Letter from AmeriKat: Brought to you by the Letters 'A', 'W' and 'R' and the numbers 50 million and $100 million

The AmeriKat and her niece kitten
watching hours of the wonderful
Sesame Street
Over the past 18 months or so, the AmeriKat has delved back into the once familiar world of Sesame Street, hardback books with impossibly cuddly kittens in them and little jars of applesauce.  As she is shaping herself into the fashionable and fun aunt, the majority of her skills have been honed in teaching her kitten niece key life skills, such as 100 % cotton - good, polyester-blend - bad, silver - good, gold -better, platinum - even better, and trying to convince her that Elmo is just not on the same intellectual level as Grover (i.e. character over beauty).  The latter belief, however, cannot be budged as it is cute red baby-faced Elmo that grabs her and many young kittens attention over the more accident-prone, blue spindly Grover. But while watching about 84 episodes and clips of Sesame Street this last Christmas to convince the little one of her mistaken allegiance, the AmeriKat was reminded of how seamless and congruous Sesame Street's episode production is.  Centered over a theme, a number and a letter every clip effortlessly teaches you, with a little humor, the building blocks of knowledge and human interaction.  So on that theme, today's post is brought you by the following numbers and letters.....

You won't be finding any Cuban-made Havana Club rum
in the Supreme Court Justices' Conference Room
The letter 'R': The letter that stands for the AmeriKat's spirit of choice - rum - and subject of Monday's Supreme Court decision (not "decision decision") not to intervene in the on-going dispute over the rights of the HAVANA CLUB name in Empresa Cubana v Department of Treasury.  The AmeriKat has previously written on a separate but similar strand of the trade mark infringement dispute relating to the Puerto Rican and Cuban rum saga between Pernod Ricard and Bacardi (here and here) over the HAVANA CLUB mark.  Pernod Ricard who has an agreement with Cuba state-owned company, Cubaexport, is permitted to sell the Havana Club rum in every country under its US trade mark name - HAVANA CLUB- save for the U.S. where the Cuban trade embargo on goods produced in Cuba is still alive and kicking.  Barcardi has made and sold Puerto Rican made rum under the Havana Club name since 2006 in the U.S..  However, the subject of the current case is the US Treasury Department's Office of Foreign Assets Control's recent refusal to renew Cubaexport's trade mark citing section 211 of the WTO-disputed Appropriations Act which makes trade marks confiscated by the Cuban government, such as by Cubaexport, unenforceable.   The Court of Appeals for the District of Columbia (i.e. Washington) upheld the decision (see decision here).  The decision by the Supreme Court not to grant the writ of certiorari leaves their decision in tact.  Pernod stated that should the American embargo be lifted, it would start selling a new rum under a new mark - Havanista:
"In light of this decision, Pernod Ricard announces the registration of the trademark Havanista® with the USTPO. Produced and bottled in Cuba, Havanista® is a premium Cuban rum specifically aimed at the U.S market, which will be launched if the embargo is lifted. Havanista® will be a celebration of Cuban taste and culture in a genuine Cuban rum. It will benefit from the same high-level production processes and quality requirements as the Havana Club range."
 For more information see Pernod's Press Release on the decision here.  

The number 50 million:  The number of people in the US since 1997, that have taken Bristol-Myers Squibb's blood-thinning drug Plavix.   Plavix made $7.09 billion dollars in 2011.  Even with the expiry of Plavix's patents last Thursday their market share is not predicted to change, according to Barbara Ryan, an analyst with Deutsche Bank as reported by Bloomberg.  On the face of it, Plavix's patent expiry may have arguably paved the way for Eli Lilly & Co's and AstraZeneca's own blood-thinning drugs, Effient and Brilinta respectively, to gain more market share but the expiry of the patent does not mean that increasing the market share of their competitor drugs will be easy.  In the pharmaceutical industry, once you have carved out your monopoly with patent protection and your drug has proved safe and effective in a patent's care plan, it is difficult for subsequent and competitive drugs to overtake that established market share even when your patent protection expires.  Instead, Effient and Brilinta, as well as several new generic drugs, will have to concentrate on developing their new patient market. According to Seamus Fernandez, an analyst with Leerink Swan, Effient sales will peak in 2017 at $865 million and Brilinta may reach $1.77 billion, as compared to Plavix's 2011 sales of $7.09 billion.  So perhaps, our little limited monopoly incentive ideals in patent and IP law aren't as limited as they may first appear....For more information see this New York Times article here and see guest Kat Norman's post on the recent Canadian litigation involving Plavix here.

