On November 6, 2014, the Federal Trade Commission proposed a consent order that would settle charges against a patent assertion entity, MPHJ Technology Investments, LLC (“MPHJ”), and a law firm that represented MPHJ.
Led by Judge Richard Posner, the Seventh Circuit Court of Appeals recently refused what Posner called a “quixotic” attempt to extend copyright law. While the holding was perhaps to be expected, the opinion introduced a mystery of its own: If not copyright, what will stop today’s public-domain derivatives from sullying the eccentric detective’s hard-earned reputation?
In Petrella v. Metro-Goldwyn-Mayer, Inc., 572 U.S. __ (2014), the United States Supreme Court addressed the role that the equitable defense of laches – i.e., a plaintiff’s unreasonable and prejudicial delay in commencing suit – plays in relation to a claim of copyright infringement filed within the Copyright Act’s three-year statute of limitations period. There is no doubt that Petrella puts to rest a split amongst the Circuits by clarifying that laches cannot bar a claim for legal relief for infringement occurring within the three-year statutory window. Yet, Petrella should not be seen as a knock-out punch to the use of laches in copyright actions. To the contrary, Petrella re-emphasizes the important role that laches plays in connection with the equitable remedies available under the Copyright Act, and provides copyright defendants – and plaintiffs – with guidance as to whether, and to what extent, a plaintiff’s delay in filing suit may limit the availability of those equitable remedies. Additionally, Petrella’s discussion of a copyright plaintiff’s evidentiary burden and comments about the Copyright Act’s registration requirements raise interesting questions about the impact that a delay in filing suit may have on a plaintiff’s ability to prove infringement. Laches, it seems, “don’t go down for nobody.”
In Alice Corporation Pty. Ltd. v. CLS Bank International, el al., Case No. 13-298 (decided June 19, 2014) (“Alice Corp.”), the Supreme Court unanimously held that the subject patent claims are not patent-eligible under 35 U.S.C. § 101. The patents at issue are directed toward a process for mitigating “settlement risk,” i.e., for financial exchange transactions, in which a computer system is used as an intermediary between the parties to the transaction. The patent claims include a method for exchanging financial obligations, a computer system configured to carry out the method, and a computer-program-product claim covering the same process. The Court held that “the claims at issue are 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.” Alice Corp., slip op. at 1.
Bona fide intent, the sine qua non of non-use trademark applications, was given new meaning by the TTAB in a decision released unpublished February 21, 2014 but redesignated as precedent on March 26, 2014, thus placing at risk similar applications for oppositions and issued registrations for cancellation. The decision, Lincoln National Corporation v. Anderson, Consolidated Opposition Nos. 91192939 and 91194817, TTAB Mailed February 21, 2014, exemplifies an apparent trend of the TTAB requiring greater proof of an applicant’s “intent” as a jurisdictional prerequisite for filing or face a finding that the application is void ab initio. This finding may result from an opposition but, perhaps more significantly, from a cancellation many years following registration.
The recent arrests of Robert Faiella, an alleged seller on online marketplace Silk Road, and Charlie Shrem, the CEO of the startup BitInstant, marked a recent round in a series of law enforcement actions against what the government characterizes as a “rise in criminal activity” by people using the cryptographically-controlled digital currency, Bitcoin. The arrests of Shrem and Faiella occurred nearly contemporaneously with hearings by the New York Department of Financial Services to determine how to regulate Bitcoin in the State of New York. More than one source has suggested the timing of the arrests may have cast at least some cloud on the New York hearings on regulation of Bitcoin.
Battles between brand owners are frequently fought in the United States in two forums: the Trademark Trial and Appeal Board and federal district court. While the TTAB is limited to determining a party’s right to register its trademark, district courts may adjudicate rights to registration and use of a mark. When prosecuting or defending an inter partes challenge to registration before the TTAB, brand owners are wise to consider the possible preclusive impact of the TTAB’s decision in a later-filed or concurrently pending district court action. In its recent petition for a writ of certiorari, B&B Hardware, Inc. argues that Circuit Courts of Appeals are incurably split as to whether district courts are collaterally estopped from relitigating issues decided by the TTAB. In its opposition, respondent Hargis Industries, Inc. argues that any alleged Circuit split is illusory. B&B’s petition is still pending, and the Court recently invited the Solicitor General to file a brief expressing the view of the government.
On November 25, 2013, the jury in TQP Development, LLC v. 1-800-Flowers.com, et al., U.S.D.C., E.D. Tex., No. 2:11-cv-00248-JRG-RSP, returned a $2.3 million verdict for plaintiff TQP Development, LLC (“TQP”) against Newegg, Inc. (“Newegg”) in TQP’s suit for infringement of United States Patent No. 5,412,730 (the “’730 Patent”). TQP had claimed $5.1 million in damages.
In a unanimous opinion authored by Judge Posner, the Seventh Circuit recently upheld the district judge’s granting of plaintiff Kraft Foods Group Brands LLC’s motion to preliminarily enjoin defendant Cracker Barrel Old Country Store, Inc.’s sale of food products to grocery stores under the CRACKER BARREL trademark. The opinion is worth examining given the commercial prominence of the litigants and the always interesting insights of Judge Posner. Additionally, at the conclusion of this short article, I will posit an alternative theory of reverse consumer confusion potentially applicable to the facts of this dispute.
On October 1, 2013, the United States Supreme Court agreed to review the “exceptional” case standard for awarding attorneys’ fees in two separate patent-infringement cases. Both cases relate to patentees who are non-practicing entities. The outcome of these cases could potentially deter patent cases brought by non-practicing entities, as prevailing defendants may have an easier time obtaining attorneys’ fees.