Indiana Intellectual Property Law News

September 19, 2011

Recent Seventh Circuit Opinion Held Trademark Licenses May Not Be Assigned Absent Consent: “Service Agreement” However Was Not Explicitly Trademark Licenses and Therefore Could Be Assigned in Bankruptcy Case

Chicago, Ill. – The Seventh Circuit Court of Appeals has affirmed the Northern District of Illinois assignment of a “service agreement” in a bankruptcy case, despite a trademark license owner’s claim that the agreement was a trademark sub-license. In 2009, XMH Corp. filed for bankruptcy and requested the bankruptcy court’s permission to sell a subsidiary’s assets to a purchaser. The assets sold would have included an assignment of an executory contract between the subsidiary and Western Glove Works. The contract allowed XMH’s subsidiary to use the trademark and provided a share of the profits for Western Glove. The contract did not provide for assignment and was not explicitly called a trademark license agreement. Western Glove Works objected to the bankruptcy court’s assignment of the contract, arguing that the contract was a trademark license contract and therefore could not be assigned without its permission.

The questions before the court were (1) whether a trademark is assignable without the licensor’s permission and (2) whether a trademark license can be implied in an agreement that does not explicitly create a trademark license. This appeal was brought on behalf of Western Globe Works, which owns a license to the trademark in question, titled “JAG JEANS” and registered with the US Trademark Office.

The appellate court held that the universal rule is that trademark licenses are not assignable in the absence of a clause expressly authorizing assignment.” The court noted that unauthorized assignments of a trademark license may result in diminished quality of the marked products and therefore damage to the brand reputation indicated by the trademark. However, since the parties in this case had not explicitly called their contract a trademark sublicense, the contract in question was not governed by this universal rule, and therefore could be assigned by the bankruptcy court. The judgment of the Northern District of Illinois was therefore affirmed.

Circuit Judge Richard Posner wrote the opinion of the court, which Circuit Judges Bauer and Williams joined. The case was In re XMH Corp., case numbers 10-2596, 10-2597, 10-2598, and 10-2599 in the Seventh Circuit Court of Appeals, an appeal from the Northern District of Illinois, Eastern Division.

Practice Tip: As illustrated in this case, trademark licenses cannot be assigned unless there is a specific provision in the license contract that allows assignment. See Miller v. Glenn Miller Productions, Inc., 454 F.3d 975, 988 (9th Cir. 2006) (per curiam).

September 15, 2011

Obama Poised to Sign America Invents Act, Patent Reform Bill Now Passed Both House and Senate

By Overhauser Law Offices, LLC

Washington, D.C. – The America Invents Act, also called the Leahy-Smith Patent Reform Act, was passed by the U.S. Senate last week. The bill was sent to President Obama’s desk, ready for his signature before it can become law. The President is expected to sign the bill.

President Obama repeatedly has mentioned the patent reform legislation in recent speeches on the economy. The America Invents Act has been touted as a job creating bill and as an economic stimulus. Proponents argue that the reforms will streamline the patent process and allow companies to more quickly realize profits from technology and thereby employ more workers. Senator Leahy, one of the bill’s sponsors, also commented that the reform will improve the quality of patents. He told the New York Times, “For years, low-quality patents have been a drain on our patent system, and in turn our economy, by undermining the value of what it means to hold a patent. Higher-quality patents will infuse greater certainty into the patent system, which will better incentivize investment in American businesses, create jobs and grow our economy.” These claims, however, are complicated and controversial among intellectual property attorney experts on patent policy.

The biggest change brought on by the reform will give patent protection to the “first to file” for the patent, rather than the “first to invent” under the current system. Indiana Intellectual Property Law News blogged on the specifics of the legislation last month.

September 13, 2011

Bear Archery Files Another Patent Infringement Suit Over Bow Site with Fiber Optics – This Time, Against Vital Hunting

By Overhauser Law Offices, LLC

Evansville, IN – Patent lawyers for SOP Services of Las Vegas, Nevada and Bear Archery of Evansville, Indiana filed a patent infringement suit in alleging Vital Hunting Gear, Inc. of Lexington, KY infringed patent no. 7,159,325 and 7,343,686, BOW SIGHT WITH FIBER OPTICS, which has been issued by the US Patent Office.

