Indianapolis, Indiana – On April 10, 2014, the Robert H. McKinney School of Law will host
“IP Jurisprudence in the New Technological Epoch: The Judiciary’s Role in the Age of Biotechnology and Digital Media.” The program will run from 9 a.m. to 5 p.m. and will provide 6.5 hours of continuing legal education.
Speaker: Robert A. Armitage, Consultant, IP Strategy & Policy
Location: Wynne Courtroom and Atrium, Inlow Hall, 530 W. New York Street, Indianapolis, Indiana
Washington, D.C. – The Supreme Court of the United States agreed to review the judgments
of several Courts of Appeals in four intellectual property disputes. The cases included two patent cases (regarding joint-infringement liability and indefiniteness invalidity), a copyright case (concerning public performances), and a case which may have implications under trademark law (whether a Lanham Act claim is barred by the Food Drug and Cosmetic Act).
Limelight Networks, Inc. v. Akamai Technologies, Inc., Docket No. 12-786, is a patent case involving technology for managing web images and video. Appellate attorneys for Limelight Networks brought the case to the Court after the U.S. Court of Appeals for the Federal Circuit held that, in the case of method patents, multiple parties could be found to jointly infringe on a patent. The Federal Circuit, sitting en banc, held by a 6-5 vote that “all the steps of a claimed method must be performed in order to find induced infringement, but that it is not necessary to prove that all the steps were committed by a single entity.”
The question raised for review by the Supreme Court is whether a defendant may be liable for inducing patent infringement under 35 U.S.C. § 271(b) even if none has committed direct infringement under § 271(a). Patent attorneys for technology companies including Google Inc., Cisco Systems, Inc., Oracle Corporation, Red Hat, Inc., and SAP America, Inc. filed a brief in support of Limelight.
Richmond, Virginia – PBM Products, LLC (“PBM”) sued Mead Johnson & Company, LLC (“Mead Johnson”) alleging false advertising in violation of the Lanham Act, 15 U.S.C. § 1125(a)(1)(A) and (B), and commercial disparagement. Mead Johnson filed counterclaims against
PBM. The district court dismissed the counterclaims and entered an injunction against Mead Johnson. Mead Johnson appealed. The United States Court of Appeals for the Fourth Circuit affirmed.
PBM produces store-brand, “generic,” infant formula. Mead Johnson produces baby formula products under the brand name Enfamil, including a standard formula, a formula with broken-down proteins, and a formula with added rice starch. Both companies use the same supplier for two key nutrients–docosahexaenoic acid (DHA) and arachidonic acid (ARA)–which are important to an infant’s brain and eye development. Mead Johnson calls these nutrients by their brand name “Lipil,” while PBM describes them generically as “lipids.” Both companies use the same level of the lipids. As a result, PBM includes a comparative advertising label on their formula that states, “Compare to Enfamil.”
PBM sued Mead Johnson under the Lanham Act, 15 U.S.C. § 1125(a), alleging that Mead Johnson engaged in false advertising and commercial disparagement when it distributed more than 1.5 million direct-to-consumer mailers that falsely claimed that PBM’s baby formula products were inferior to Mead Johnson’s baby formula products.
Mead Johnson filed counterclaims against PBM alleging breach of contract, defamation, false advertising, and civil contempt. Mead Johnson’s defamation counterclaim was based primarily on a press release issued by PBM CEO Paul Manning declaring that “Mead Johnson Lies About Baby Formula … Again.” Mead Johnson’s false advertising counterclaim alleged that labels on PBM’s products conveyed several implied messages comparing PBM and Mead Johnson’s formulas. Mead Johnson’s breach of contract and civil contempt counterclaims related to prior litigation between the parties.
After a jury found that Mead Johnson had engaged in false advertising, the district court issued an injunction prohibiting Mead Johnson from making similar claims, which enjoined all four advertising claims that Mead Johnson had made, including the express claim that “only Enfamil LIPIL is clinically proven to improve brain and eye development.”
On appeal, Mead Johnson presented three clusters of issues for review by the Fourth Circuit: (1) whether the district court erred in its dismissal of Mead Johnson’s counterclaims; (2) whether the district court abused its discretion in its admission of expert opinion testimony and evidence of prior litigation between the parties; and (3) whether the district court erred or abused its discretion in issuing the injunction.