The view of Director Kappos from the AmeriKat's
computer this afternoon as she listed to almost
2.5 hours of testimony....exciting times...
The letter 'A':  The letter that starts the American Invents Act (AIA) (see previous posts here) which formed the subject of US Patent and Trade Mark Office (USPTO) Director David Kappos's testimony to the House Judiciary Committee last week (watch the full hearing here).   Director Kappos reported to the Committee regarding the status of the implementation of the AIA of which seven provisions have been implemented and where the USPTO has published rules for a further nine provisions. Joining Director Kappos was the Senior Vice President and General Counsel of Eli Lilly, Robert Armitage (read his written testimony here), General Electric's Chief IP Counsel, Car"l Horton (read his written testimony here), President and Chief IP Counsel of 3M Innovative Properties, Kevin Rhodes (read his written testimony here), Richard Brandon, Associate General Counsel of the University of Michigan on behalf of the Association of American Universities (written testimony here) and Eliot Williams of Baker Botts LLP on behalf of several financial and banking associations (written testimony here).

As as well as outlining the continued work on the Trial Rules and various international arrangements such as the Patent Prosecution Highway, Director Kappos stated that with the adoption fo the AIA:
"the U.S. is now able to implement an optimal 21st century harmonized patent system – one that international negotiations have anticipated for the last 25 years. Congress has enabled the USPTO to not only act, but to lead in realizing a vision of an IP world in which national and regional patent systems are coordinated to create an optimal environment for technological innovation and diffusion. Passage of the AIA has provided an opportunity to restart long-stalled discussions with our foreign counterparts toward substantive harmonization that will help U.S. businesses succeed in the global business environment.  
 The USPTO is working to capture this opportunity, reaching out to our stakeholders and our counterparts in patent offices throughout the world, to work toward substantive patent law harmonization. During the first week of April, I visited several of our foreign counterparts to discuss this unrivalled opportunity for substantive patent law harmonization. During these conversations I stressed that a key issue to realizing international harmonization is European adoption of a modern grace period. The grace period has been adopted in many patent systems throughout the world and is recognized as a global best practice. We look forward to continuing these discussions."
[Merpel imagines that Baroness Wilcox will be taking note of such beautiful political soundbytes on the merits of "international patent harmonization" in case she is ever called back before the House of Common's Scrutiny Committee to give evidence on the European unitary patent proposals.]

