For the half-year to 30 June 2014, the IPKat's regular team is supplemented by contributions from guest bloggers Alberto Bellan, Darren Meale and Nadia Zegze.

Two of our regular Kats are currently on blogging sabbaticals. They are David Brophy and Catherine Lee.

Sunday, 13 January 2013

Letter from AmeriKat: USPTO and SCOTUS warm things up Stateside

Miles away from cold London,
the AmeriKat enjoys a gentle
walk in the Maldvian sand 
This past week the AmeriKat has been battling an incredibly strong urge to get on a flight back to the States. Usually at this time of year when the mercury starts to drop, everyone is righteously sticking to their New Years' Resolutions and there is more economic doom and gloom on the airwaves and in print, the AmeriKat cannot think of anywhere she'd rather not be.  This year the feeling seems to be especially acute. So after a friend's birthday this weekend she found herself reserving flights to New York and then to the Maldives.   Although she has yet to purchase said flights, the very promise of some American optimism and convenience, together with some warm Maldivian sand under her paws is enough, for now, to warm her chilly London apartment.

With FRANDs like these, who needs
anemones?
Brett Morrison (c) 2009
The USPTO is also warming things up Stateside.  In the past week, the USPTO has published a policy paper on remedies for standards-essential patents subject to voluntary/F/RAND commitments, as well as dates for roundtables to discuss software patents.

The policy statement published on Tuesday sets out the US Department of Justice (DoJ's) Antitrust Division and the USPTO's perspectives on whether injunctive relief in judicial proceedings or exclusion orders in ITC cases are properly issued when a patent holder seeking such a remedy asserts standards-essential patents that are subject to RAND or FRAND licensing commitments.  After explaining the benefits of standards settings, the paper states that in some circumstances the remedy for an injunction or exclusion order may be inconsistent with the public interest, particularly where an exclusion order based on a F/RAND-encumbered patent appears to be incompatible with the terms of a patent holder's existing F/RAND licensing commitments to a standards developing organization (SDO).  For example, it may be concluded that a holder of such a patent had attempted to use an exclusion order to pressure a user of a standard to accept more onerous licensing terms than the patent holder would be otherwise entitled to receive under a F/RAND commitment with the view to "reclaim some of its enhanced market power" over users who relied on the assumption that those patents subject to the standard would be available on the same reasonable licensing terms.  An order in these circumstances may harm competition and consumers "by degrading one of the tools SDOs employ to mitigate the threat of such opportunistic actions by the holders of F/RAND-encumbered patents that are essential to their standards."  The paper nevertheless recognizes that an exclusion order may still be appropriate where a potential licencee is unable to or refuses to take a F/RAND licence and "is acting outside the scope of the patent holder's commitment to licence on F/RAND terms."  The paper concludes with two key points:  that it may be appropriate for the US ITC to delay the effective date of an exclusion order for a limited period of time to provide parties the opportunity to conclude a F/RAND licence and that decisions involving F/RAND encumbered standards-essential patents should be made with a view to promoting appropriate compensation for patent holders and strong incentives for innovators to participate in standards-setting activities. [ "Sounds imminently reasonable", yawns the AmeriKat.....]

Palms inhabiting a courtyard at Stanford University
(c) Stanford University
On 12 and 27 February 2013, the USPTO's General Counsel's office will be holding roundtables on the "Enhancement of Quality of Software-Related Patents" in New York City and Stanford, California.  Following, although probably not as a result of, David Kappos's speech on software patents last November, General Counsel, Bernard J. Knight, Jr, will be hosting the roundtables.  Mr Knight's legal background seems primarily focused on tax law, so she will be intrigued as to how the roundtable sessions will go in such a politically charged and often complex area like software patents.  The Federal Register Notice dated 27 December 2012 by Kappos explains that the USPTO seeks to form a partnership with the software community in order to enhance the quality of software-related patents, known as the Software Partnership, first by way of these roundtable sessions.   The statement reads:
"To commence the Software Partnership and to provide increased opportunities for all to participate, the USPTO is sponsoring two roundtable events with identical agendas, one in Silicon Valley, and the other in New York City. Each roundtable event will provide a forum for an informal and interactive discussion of topics relating to patents that are particularly relevant to the software community. While public attendees will have the opportunity to provide their individual input, group consensus advice will not be sought. 
For these initial roundtable events, this notice sets forth several topics to begin the Software Partnership discussion. The first topic relates to how to improve clarity of claim boundaries that define the scope of patent protection for claims that use functional language. The second topic requests that the public identify additional topics for future discussion by the Software Partnership. The third topic relates to a forthcoming Request for Comments on Preparation of Patent Applications and offers an opportunity for oral presentations on the Request for Comments at the Silicon Valley and New York City roundtable events. Written comments are requested in response to the first two discussion topics. Written comments on the third discussion topic must be submitted as directed in the forthcoming Request for Comments on Preparation of Patent Applications."
Readers can address their written comments to  SoftwareRoundtable2013@uspto.gov.  The comments will be available for public inspection via the USPTO website.  For further guidance and background on the three topics, please see the Federal Register Notice here.

