Intellectual Property Law

June 10, 2013

Patent Trolls – A Growing Problem Receives National Attention

Litigation by patent-assertion entities (“PAEs,” commonly known as “patent trolls”) has skyrocketed in the last two years. A chart released by the White House in a June 2013 report entitled “Patent Assertion and U.S. Innovation” demonstrates that such trolls now file over 60% of all patent-infringement lawsuits. (The red portion of the bars shows patent lawsuits brought by PAEs.)

The patent-trolling business model includes no productive operations. Instead, investors’ money is used to purchase patents for the sole purpose of alleging infringement and extracting payment under the threat of litigation. Because litigation can be very costly, the patent trolls’ targets face a difficult decision: settle (typically by buying a license from the troll) or pay significant litigation expenses — and face the potential of losing at trial, which is somewhat unlikely but where damages can be enormous. In contrast, the trolls often use contingency-fee attorneys and, thus, have little more at stake in any given lawsuit than a few hundred dollars for a court-filing fee.

Many view this type of litigation with suspicion, if not outright derision. At least four patent-reform bills are pending in Congress and the Obama Administration recently released a harsh indictment detailing the damage to innovation and the economy caused by the “abusive practices in litigation” committed by patent trolls. Various measures to curb frivolous patent litigation have been suggested, including increasing transparency of patent ownership and establishing a website through the U.S. Patent and Trademark Office to inform patent-troll victims of their rights.

May 20, 2013

U.S. Supreme Court Rules Against Indiana Farmer in “Roundup Ready” Soybean Patent Decision

By Overhauser Law Offices, LLC

Washington D.C. — The U.S. Supreme Court has ruled that “patent exhaustion” does not bar an infringement claim against Indiana farmer Vernon Bowman for reproducing patented seeds by planting and harvesting second generation seeds without the patent holder’s permission. Bowman v. Monsanto Co., U.S., No 11-796, 5/13/2013. Monsanto produces and sells patented soybean seed that is genetically altered to resist its “RoundUp” herbicide. Bowman is a farmer who purchased soybean for planting from a grain elevator, expecting that most of the grain elevator soybean would be Monsanto’s herbicide-resistant soybean. In the subsequent patent infringement brought by Monsanto, Bowman argued that Monsanto’s sale of its seed that he ultimately purchased from the grain elevator exhausted any patent rights in the seed. The argument was rejected by both the District Court and the Federal Circuit, and the Supreme Court agreed to review the case.

Patent Exhaustion Only for Sold Article

Under the patent exhaustion doctrine, an authorized sale of a patented product cuts off the patent owner’s right to control of that product, because the sale of that product fulfills the patent law by providing a reward to the patentee. However, this limitation on patent rights applies only to the particular article sold. If the purchaser could make and sell endless copies, the patent would effectively protect just a single sale.

In this case, the patent exhaustion doctrine provides Bowman with the right to use the purchased product in several different ways without Monsanto’s permission, including resale, human consumption or animal consumption of the product. However, it does not permit Bowman to make additional patented soybeans without Monsanto’s permission.

Bowman contended that his use of the purchased seed was covered by the patent exhaustion doctrine because that is the normal way farmers use seed, and that Monsanto seeks an impermissible exception to the exhaustion doctrine for patented seeds and other self-replicating technologies.

The Court rejected the argument, pointing out that it is Bowman who seeks an unprecedented exception to the well-settled rule that the exhaustion doctrine does not extend to the right to make a new product.

December 31, 2012

Northern District of Indiana Amends Local Rules Effective January 1, 2013

By Overhauser Law Offices, LLC

Local Rules for the Northern District of Indiana have been revised and are effective January 1, 2013. The rules which have been amended are L.R. 1-1, L.R. 5-3, L.R. 6-1, L.R. 16-1, L.R. 83-6.7, L.Cr.R. 47-2, L.Cr.R. 47-3 and Local Patent Rules LPR 1-1 through 6-1.

A complete copy of the newly adopted Local Rules can be viewed by following the link provided below.

December 10, 2012

Indiana Court Denies Motions to Sever and Quash in Bittorrent Porn Copyright Infringement Suit

By Overhauser Law Offices, LLC

Fort Wayne, IN – Copyright attorney Paul Nicoletti filed a lawsuit on behalf of Malibu Media in the Northern District of Indiana alleging copyright infringement of the pornographic movie “Romantic Memories.” It alleges the infringement occurred by downloading it using the Internet file sharing “bittorrent” protocol. The suit was against 14 as-yet-unnamed Indiana Defendants, John Does 1-14. “Romantic Memories” had been coded with a “Unique Hash Number,” and upon investigation, 14 Internet Protocol (“IP”) addresses were identified. Upon receiving permission from the court, Plaintiff served third party subpoenas on two Internet Service Providers (“ISPs”) to discover the names and other contact information of each Defendant.