Director Kappos also stated that the recent spate of mobile phone and technology patent disputes was not a by-product of a flawed patent system.
Congressman Watt
(D-North Carolina)
Congressman Watt:  "Based on recent press accounts, technology companies seem to be engaged in a so-called patent arms race. Tech companies are spending a lot of money to buy patent portfolios and suing to block technologies in every conceivable venue...Over the course of this Congress we frequently heard representatives of the tech community argue that copyright infringement suits brought against tech companies by content owners stifle innovation. By that logic the rash of patent cases brought against tech companies by tech companies might stifle innovation. Can you give us your take on this and does litigation to protect intellectual property rights stifle innovation? Is there any reason to think that copyright litigation against tech companies stifles technological innovation any more or less than patent litigation?   
Director Kappos:  No, I don't think there is any reason to believe that any copyright or patent lawsuits of the kind that we are seeing in the so-called smart phone wars are a sign of stifling technological innovation. In fact much to the contrary... We've seen this movie many times before. We saw it when Boulton and Watt got into their fights in the 18th Century in England over the patents that started the Industrial Revolution...We saw it when the sewing machine was invented and then we saw it when the telegraph was invented...It starts with fundamental technology innovation that is transformative in nature.  Then others come along and want to do incremental innovation on top of it. The original innovators, let's say the Apples of the world, as an example...have intellectual property positions resulting from massive investments, they seek to enforce those investments to level the playing field in some way and you have a dust-up as we are seeing right now. I don't believe its a sign that there is anything wrong with the innovation environment in the US, in fact I think it is a by-product of a very healthy overall innovation environment. These things happen, they sort themselves out over time -its a strength of our system that we have strong and balanced intellectual property rights that lets folks play their hands out in the way they are...I don't think its in any way a sign that there is some fundamental problem with patents across the board. It would be different if we were talking about non-innovators involved in these patent wars, but we are talking about some of the most innovative companies on the planet...I see it as a market reaction to a market development...in a tremendously competitive market."
Is Director Kappos correct or is it reasonable to point some blame on some arguably improperly granted patents?

The label she wishes she could
find in a new raincoat....dreams...
The number $100 million:  The amount in damages that Manhattan federal court awarded British heritage label Burberry last week in a trade mark infringement lawsuit brought by the label against several Chiense websites using the Burberry trade mark and selling counterfeit Burberry goods.  The court also awarded Burberry the domains from where the goods were being sold - yesburberryision.com and buyburberry.com.  More importantly, it is reported that the judge also decided to afford Burberry the election to "hold third-party hosts; payment processors; search engines, such as Google, and social media sites such as Facebook and Twitter, accountable for associating with the infringing sites"  such third-party services not being permitted to provide services or links to the sites.  (The AmeriKat has not been able to hunt down a copy of the decision to ascertain exactly what the judge said, so if any kind readers find it please let her know.)   The AmeriKat doubts that proving actionable "association" between third-party services and such links will be easy and may just prove to be rhetoric from the judge, District Judge Thomas Griesa.  The Burberry decision is the third in a trio of robust trade mark counterfeit decisions this month in the U.S. which includes Judge Denise Cote's $100 million award to Hermes against similar counterfeit outfits trading on sites such as HermesBagsOutlet.org and HermesBirkin-Bags.org and Judge Ronald Guzman of the Northern District of Illinois's award of $686 million to Uggs's parent company Deckers Outdoor Corp in their lawsuit against 3,000 China-based websites.  Under the US Immigration and Customs Enforcement's Homeland Security Investigations and the National Intellectual Property Rights Coordination Center's initiative - Operation In Our Sites - the US Department of Justice can recover defendants' monies collected by third-party sites, i.e., through payment processors, which makes it easier for rightsowners suing in the US to enforce their judgments against foreign defendants.  
World Industries's skate shoe subject to Adidas's

The letter 'W':  The letter which features on the side of the upper sole of World Industries's skater shoe (and which also stands for "World") which is the subject of a trade mark complaint brought by Adidas against the California based manufacturer.  Adidas, whose famous three-stripe logo, filed its claim in Oregon federal court last week alleging that World has made unauthorized use of its three-stripes trade mark.  Adidas's North American headquarters are located in Portland, Oregon.  Adidas also sued Big 5 Sporting Goods which featured the offending shoe in a full-page ad.  In the ad, an Adidas "Tip Off 2" basketball shoe with three stripes was positioned next to World's "Major" skate shoe.  According to Adidas's complaint, the retailer also positioned the shoes next to each other in their stores.  To Merpel and the AmeriKat, both can see, not three stripes, but the tip of King Triton's trident.  According to World Industries' parent's president, Scott Chantos "we cap the top of our W so it looks like a pitchfork.  And one of our logos is a devil holding a pitchfork."  "Ahh...so not quite Greek mythology reference we were hoping for", says the AmeriKat.  Do readers see or associate Adidas's three stripes with the shoe?  