For busy IBM inventors in Brazil,
Fernando de Noronha off the coast of Brazil,
may be the ideal paradise to unwind.  Just
be sure to invite the AmeriKat.
  
IBM tops the patent charts, again:  For the 20th year running, IBM has topped the patent charts with 6,478 patents in 2012 - a record for the company.  Approximately 30% of IBM's patents were produced by inventors outside of the US in R&D centers in Canada, Japan, Germany, the UK and Israel.  IBM's chief patent counsel, Manny Schecter, stated that the contribution of non-US-based inventions is expected to increase with the increasing productivity of new centers in Brazil and Kenya.  Samsung, Canon and Sony followed IBM in the table.  Following some easy Google searching, the AmeriKat was pleased to find that Schecter is an active Tweeter - to tweet Manny a congratulations on IBM's Meryl Streep-style streak, click here.


Nike of Samothrace at the Louvre.  Samothrace
is Greek island with ancient ruins of Palaepoli
including the Sanctuary of the Great Gods 

The AmeriKat (c) 2007
Nike Wins "Air Force 1s" Supreme Court Battle:  Last week, the US Supreme Court issued its decision in favor of Nike in its trade mark dispute against Already LLC.   Nike brought proceedings against Already in respect of two of its athletic shoes which it said infringed and diluted the Air Force 1 trade mark.  Already counterclaimed contending that the trade mark was invalid.  After Nike filed its complaint Nike issued a "Covenant Not to Sue" which, in its preamble  stated that "Already's actions . . . no longer infringe or dilute the NIKE Mark at a level sufficient to warrant the substantial time and expense of continued litigation".  After issuing the covenant, Nike moved to dismiss its claims and Already's invalidity counterclaim.  Already opposed dismissal of its counterclaim arguing that Nike had not established that its voluntary cessation had mooted its case.  In support of the argument  Already produced statements from potential investors claiming that they would not invest in Already until the Nike trade mark was invalidated.  The District Court dismissed the counterclaims concluding there was no justiciable controversy   The Second Circuit Court of Appeals affirmed explaining that the covenant was broadly drafted and as such, the court could not conceive of a shoe that would infringe Nike's trade mark yet would not fall within the covenant.   Already appealed to the Supreme Court who held that Nike's covenant not to pursue an infringement claim against Already was broad enough to moot the counterclaim.  Writing the unanimous opinion of the Court, Chief Justice Roberts stated:
"The covenant is unconditional and irrevocable. It prohibits Nike from filing suit or making any claim or demand; protects both Already and Already’s distributors and customers; and covers not just current or previous designs, but also colorable imitations. Once Nike demonstrated that the covenant encompasses all of Already’s allegedly unlawful conduct, it became incumbent on Already to indicate that it engages in or has sufficiently concrete plans to engage in activities that would arguably infringe Nike’s trademark yet not be covered by the covenant. But Already failed to do so in the courts below or in this Court. The case is thus moot because the challenged conduct cannot reasonably be expected to recur."
In response to Already's policy objection that in dismissing the claim Nike is allowed to bully small innovators, the Court stated this argument did not support Already's case on standing. Instead, the Court held :
"Granting covenants not to sue may be a risky long-term strategy for a trademark holder. And while accepting Already’s theory may benefit the small competitor in this case, it also lowers the gates for larger companies with more resources, who may challenge the intellectual property portfolios of more humble rivals simply because they are competitors in the same market. This would further encourage parties to employ litigation as a weapon against their competitors rather than as a last resort for settling disputes.... Already’s only legally cognizable injury—the fact that Nike took steps to enforce its trademark—is now gone and, given the breadth of the covenant, cannot reasonably be expected to recur. There being no other basis on which to find a live controversy, the case is clearly moot."  
A clear lesson from the Supreme Court on when not to fight for the sake of fighting, but also a reassuring stance for intellectual property owners who will be comforted by the fact that a decision to end their infringement actions may not expose them to continuing challenges to the validity of their rights (in exchange for a very broad covenant, of course!)

1 comment:

Suleman said...

Nike's Covenant Not to Sue seems like the makings of a way the IP system could be changed to reduce the level of litigation that is happening in certain sectors. The Court was clearly impressed with their stance. This could be a way of protecting smaller players, such as small research companies or government health departments from having to worry about patent litigation. I don't know how it could be used to prevent Apple v Samsung though.

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