The dismissals of Mead Johnson’s counterclaims for breach of contract, defamation, false advertising, and civil contempt were all affirmed. The allegedly defamatory statement “Mead Johnson Lies About Baby Formula … Again” was held to be true, as it was found that Mead Johnson had made false statements prior to the publication of PBM’s press release (“Mead Johnson Lies”) and had also made previous false statements about PBM’s baby formula (the “Again” portion of the PBM’s press release). The dismissal of the defamation claim on summary judgment was held to be proper as no false statement had been made.
The Fourth Circuit then upheld the district court’s disposal of Mead Johnson’s Lanham Act counterclaims as a matter of law. Those claims accruing prior to the two-year statute of limitations were affirmed to be time-barred. Claims accruing after that period were affirmed as correctly estopped under the equitable principle of laches.
The Fourth Circuit also held that the district court did not err in granting judgment as a matter of law on Mead Johnson’s Lanham Act counterclaim concerning PBM’s rice starch formula advertisements, holding that the district court had properly concluded that, because the consumer surveys that had been conducted by Mead Johnson had failed to address the allegations in the lawsuit, no relevant evidence had been produced by Mead Johnson on this claim. Moreover, it was held that Mead Johnson had failed to show either falsity of the statements or that any damage was caused by any of the “compare to Enfamil” language that had been used by PBM.
The appellate court then addressed Mead Johnson’s contention that the district court erred by admitting (1) expert survey evidence and (2) evidence of prior Lanham Act litigation between the parties. These decisions were reviewed for abuse of discretion.
Mead Johnson had argued that the survey evidence offered by PBM should be excluded as the consumers involved in the survey did not exactly match the “universe” of consumers appropriate to this litigation. The district court was not convinced. It noted that “while Mead Johnson has pointed out numerous ways in which it would have conducted [the] survey differently, its arguments do not demonstrate that the methods used were not of the type considered reliable by experts . . . .” The district court concluded that the possibility that the survey had targeted the wrong universe went to the weight to be accorded to the survey, not to its admissibility. The appellate court cited a Seventh Circuit case, AHP Subsidiary Holding Co. v. Stuart Hale Co., which noted that “[w]hile there will be occasions when the proffered survey is so flawed as to be completely unhelpful to the trier of fact and therefore inadmissible, such situations will be rare” and affirmed the district court’s conclusion “without difficulty.”
Mead Johnson also had also asserted that the district court had erred in admitting evidence of the 2001 and 2002 Lanham Act lawsuits filed by PBM, contending that the evidence was irrelevant and more prejudicial than probative. The Fourth Circuit found that the history of prior litigation was both relevant and that its probative value was not substantially outweighed by any danger of unfair prejudice. Moreover, in upholding the trial court’s ruling, the appellate court opined that a district court’s decision to admit evidence over an objection based on the potential for unfair prejudice “will not be overturned except under the most extraordinary circumstances, where [the district court’s] discretion has been plainly abused.”
The Fourth Circuit then turned to Mead Johnson’s contention that the injunction issued by the district court had been improper. Mead Johnson argued that the injunction was improper for two reasons. First, it asserted that PBM failed to establish any risk of recurrence of the violation. Second, it argued that the scope of the injunction was too broad, as it prohibited conduct that PBM had not proved at trial and that it was beyond the harm PBM sought to redress.
The appellate court was not persuaded. At trial, the jury had returned a verdict in favor of PBM on its false advertising claim and had awarded PBM $13.5 million in damages. In such a case, where a violation has been established and the party seeking the injunction has made a showing that such an injunction is proper, section 1116(a) of the Lanham Act vests district courts with the “power to grant injunctions, according to the principles of equity and upon such terms as the court may deem reasonable, to … prevent a violation under [§ 1125(a) of the Lanham Act].” The Fourth Circuit held that a showing sufficient to support the district court’s injunction had been made and upheld the lower court’s ruling. The appellate court further indicated that the injunction was proper as, “PBM cannot fairly compete with Mead Johnson unless and until Mead Johnson stops infecting the marketplace with misleading advertising.”