Defendant John Doe No. 12, acting pro se, filed a Motion to Dismiss or Sever for Misjoinder and to Quash Plaintiff’s Subpoena. The court rejected the Motion to Dismiss on a technicality, noting that under local rules motions must be filed separately, and denied the Motions for Severance and to Quash.

Doe No. 12’s Motion to Quash under Fed. R. Civ. P. 45(a) argued that there was no evidence that any improper use of his IP address would be sufficient to support an assertion that he was responsible for such misuse. The Court acknowledged that Doe No. 12 had standing to object to the subpoena on the grounds that it would implicate his privacy interest. However, it went on to reject his argument as a mere denial of liability and not relevant to a Motion to Quash. Doe No. 12 further asserted that the subpoena should be quashed as a burden on his ISP. The court found that argument unpersuasive as 1) the subpoena would not burden Doe No. 12 personally and 2) Rule 45 only requires a court to quash a subpoena when it subjects a person to an undue burden. Fed. R. Civ. P. 45(c)(3)(A)(iv). Further, the court held that no exception for privilege was applicable, as courts have consistently held that “there is no expectation of privacy in Internet subscriber information because it has already been exposed to a third party, the Internet Service Provider.”

Doe No.12’s Motion to Sever under either Federal Rule of Civil Procedure 20 or 21 argued, that there was no single transaction or series of transactions as is required for permissive joinder. Courts across the country are split regarding whether joining anonymous defendants alleged to have participated in a single BitTorrent “swarm” in a single suit is appropriate. The court here allowed joinder as the Plaintiff alleged a set of facts sufficient to support a finding that the separate actions were part of the same series of transactions, noting that the file sharing protocol required each participant to send and receive portions of the work in order to download and view the entire work. The second requirement for joinder under Rule 20, a “common question of law or fact,” was sufficiently pled by the Plaintiff’s assertion, without exception, of the same counts of copyright infringement against all Defendants. Discretionary severance under Rule 21 was also denied as unnecessarily cumbersome at this stage of the litigation.

Finally, the court issued a warning to plaintiffs in situations such as these, stating that “the litigation strategy Plaintiff has employed in this case has a history of becoming abusive and potentially giving rise to sanctions under Rule 11.” The court further cautioned plaintiffs against improperly leveraging a defendant’s reluctance to have his identity revealed to coerce a settlement.

October 19, 2012

Patent Office Proposes New Rules for Patent Attorneys

By Overhauser Law Offices, LLC

Washington, DC. The US Patent Office has released a proposed new set of rules of professional responsibility, completely redrafted from the present professional responsibility rules. The proposed rules would cover patent lawyers in Indiana and elsewhere, and are based on the American Bar Association’s 1983 Model Rules. The Office also proposes to revise the existing procedural rules governing disciplinary investigations.

The current Rules have not been revised since 1985 and is also based on the previous ABA Model Rules. Since that time, the vast majority of State bars in the United States have adopted substantive disciplinary rules based on the newer ABA Model Rules of Professional Conduct.

According to the notice from the Office, the extensive changes are meant to bring standards of ethical practice before the Office into closer conformity with the Rules of Professional Conduct adopted by nearly all States and the District of Columbia, while addressing circumstances particular to practice before the Office.

July 31, 2012

CP Productions, Inc. Sues John Doe for copyright Infringement of Video: “GH Hustlers – Maryjane’s Second Visit”

By Overhauser Law Offices, LLC

Indianapolis IN – Copyright lawyers for CP Productions, Inc. of Phoenix, AZ filed a copyright infringement declaratory judgment suit in alleging John Doe, an alleged serial infringer known at this time only by an IP address, infringed the copyrighted work “GH Hustlers – Maryjane’s Second Visit” which has been registered by the US Copyright Office.