This is the second suit brought by Bear Archery’s patent attorneys in the last 3 months asserting infringement of these two patents. Another suit filed in June, 2011 is reported here, and about eight other suits have been filed in the last four years.

As with the June 2011 complaint, the Complaint alleges that the defendant “has manufactured and continues to manufacture, use, sell, offer to sell and distribute fiber optic sights which infringe certain claims of the Patents-In-Suit.” Bear Archery seeks a declaratory judgment, injunction, impounding order, damages, costs, and attorney’s fees. In addition, the complaint also includes a trademark infringement claim; Bear Archery alleges that is “famous” WHISKER BISCUIT mark is infringed by Vital Hunting’s use of the term TEFLON BISCUIT. Although Bear Archery’s trademark attorneys stated in the compliant that “A true copy of registration 3,833,665 is attached as Exhibit D” [to the complaint], registration 3,833,665 is for an INFINITY MAX logo, and is owned by George A. Atkinson. This appears to have nothing to do with the claim against Vital Hunting.

Note: On August 31, 2011, Bear Archery’s patent infringement attorneys dismissed the case they filed in June 2011 against Impact Archery involving the same two patents.
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September 12, 2011

Seventh Circuit Rule Change Now Requires All Documents to Be Electronically Filed and Service

By Overhauser Law Offices, LLC

Chicago, Ill. – The Seventh Circuit Court of Appeals has instituted a circuit rule change that now requires all documents to be filed and served electronically. The rule does not apply to unrepresented parties, unless the party is an attorney representing herself. It also allows a party to request an exception from this requirement.

The court also added Rule 27, which provides procedures to be used for emergency filings outside of normal business hours. The rule notes “Counsel should not expect that electronic filings will be read and acted on outside business hours, unless arrangements for the emergency filing have been made in advance.”

The changes went into effect on May 1, 2011 and are available here.

September 9, 2011

Southern District of Indiana Issues Markman Ruling in Cook Inc. v. Endologix Patent Infringement Case Over Aortic Stent

By Overhauser Law Offices, LLC

Indianapolis, IN – The Southern District of Indiana has issued a claim construction order in a patent infringement lawsuit. Cook Incorporated, of Bloomington, Indiana, had filed a patent infringement lawsuit in the Southern District of Indiana against Endologix, Inc., of Irvine, California. The patents at issue are owned by Cook and are patent nos. 5,035,706, PERCUTANEOUS STENT AND METHOD FOR RETRIEVAL THEREOF and 5,755,777, EXPANDABLE TRANSLUMINAL GRAFT PROSTHESIS FOR REPAIR OF ANEURYSM, which have been issued by the US Patent Office.

The patents at issue are medical devices that are used to treat abdominal aortic aneurysms, which are caused by the weakening of the aorta. The patented technologies are stents that strengthen the walls of the aorta and delivery systems. Cook alleges that Endologix’s Powerlink product infringes its patents. On April 15, 2011, the court held a Markman hearing to determine whether the patents cover the alleged infringer’s product. The parties disputed whether certain features of Endologix product were covered by Cook’s patents and the meaning of specific terms in the patent’s claims. Judge Pratt’s order set out the meaning of over thirty the disputed claim terms.

According to Yahoo Finance, Endologix has interpreted the rulings to be favorable.

Practice Tip: As the court described in its opinion, “[i]n order to win a patent infringement suit, a plaintiff must establish that the patent claim “covers the alleged infringer’s product or process.” Markman, 517 U.S. at 374 (citation and internal quotations omitted). Consequently, the first step in an infringement analysis involves determining the meaning and the scope of the words of the patent’s claims.” While resolution of disputed claim terms, such as what occurred in this opinion, does not resolve the controversy entirely, it is a significant step.

September 8, 2011

Patent Claims for Catalytic Convertor Manufacturing Method Construed in BASF Corp. v. Aristo, Inc.

