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.
Today, the Federal Circuit upheld the District Court’s inequitable conduct verdict based on the submission of false affidavits to the United States Patent & Trademark Office (“PTO”). Intellect Wireless, Inc. v. HTC Corp., 2012-1658. In its precedential opinion, the Federal Circuit (Moore*, Prost, & O’Malley) handed down its first decision that affirmed a finding of materiality under the exception to the “but for” standard created in its pioneering opinion in Therasense, Inc. v. Becton, Dickinson & Co., 649 F.3d 1276 (Fed. Cir. 2011) (en banc). The Federal Circuit also stated that the submission of a false declaration to the PTO alone can be enough to show intent to deceive under the “single most reasonable inference” standard. Further, thirty years after it decided Rohm & Haas Co. v. Crystal Chem. Co., 722 F.2d 1556 (Fed. Cir. 1983), the Federal Circuit affirmed that it remains the framework for curing inequitable conduct before the PTO.
The Supreme Court today handed down a far reaching decision throwing out an attempt by Congress to deny the benefits conferred by federal law on same sex couples legally married under state law holding that the Defense of Marriage Act (“DOMA”), as so applied, constituted a deprivation of the equal liberty of persons protected by the Fifth Amendment. In so doing, and perhaps without realizing it, the Supreme Court was also writing an important copyright case.
On June 17, 2013, the United States Supreme Court announced a rule that blurs the lines between antitrust and patent law in the context of Hatch-Waxman litigation. In FTC v. Actavis, 570 U.S. 756 (2013), the Federal Trade Commission (“FTC”) prevailed when the Supreme Court held in a 5-to-3 decision  that reverse payment settlements in Hatch-Waxman cases are subject to antitrust scrutiny, resolving a circuit split and impassioned debate among antitrust lawyers. This is only the second antitrust case in 20 years where the enforcers have prevailed. The Court, however, rejected the FTC’s position that reverse-payment settlements were presumptively illegal, ruling that they are subject to scrutiny under the rule of reason.
The Honorable Judge James L. Robart recently took on the challenging task of determining a reasonable and non-discriminatory (“RAND”) royalty rate for Motorola’s standards-essential patents (“SEP”). Microsoft Corp. v. Motorola, Inc., 2013 U.S. Dist. LEXIS 60233, No. C10-11823 (W.D. Wash. Apr. 25, 2013). This decision comes after a two-year patent war between Microsoft and Motorola. In November 2010, Microsoft filed a breach of contract suit, alleging Motorola breached its obligation to license its SEP at a RAND rate.
On April 1, 2013, the U.S. Patent and Trademark Office (USPTO) published interim final rules revising several patent term adjustment (PTA) provisions in view of the AIA Technical Corrections Act of January 14, 2013. 78 Fed. Reg. 19416. The USPTO’s interim final rules became effective on April 1, 2013, and apply to any patent granted on or after January 14, 2013. Applications pending as of January 14, 2013 are therefore subject to the new rules.