Letter from AmeriKat: Brought to you by the Letters 'A', 'W' and 'R' and the numbers 50 million and $100 million Letter from AmeriKat: Brought to you by the Letters 'A', 'W' and 'R' and the numbers 50 million and  $100 million Reviewed by Annsley Merelle Ward on Sunday, May 20, 2012 Rating: 5


  1. Director Kappos believes that "a key issue to realizing international harmonization is European adoption of a modern grace period."

    The trouble is, the AIA doesn't provide a modern grace period that any other country would want to harmonise with.

    If you just took the new section 102(b)(1)(A) by itself, that's a modern grace period. It provides that disclosures of the inventor's own work are graced for a period of one year. The USA could then seek to persuade Europe that that's sensible and desirable. (I do not wish to comment here on whether or not it is.)

    But Congress also enacted section 102(b)(1)(B), perhaps in an attempt to appease the first-to-invent lobby. It provides that if an inventor A publishes his work, then he has a year in which he is also graced against anyone else's later disclosure, e.g. by an inventor B.

    Meanwhile, of course, in a first-inventor-to-file system, Inventor A's publication acts as full prior art against any subsequent patent application filed by Inventor B. Even if Inventor B is the first to file.

    That is not a modern grace period. Nor is it truly "first-inventor-to-file". It substitutes "first to invent" with what has been called "first to publish". Inventor A can no longer rely on priority from his date of invention, but effectively he can establish a priority date by publishing his invention instead.

    There are at least two problems with this.

    First, to get the benefit, Inventor A has to publish his invention, at an early stage when publication may not be in his best interests. It reduces his options 12 months later: he can't further delay his patent application because it would be invalid. And he has ruined his chances of foreign protection, unless all other countries of interest also adopt a grace period.

    Second, imagine Inventor A's patent is granted, and you are advising a competitor about freedom to operate. You have some prior art published in the one year grace period. Under the old "first to invent" law, you can't give firm advice. You don't know whether this prior art will be effective, because you don't know whether Inventor A will be able to swear to an earlier date of invention.

    And under the new "first to publish" law, you still can't give firm advice. You don't know whether Inventor A published his invention before the date of the prior art, perhaps in some obscure journal or an advertising brochure that you are not aware of.

    First-to-invent is a system that has problems, but at least it is internally consistent. First-to-file is also internally consistent, even if you believe that the lack of a grace period is a problem. It would be possible to add a grace period to first to file in a way that remained internally consistent. But "first to publish" does not achieve that. It is just an inconsistent mess.

    Director Kappos will not be able to persuade other countries to adopt this mess. So even if Europe does change, we will still end up with different systems. True harmonisation would require further change from the USA. Given the difficulty they had getting the AIA through Congress, I don't give that much chance.

  2. So, Director Kappos says that "a key issue to realizing international harmonization is European adoption of a modern grace period" and that "the U.S. is now able to implement an optimal 21st century harmonized patent system – one that international negotiations have anticipated for the last 25 years".

    Excuse me:-
    How is adopting a first-to-publish system that no other country has "harmonization"? Is the US the only country marching in step?

    How is a first to publish system "optimal" when even US practitioners are nervous as to its effects?

    Who anticipated that the US would do something so daft?

    So far as European adoption of the same system - let us see how the US system works for, say, 25 years before adopting an untested system.

    In the meantime, the grace period under Article 55(1)(a) EPC could usefully be amended to negate the unfortunate effects of harsh case law by ensuring:-
    a) that the 6 month period runs from the priority date not the filing date
    b) that the standard is changed from an "evident abuse" level to an "unintentional" level.

  3. I se 3 stripes.. and in use (with jeans hanging over the trainer slightly) only the stripes will be visible...

  4. With recent antics in a Washington hotel being splashed across the front pages of the newspapers, I would have thought that use of the magiscule W as a trade mark might be considered to be in bad taste.


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