By Overhauser Law Offices, LLC

[Disclosure: Overhauser Law Offices, LLC, the publisher of this website, represents a party in this litigation]

Chief Judge Philip P. Simon for the Northern District of Indiana has construed the claims of Patent No. 5,866,210, METHOD FOR COATING A SUBSTRATE.

The ‘210 patent describes a method of coating substrates such as those used in catalytic converters. Catalytic converters are typically found in automobile and truck engines, and their purpose is to reduce or remove harmful emissions from engine exhaust. The type of catalytic converter relevant here is principally composed of a core – or substrate – which sits inside a metal housing. The substrate is a single unit (a monolithic substrate) that has a number of honeycomb-like channels running parallel to each other within the metal frame. Through various methods, the inner walls of these channels are coated with a catalyst slurry made of precious metals. As engine exhaust flows through the substrate’s channels, the precious metals coating the channels’ inner walls cause a chemical reaction that converts the harmful engine emissions into more benign substances. But because the precious metals are expensive, care must be taken to sufficiently coat the channels without wasting the catalytic slurry.

The ‘210 patent teaches a method of coating the channels of the substrate through a process called vacuum infusion coating. Through this process, one end of the substrate is partially immersed in a dip pan of catalytic slurry. The dip pan, the size and depth of which may vary, is loaded with an amount of slurry exceeding the amount of coating necessary to coat the walls of the substrate to a desired level. A vacuum is applied to the other end of the substrate, which draws the slurry of precious metals up the channels of the substrate to coat the inner walls of the substrate’s channels. The vacuum continues to suck air through the channels as the substrate is removed from the pan, and then the coating dries to the channel walls. The ‘210 patent teaches that each of the channels of the substrate are coated to the same length, creating a “uniform coating profile.” And as the specification explains, “the typical coating operation requires the immersion of one end of the substrate into the coating media followed by drying and then the insertion of the opposed end of the substrate into the coating media followed by drying and curing.”

The Court’s ruling on claim terms proposed by patent attorneys for the parties were as follows:
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September 7, 2011

GHJ Holdings Sues Indian Industries, Inc. in Texas for False Patent Marking of Dart and Billiard Equipment, Case Transferred to Southern District of Indiana

By Overhauser Law Offices, LLC

Evansville IN – Patent lawyers for GHJ Holdings of Texarkana, Texas filed a patent infringement suit in the Eastern District of Texas alleging Indian Industries, Inc. d/b/a Escalade Sports of Evansville, Indiana falsely marked products with expired and inapplicable patent no. 5,899,824, SNAP-FIT DART AND ADAPTER, 5,498,004, GAME DART, 5,271,625, FLEXIBLE POINT DART, 5,067,728, LAWN DART WITH SAFETY FEATURE, D425,943, and D425,572,FINS FOR A GAME DART, and D446,275 TONGUE AND GROOVE WOOD COVERED OUTDOOR POOL TABLE which have been issued by the US Patent Office. The case was transferred to the Southern District of Indiana on August 24, 2011 upon motion of Indian Industries.

The complaint alleges that packaging of Indian Industries product Accudart® Flight Savers states the product is protected by numerous patents, however, the patents listed on the packaging cover completely different types of products. The Flight Savers are an attachment to the back end of a dart. The patents listed on its packaging, however, cover a dart shaft and fin designs. The complaint alleges the packaging of Indian Industries product Mizerak™ Deluxe Chalk Cue and various other billiard equipment products are falsely marked with a patent ‘275, which covers a billiards table cover. The complaint seeks civil monetary fines, damages, costs, attorney fees and an injunction.

Practice Tip: This case has been brought qui tam, meaning GHJ has initiated the suit but it is the United States government who has been injured. The Patent Act essentially assigns the interest of the United State to private parties who may seek to enforce the false marking claim. 35 U.S.C. 292 states:

(a) . . .Whoever marks upon, or affixes to . . . any unpatented article, the word “patent” or any word or number importing that the same is patented, for the purpose of deceiving the public
. . .
Shall be fined not more than $500 for every such offense.
(b) . . . Any person may sue for the penalty, in which event one-half shall go to the person suing and the other to the use of the United States.