Finally, Mead Johnson argued that, because the general jury verdict did not specify which of the four statements in the mailer the jury found to be false and/or misleading, the district court’s injunction must be limited only to the mailer or other advertisements not colorably different from the mailer. The Fourth Circuit rejected the narrow construction suggested by Mead Johnson. It noted again that, inter alia, Mead Johnson’s claim that it was the “only clinically proven” formula had been found to be misleading by the district court. It concluded that because the district court’s interpretation of the jury verdict was plausible in light of the record viewed in its entirety, the factual findings upon which it based the scope of its injunction could not as a matter of law be clearly erroneous. Consequently, the scope of the injunction also was affirmed.
Practice Tip #1: These parties are familiar combatants on the Lanham Act battlefield. For example, in 2001, Mead Johnson distributed brochures and tear-off notepads to patients in pediatricians’ offices stating that store-brand formula did not have sufficient calcium or folic acid. PBM sued and obtained a restraining order prohibiting Mead Johnson from making similar statements. The parties settled that dispute. Then, in 2002, Mead Johnson distributed a chart to physicians stating that store-brand formula did not contain beneficial nucleotides. PBM sued and, again, the parties settled.
Practice Tip #2: The Lanham Act prohibits the “false or misleading description of fact, or false or misleading representation of fact, which … in commercial advertising or promotion, misrepresents the nature, characteristics, qualities, or geographic origin of his or her or another person’s goods, services, or commercial activities.” 15 U.S.C.A. § 1125(a)(1)(B).
Practice Tip #3: In the Seventh Circuit, as with other federal circuits, “[A] court may find on its own that a statement is literally false, but, absent a literal falsehood, may find that a statement is impliedly misleading only if presented with evidence of actual consumer deception.” Abbott Labs. v. Mead Johnson & Co., 971 F.2d 6, 14 (7th Cir. 1992).
Practice Tip #4: Before an injunction may issue, the party seeking the injunction must demonstrate that (1) it has suffered an irreparable injury; (2) remedies available at law are inadequate; (3) the balance of the hardships favors the party seeking the injunction; and (4) the public interest would not be disserved by the injunction. eBay, Inc. v. MercExchange, 547 U.S. 388, 391 (2006).
WikiLeaks recently released the entire Intellectual property Rights Chapter from the secret negotiated draft text of theTrans-Pacific Partnership (“TPP”) Intellectual Property Rights Chapter. The TPP is the largest-ever
economic treaty, encompassing nations representing more than 40 percent of the world’s gross domestic product (“GDP”). The WikiLeaks release of the text came ahead of the decisive TPP Chief Negotiators summit in Salt Lake City, Utah. The chapter published by WikiLeaks is perhaps the most controversial chapter of the TPP due to its wide-ranging effects on medicines, publishers, internet services, civil liberties and biological patents. Significantly, the released text includes the negotiation positions and disagreements between all 12 prospective member states.
The TPP is the forerunner to the equally secret US-EU pact, the Transatlantic Trade and Investment Partnership (“TTIP”), for which President Obama initiated US-EU negotiations in January 2013. Together, the TPP and TTIP will cover more than 60 percent of global GDP. Both pacts exclude China.
Since the beginning of the TPP negotiations, the process of drafting and negotiating the treaty’s chapters has been shrouded in an unprecedented level of secrecy. Access to drafts of the TPP chapters is shielded from the general public. Members of the U.S. Congress are able to view only selected portions of treaty-related documents in highly restrictive conditions and under strict supervision. It has been previously revealed that only three individuals in each TPP nation have access to the full text of the agreement, while 600 ‘trade advisors’ – often lobbyists for large U.S. corporations – are granted privileged access to crucial sections of the treaty text.
Washington, D.C. – Utah Senator introduces a bill which includes both fee shifting and bonding to stop the drain on the economy caused by patent trolls.
U.S. Senator Orrin Hatch (R-Utah), current member and former Chairman of the Senate 
Judiciary Committee, recently introduced legislation to address the growing threat of so-called “patent trolls.” Patent trolls purchase existing broad patents and then accuse businesses of infringing on those patents, in search of a financial settlement or litigation. Hatch’s legislation, the Patent Litigation Integrity Act (S. 1612), gives judges more opportunity to shift the costs and expenses of litigation, and gives defendants the opportunity to request a bond up front to prove the party seeking to assert a claim on the patent has adequate resources to turn over to the prevailing party if that party is successful in defending its claim.