In the complaint filed by attorneys for CP Productions, John Doe and other un-named parties are believed to have infringed a copyrighted video belonging to CP Productions. CP Productions is a producer of adult entertainment and seeks judgment against John Doe and others for the alleged serial infringement of the video “GH Hustlers–Maryjane’s Second Visit” to which the Plaintiff owns the copyright. John Doe and the joint tortfeasers are not known by name but rather, through their IP address and attorneys for CP Productions will be filing a Motion for Leave to Take Discovery in order to ascertain the actual identities of the Defendants from their ISPs. CP Productions is seeking judgment from counts including copyright infringement, civil conspiracy, and contributory infringement. CP Productions claims to have observed John Doe’s infringing multiple copyrighted content through agents the Plaintiff has employed using the BitTorrent protocol because the Plaintiff employs P2P netword forensic software to provide real time monitoring of the BitTorrent swarm that distributes the video. This software allowed CP Productions to log John Doe and the joint tortfeasers unlawful activities. CP Productions further alleges that John Doe and the joint tortfeasers intentionally downloaded a torrent file particular to the Plaintiff’s video, purposefully uploaded the torrent into their BitTorrent clients and entered a BitTorrent swarm particular to the Plaintiff’s video and reproduced and distributed the copyrighted video among themselves and third parties thereby becoming both and uploader and downloader of the video. By doing so, CP Productions claims that this “ever growing swarm will jointly contribute to the complete download of the Video for all individuals that enter the swarm at any given moment.” CP Productions believes that this lawsuit is the only practical means by which to combat BitTorrent based infringement. Because the damage claimed by CP Prodcutions includes economic and reputation losses, to which Plaintiff asserts will continue, the Complaint sets out demand for actual or statutory damages allowed under the Copyright Law, compensatory damages for the counts of civil conspiracy and contributory infringement, and an order or impoundment for all copies of Plaintiff’s works, photographs or other materials in the Defendant’s possession or control.

Practice Tip: The BitTorrent protocol is a decentralized method that allows users to distribute data via the Internet, and has become an extremely popular method for unlawful copying, reproducing and distributing files in violation of the copyright laws. Where this market was once consumed by music copyright violations, the adult entertainment industry has seen an increase in litigation against infringers using BitTorrent-based technology. Although no concrete rules govern jurisdiction of the Internet, Indiana’s long arm statute (Indiana Rule of Trial Procedure 4.4) permit personal jurisdiction of Defendants if they either downloaded or uploaded the copyrighted material.

July 27, 2012

U.S. Patent Office Publishes Rules Implementing the America Invents Act

By Overhauser Law Offices, LLC

Washington, DC. On Thursday, July 26, 2012, the United States Patent Office published in the Federal Register proposed rules and proposed examination guidelines for the first-inventor-to-file provision of the America Invents Act. The first-inventor-to-file provision converts the United States from a “first-to-invent” to a “first-inventor-to-file” system. The proposed rules and proposed examination guidelines amend the rules of patent practice to implement the conversion and show the Office’s interpretation of how the conversion impacts sections of the Manual of Patent Examining Procedure related to novelty and obviousness. The proposed rules and proposed examination guidelines are accessible here:

First-Inventor-to-File Proposed Rules (77 Fed. Reg. 43742, July 26, 2012)

First-Inventor-to-File Proposed Examination Guidelines (77 Fed. Reg. 43759, July 27, 2012)

June 27, 2012

APP Press Sues Apress Media for Declaration of Non- Infringement of Trademark “App Press”

By Overhauser Law Offices, LLC

Indianapolis; IN – Trademark attorneys for App Press, LLC of Indianapolis, Indiana filed a declaratory judgment suit seeking a declaration that it is not infringing the trademarks of Apress Media, LLC of New York, New York.

App Press, LLC brings action against Apress Media, LLC in order to protect the right to use and continue to conduct business under the registered trademark, and asserts that use of the mark for App Press does not infringe on any trademark held by Apress. App Press is a company that creates, owns, and licenses the use of web-based software that allows consumers to create apps that can be used on mobile devices. According to the Complaint, App Press applied for trademark registration on January 7, 2011 and was registered by the United State Patent and Trademark Office on August 9, 2011. During this period, the trademark was open to opposition on May 24, 2011. Apress Media is a publishing company that edits, publishes and sells books with the focus on technological issues and how-to advice. Apress Media applied for trademark registration on May 7, 2010 and was registered on March 8, 2011. According to App Press, on August 15, 2011, Apress Media sent a cease and desist letter demanding App Press immediately stop the use of their trademark alleging that it infringed on the trademark of Apress and constituted trademark infringement, unfair competition, cyberpiracy and dilution. App Press claims that they forwarded the letter to their counsel who contacted Apress Media’s counsel by phone. Almost two weeks passed that counsel for both parties went back and forth via telephone before they were able to confer regarding the issues set forth in the letter in which App Press agreed and sent a letter describing their product and why it was not infringing on Apress Media’s trademark. Approximately eight months later, on May 8, 2012, Apress again contacted App Press and again asserted that App Press’s use of the App Press trademark was infringing on the Apress trademark. Counsel for App Press has filed the Complaint for declaratory relief and to obtain declaration that App Press’s use of their trademark does not infringe upon any trademarks owned by Apress Media.