(emphasis added). In this case, before it was transferred to the Southern District of Indiana, the United States Attorney had filed an unopposed motion to intervene.
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September 6, 2011

Northern District of Indiana Grants Partial Summary Judgment for Chem Link Inc. in Patent Infringement Suit Over Pitch Pocket and Sealant

By Overhauser Law Offices, LLC

Fort Wayne, IN – The Northern District of Indiana has granted partial summary judgment in a patent infringement case. Geocel LLC, of Elkhart, Indiana, had filed a patent infringement lawsuit in the Northern District of Indiana seeking a declaratory judgment that patent no. RE 41,586, PITCH POCKET AND SEALANT, which has been issued by the US Patent Office and is owned by Chem Link Inc., of Schoolcraft, Michigan, is invalid and has not been infringed.

Geocel filed this patent infringement lawsuit seeking a declaratory judgment that some of claims in the ‘586 patent were invalid and that Geocel had not infringement the patent. Specifically, Geocel alleged claims 21-25 violate the rule against recapture based upon the fact that Chem Link had previously applied for a patent of similar technology that had been repeatedly rejected by the U.S. Patent Office. The issue in this summary judgment decision was whether claims 21-25 of the ‘586 patent violate the rule against recapture, which “prevents a patentee from regaining through reissue subject matter that he surrendered in an effort to obtain allowance of the original claims.” The court here concluded that the claims did not violate the rule against recapture, and therefore granted partial summary judgment in favor of Chem Link, indicating that the patent is valid. There are still unresolved issues in the case and it remains on the docket.

Practice Tip: As the court explained, Title 35 of the United States Code, Section 251 provides in part that: “Whenever any patent is, through error without any deceptive intention, deemed wholly or partly inoperative or invalid . . . by reason of the patentee claiming more or less than he had a right to claim in the patent, the Director shall, on the surrender of such patent and the payment of the fee required by law, reissue the patent for the invention disclosed in the original patent, and in accordance with a new and amended application, for the unexpired part of the term of the original patent. No new matter shall be introduced into the application for reissue.” The rule against recapture “prevents a patentee from regaining through reissue subject matter that he surrendered in an effort to obtain allowance of the original claims.” MBO Labs., Inc. v.Becton, Dickinson & Co., 602 F.3d 1306, 1313 (Fed. Cir. 2010) (quoting Hester Indus., Inc. v.Stein, Inc., 142 F.3d 1472, 1480 (Fed. Cir. 1998)).
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September 3, 2011

Trademark Processing Time At Record Low, According to New USPTO Dashboard

By Overhauser Law Offices, LLC

Washington, D.C. – The United States Patent and Trademark Office has launched a new web tool that shows that trademark application processing times are down to record lows. The average pendency to a first action on a new application is down to 2.7 months, while total pendency — defined as the average time from filing to registration, abandonment or notice of allowance — is at approximately 10.2 months. The USPTO’s Data Visualization Center provides the most recent statistics. Online applications utilizing Trademark Electronic Application System plus (“TEAS plus”) are processed fastest on average. Over 70% of trademark applications are now filed electronically, the website reveals.

The USPTO offers a similar dashboard for patent processing times. The average total time a patent application takes to process is 33.5 months, according to the site. These tools are part of USPTO’s efforts to provide better visibility into trademark and patent application processes. The dashboards will be updated quarterly.

September 2, 2011

Indiana Patent Attorneys Obtain 182 Patents for Indiana Companies in August, 2011

By Overhauser Law Offices, LLC

Indiana patent attorneys obtained issuance of the following 182 patents from the US Patent Office to persons and businesses in Indiana in August, 2011:

	PAT. NO.	TITLE
1	D644,146	Race car
2	8,010,455	Waste processing system and method
3	8,008,487	Substituted thieno[2,3-D]pyrimidines as fungicides
4	8,008,466	Use of untranslated region of osmotin gene to enhance transgene expression in plants
5	8,008,458	Fatty acid phenolic conjugates