“Patent trolls are a drain on the innovation in our country and their practices need to end,” Hatch said. “Many small businesses in Utah and throughout the country simply don’t have the resources to fight back against the predators in our patent system, and my bill gives them adequate resources to fight back. Fee shifting without the option to seek a bond is like writing a check on an empty account, and that’s why it’s important to include both in any legislation dealing with patent trolls. It’s my hope the Senate will act soon to put a stop to the patent trolls draining the innovation in our country and weakening our economy.”
Washington, D.C. — The Government Accountability Office (“GAO”) finds the number of patent infringement suits and defendants has risen substantially in recent years. Some potential causes of this increase include vague, overbroad patents, the potential for large monetary awards from the courts and the increased perception of intellectual property as a valuable asset.
Changes in the Intellectual Property Landscape
From 2000 to 2010, the number of patent infringement lawsuits in the federal courts fluctuated slightly, and from 2010 to 2011, the number of such lawsuits increased by about a third. Some stakeholders GAO interviewed said that the increase in 2011 was most likely influenced by the anticipation of changes in the 2011 Leahy-Smith America Invents Act (“AIA”), which made several significant changes to the U.S. patent system, including limiting the number of defendants in a lawsuit, causing some plaintiffs that would have previously filed a single lawsuit with multiple defendants to break the lawsuit into multiple lawsuits. In addition, GAO’s detailed analysis of a representative sample of 500 lawsuits from 2007 to 2011 shows that the number of overall defendants in patent infringement lawsuits increased by about 129 percent over this period. These data also show that companies that make products brought most of the lawsuits and that nonpracticing entities (“NPE”) brought about a fifth of all lawsuits. GAO’s analysis of these data also found that lawsuits involving software-related patents accounted for about 89 percent of the increase in defendants over this period.
Alexandria, Virginia – On Wednesday, October 23, 2013, the U.S. Patent Office (“USPTO”) will hold a one-day seminar on using the Madrid Protocol for filing an international application and maintaining an international registration.
The target audience is practitioners who are already familiar with and have used the Madrid Protocol. The purpose of the seminar is to provide practical information on common issues that arise during the processing of the application, as well as maintaining and managing the resulting international registration. Seminar highlights include: resources of the World Intellectual Property Organization; issues to consider when preparing to file and actually filing an international application; the USPTO review process for certification of the international application; International Bureau review of the international application; and issues related to changing and renewing the international registration. A detailed agenda will be provided at a later date.
The event will be held in the Global Intellectual Property Academy at the USPTO campus in Alexandria, Virginia from 9 a.m. to 5 p.m. (with a lunch break). To attend in person, please send your name to TMFeedback@uspto.gov no later than close of business Friday, October 18, with the subject line “Madrid Protocol advanced training.” The seminar will also be webcast. Webcast instructions and an agenda will be posted on the USPTO website in advance of the event. There is no need to register if you only plan to view the webcast. If possible, the USPTO will attempt to make a version available for viewing at a later time.
Washington, D.C. — The U.S. Patent Office (“USPTO”) and federal courts may be affected by a government shutdown, which will begin tomorrow if Congress does not enact a continuing resolution to fund government operations today.
The federal court system will not be affected immediately. During the first 10 business days of a lapse in appropriations, the judiciary will use available fee and no-year balances to pay judges and court employees, and to maintain court operations. Courts will continue to operate, but court personnel have been instructed to conserve funding as much as possible by delaying or deferring expenses that are not critical to the performance of their constitutional responsibilities.
After the 10-day period, if there is still no appropriation, the judiciary will operate under the terms of the Anti-Deficiency Act, which allows “essential work” to continue during a lapse in appropriations. Among the definitions of “essential work” are powers exercised under the Constitution, which include activities to support the exercise of Article III judicial powers, specifically the resolution of cases.
Washington, D.C. — The U.S. Patent and Trademark Office (“USPTO”) is seeking public comment on amendments to trademark registrations with respect to identification of goods and services which may be necessary due to changes in technology. The USPTO cited changes in the manner or medium by which products or services are offered for sale and provided to customers as a result of evolving technology. Comments are due no later than Nov. 1, 2013, and should be emailed to TMFeedback@uspto.gov, with the subject line “Technology Evolution.”