Practice Tip: The remedy of declaratory judgment is found in 28 U.S.C.A. § 2201 and allows for any US court to declare the rights and other legal relations of any interested party seeking such declaration, whether or not further relief is or could be sought.
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June 26, 2012

Dillinger Sues Pour House on Lincoln for Trademark Infringement of PUBLIC ENEMY

By Overhauser Law Offices, LLC

Indianapolis; IN – Trademark attorneys for Dillinger, LLC of Mooresville, Indiana filed a complaint for injunctive relief and damages in alleging The Pour House on Lincoln, Inc. d/b/a Dillinger’s Chicago Bar & Grill, Inc. of Chicago, Illinois infringed trademark registration nos. 3,483,359 for the mark DILLINGER’S and no. 4,091,160 for the mark PUBLIC ENEMY which have been registered by the US Trademark Office.

Dillinger, LLC is owned and operated by Jeff Scalf and, according to the Complaint, is the descendant of gentleman bandit John Dillinger. Dillinger, LLC owns numerous trademark registrations for DILLINGER, JOHN DILLINGER, PUBLIC ENEMIES, and many other trademarks related to the life of John Dillinger. Dillinger, LLC is also the owner of all rights, title, and interest to both DILLINGER’S and PUBLIC ENEMIES and both marks have been used in interstate commerce in connection with restaurant and bar services as early as 2002. According to the Complaint, Dillinger, LLC has never authorized The Pour House on Lincoln d/b/a Dillinger’s Chicago Bar & Grill to use the DILLINGER or PUBLIC ENEMIES marks in any way and also alleges that in July 2010 it came to their attention that the Defendants were operating a restaurant using the DILLINGER and PUBLIC ENEMIES trademarks. Upon their knowledge of the trademark usage, Dillinger, LLC alleges that The Pour House was contacted about the infringement and in August of the same year they traveled to Indianapolis for the purpose of obtaining a license for the use of the trademarks. The Complaint states that an oral agreement was reached and reduced to writing, but never executed and yet The Pour House willfully continued its infringing usage of the DILLINGER and PUBLIC ENEMIES trademarks, specifically on their website, food and drink menus and the menus posted on the storefront. Dillinger, LLC asserts five counts for the violations of the defendants, including demand for preliminary and permanent injunction; federal trademark infringement; cybersquatting; false designation of origin, false descriptions and unfair competition; and dilution by blurring. In order to avoid any irreparable harm from the loss of reputation the DILLINGER names could suffer as a result of the unauthorized use of the trademarks and the accrual thereof, Dillinger, LLC is seeking to permanently enjoin The Pour House from using the DILLINGER and PUBLIC ENEMIES trademarks or inducing such belief, actual damages suffered as a result of the alleged trademark violations, statutory and exemplary damages, and the profits derived from the infringing activities.

Practice Tip: U.S.C. title 15, chapter 22 governs trademarks, and §1117 specifically details the relief which can be granted as a result of trademark violation.
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May 30, 2012

Tower Reinforcement Sues Crown Castle International for Patent Infringement of TOWER REINFORCEMENT APPARATUS AND METHOD

By Overhauser Law Offices, LLC

Indianapolis; IN – Patent attorneys for Tower Reinforcement of Newburgh, Indiana filed a patent infringement suit in the Southern District of Indiana alleging Crown Castle International and Crown Castle Operating of Houston, Texas, and Aero Solutions, LLC of Boulder, Colorado infringed patent no.7,849,659, TOWER REINFORCEMENT APPARATUS AND METHOD, which has been issued by the US Patent Office.

Both the Crown Defendants and Aero Solutions are incorporated outside of Indiana, but the complaint alleges they maintain substantial contacts with Indiana by regularly conducting business in the state. Tower alleges patent infringement of three of their patents–“the ‘659 patent,” “the ‘972 patent,” and “the ‘712 patent”–to which Tower owns all the rights and interest. According to Tower’s complaint, the Defendants had actual notice of the Tower patents and still infringed on the patents through their making, using, selling and the offer of sale of products utilizing Tower’s patented technology. Tower asserts that the Defendants also encourage the design and construction of the protected patents, their actions being willful and deliberate. The complaint does not give many details about specific acts of infringement. Tower alleges they have, and will continue to, suffer substantial and irreparable financial loss and is therefore seeking to permanently enjoin the Defendants from their infringing activities of their ‘659, ‘972, and ‘712 patents.

Practice Tip: The US Patent laws applicable to this suit are 35 U.S.C. §§ 1, et seq. Specifically, 28 U.S.C. §§ 1338(a) gives district courts jurisdiction in any civil action relating to patents.