, while you should start with the patent, you should read the back and forth correspondence with the U.S. Patent and Trademark Office (known as the “patent prosecution history”) as mistakes can happen and the scope of the patent may not always be as it appears on its face.

FTC Investigation Suspended But No “Stamp Of Approval”

Scott R. Bialecki
It’s been reported that the FTC has “dropped” its investigation of a start-up that searches the Internet for employees’ and job applicants’ past bad acts.  While the FTC may have suspended its investigation relating to potential Fair Credit Reporting Act violations, it never gives a “stamp of approval” as is being reported. Read the alleged copy of the FTC’s letter.  In any event, it’s an interesting intersection of social media and regulatory issues.

Tired Of Being Stuck In Traffic? Look To The Patent Prosecution Highway….

Scott R. Bialecki
Are you tired of waiting for the U.S. Patent and Trademark Office (USPTO) to examine your patent application?  You might consider using one of the USPTO’s Patent Prosecution Highway (PPH) programs. In theory, the goal is to use the examination by one country to expedite the examination and allowance of the same claims in another participant country. The USPTO started a pilot PPH program last year with the Korean Intellectual Property Office and reportedly announced yesterday that it intends to introduce two new pilot PPH programs with the Nordic Patent Institute and Israel Patent Office. It’s important to remember that there can still be speed bumps even if you decide to go down these roads. There is no guarantee that an examiner won’t conduct a further search and uncover new prior art despite the initial examination of the other patent office. Nonetheless, if you are permitted to participate in a PPH program, you should get your application reviewed in a timely manner.