Under §7(e) of the Trademark Act, a registration based on an application under §1 or §44 of the Trademark Act may be amended for good cause upon application of the owner and payment of the prescribed fee, provided the amendment does not materially alter the character of the mark. 15 U.S.C. §1058(e). With respect to the identification of goods/services, an identification may be amended to restrict the identification or change it in ways that would not require republication of the mark. See 37 C.F.R. §2.173(e). However, no goods/services may be added to a registration by amendment. Moreover, under current USPTO practice, changed circumstances, such as new technology, will not render acceptable an amendment that is not otherwise permissible. TMEP §1609.03.
Recently, the USPTO has received a number of requests for amendment under §7, as well as inquiries from registration owners, seeking to amend identifications of goods/services due to changes in the manner or medium by which products and services are offered for sale and provided to consumers, particularly because of evolving technology. In some cases, these requests have also sought a corresponding change in classification.
Washington, D.C. — The U.S. Department of Commerce recently released a green paper on Copyright Policy, Creativity, and Innovation in the Digital Economy (the “Green Paper“) to advance discussion on a set of policy issues critical to economic growth. The Green Paper discusses the goals of maintaining an appropriate balance between rights and exceptions as the law continues to be updated; ensuring that copyright can be meaningfully enforced on the Internet; and furthering the development of an efficient online marketplace.
The Green Paper is the most thorough and comprehensive analysis of digital copyright policy issued by any administration since 1995. The report is a product of the Department of Commerce’s Internet Policy Task Force (“IPTF”) with input from the U.S. Patent and Trademark Office (“USPTO”) and the National Telecommunications and Information Administration (“NTIA”). Through the IPTF, the USPTO and NTIA will solicit further public comments and convene roundtables and forums on a number of key policy issues.
“Copyright law strikes a number of important balances in delineating what is protectable and what is not, determining what uses are permitted without a license, and establishing appropriate enforcement mechanisms to combat piracy, so that all stakeholders benefit from the protection afforded by copyright,” said U.S. Secretary of Commerce Penny Pritzker. “Ensuring that our copyright policy provides incentives for creativity while promoting innovation on the Internet is a critical and challenging task. The Green Paper released today is an important step toward ensuring that the United States’ creative industries continue to have a substantial impact on strengthening our nation’s economy.”
Copyright has been a vital contributor to U.S. cultural and economic development for more than two hundred years, fostering the production and dissemination of the valuable expression that has put America at the forefront of the global creative marketplace. Maintaining a balanced and effective copyright system should continue to drive the production of creative works while at the same time preserving the innovative power of the Internet and the free flow of information. The Green Paper provides a comprehensive review of current policy related to copyright and the Internet, and identifies important issues that call for attention and development of solutions. The solutions may entail a combination of legal remedies, technology, private sector cooperation, and public outreach and education, along with the continued development of options to legally access copyrighted works.
In the Green Paper, the IPTF proposes the following actions:
· Establishing a multi-stakeholder dialogue on improving the operation of the notice and takedown system under the Digital Millennium Copyright Act (“DMCA”).
· Soliciting public comment and convening roundtables on:
o The legal framework for the creation of remixes;
o The relevance and scope of the first-sale doctrine in the digital environment;
o The application of statutory damages in the context of individual file-sharers and secondary liability for large-scale online infringement;
o The appropriate role for the government, if any, to help improve the online licensing environment, including access to comprehensive public and private databases of rights information.
“Copyright protection is a foundation for creative services and products that drive a significant part of the U.S. economy,” said Acting Under Secretary for Intellectual Property and Acting USPTO Director Teresa Stanek Rea. “The Internet must continue to support a legitimate market for copyrighted works as well as provide a platform for innovation and the introduction of new and dynamic services that drive digital commerce.”
“We see a digital future in which the relationship among digital technology, the Internet, and creative industries becomes increasingly symbiotic,” said Assistant Secretary of Commerce for Communications and Information and NTIA Administrator Lawrence E. Strickling. “In this digital future, the rights of creators and copyright owners are appropriately protected; creative industries continue to make their substantial contributions to the nation’s economic competitiveness; online service providers continue to expand the variety and quality of their offerings; technological innovation continues to thrive; and consumers have access to the broadest possible range of creative content.”
The Green Paper reiterates the Administration’s support for legislation creating a public performance right for the broadcasting of sound recordings and enabling prosecutors to seek felony penalties for unauthorized streaming to the public. It supports congressional or regulatory attention to determine how best to rationalize rate-setting standards for different types of music services; reform music licensing, particularly the mechanical license for musical compositions; and ensure consumers can unlock their cell phones, subject to applicable service agreements. It supports the U.S. Copyright Office’s work to address the problems of orphan works and mass digitization, consider possible small-claims procedures, update the statutory exception for libraries, and improve public registration and recordation systems. The Green Paper also supports and encourages enhancing public education and outreach efforts.
With respect to the difficulties in enforcement against websites dedicated to infringement, the Green Paper encourages ongoing voluntary initiatives, such as those facilitated by the U.S. Intellectual Property Enforcement Coordinator (“IPEC”), that benefit all parties and are consistent with the principles of privacy, free speech, competition, and due process, and states that the IPTF will follow these developments and assess their impact in order to determine whether additional action is needed. The USPTO has also extended its request for comments regarding the processes, data metrics, and methodologies that could be used to assess the effectiveness of cooperative agreements and other voluntary initiatives to reduce intellectual property infringement. This comment solicitation is part of the Administration’s 2013 Joint Strategic Plan for Intellectual Property Enforcement.
Then-Secretary of Commerce Gary Locke launched the IPTF in April 2010, bringing together the USPTO and NTIA, as well as the International Trade Administration (“ITA”), the National Institute of Standards and Technology (“NIST”), and the Economic and Statistic Administration (“ESA”) to conduct a comprehensive review of privacy policy, copyright, global free flow of information, cybersecurity, and their respective relationships to innovation in the Internet economy. In preparing the Green Paper, USPTO and NTIA held more than a dozen listening sessions with interested stakeholders, convened a symposium, received hundreds of public comments, and reviewed comments submitted to other agencies on relevant topics. The IPTF will consider feedback it receives from public comments, roundtables and forums to determine how the current copyright framework can be improved to serve creators, right holders, service providers, consumers, innovation, and national economic goals.
The Green Paper can be found online at: http://www.uspto.gov/news/publications/copyrightgreenpaper.pdf.
Practice Tip: Among the issues to be considered as part of this initiative, public comment will be solicited regarding the application of statutory damages in the context of individual file-sharers. This subject has created a considerable range of response from the judiciary. On one end of the spectrum are opinions, for example, one citing a “disturbing trend of internet piracy“ and another which assessed statutory damages of $150,000 in an illegal-downloading case in which the defendant did not appear to answer the allegations of infringement.
On the other end of the spectrum are opinions such as Judge Otis Wright’s scathing indictment of copyright trolls. In Judge Wright’s opinion, he details the abuse of the legal process committed under the authority of The Copyright Act. In the now-famous “Star Trek”-themed order, Judge Wright began by opining, “Plaintiffs have outmaneuvered the legal system. They’ve discovered the nexus of antiquated copyright laws, paralyzing social stigma, and unaffordable defense costs. And they exploit this anomaly by accusing individuals of illegally downloading a single pornographic video. Then they offer to settle–for a sum calculated to be just below the cost of a bare-bones defense. For these individuals, resistance is futile; most reluctantly pay rather than have their names associated with illegally downloading porn. So now, copyright laws originally designed to compensate starving artists allow, starving attorneys in this electronic-media era to plunder the citizenry.”
Among other measures in this case, the Court awards attorney’s fees and costs in the sum of $40,659.86 to the defendant. It then, as a punitive measure, doubled the award, yielding $81,319.72.
Judge Wright later concluded with an explanation for the sanctions which he was imposing against the attorneys in the case, “though Plaintiffs boldly probe the outskirts of law, the only enterprise they resemble is RICO. The federal agency eleven decks up is familiar with their prime directive and will gladly refit them for their next voyage. The Court will refer this matter to the United States Attorney for the Central District of California. The will also refer this matter to the Criminal Investigation Division of the Internal Revenue Service and will notify all judges before whom these attorneys have pending cases. For the sake of completeness, the Court requests [defense counsel] to assist by filing a report, within 14 days, containing contact information for: (1) every bar (state and federal) where these attorneys are admitted to practice; and (2) every judge before whom these attorneys have pending cases.”
Indiana Intellectual Property Law News