January 2007 Newsletter
LEYDIG, VOIT & MAYER, LTD. REPORT
Volume 8 Issue 1
TDRA protects famous trademarks from dilution
Trademark owners are no longer required to wait until their marks have already been damaged before they can sue under federal law to halt dilution.
The Trademark Dilution Revision Act of 2006 (TDRA), passed in October, requires only that trademark owners prove that unauthorized use of their marks is likely to cause dilution to initiate actions for injunctive relief. The legislation overrules the 2003 U.S. Supreme Court decision in Moseley v. Victoria’s Secret, which required evidence of actual dilution. The legislation addressed concerns by trademark owners resulting from the Moseley decision.
The TDRA recognizes two forms of dilution: blurring, or using a famous mark for an unrelated product or purpose (e.g., Jim Beam for a rock band), and tarnishment, unauthorized use that damages a famous mark’s reputation, (e.g. American Express in connection with adult materials).
“Trademark law is designed to prevent harm to trademark owners,” says Mark Liss, a member of LVM’s Chicago office. “The Moseley decision meant owners had to wait until they’d already been harmed before they could sue. The offending name had to have been used long enough to have damaged the mark.”
Because the language in Moseley was ambiguous, it was not clear to trademark owners or their attorneys what was required to prove dilution to meet the standard.
“How much time needed to pass, and how much damage had to be done before you could demonstrate it — those questions were causing a great deal of frustration,” says Anne Naffziger, a member of LVM’s Seattle office. “Congress looked at what the standard should be and set clearer guidelines.”
The TDRA also clarifies that marks with acquired distinction (those with descriptive qualities that have been used extensively enough to have become associated with a certain product or company, such as Best Buy) may qualify for legal protection. Previously, only inherently distinctive marks (unique marks with no descriptive qualities, such as Kodak) were protected against dilution in some jurisdictions.
Federal TDRA protection does not extend to niche marks, which are those that are recognized within a particular region or industry. Trademarks must be widely known to the general consuming public to be deemed famous under the TDRA.
“For owners of truly famous trademarks, the TDRA offers protection even when an offending use isn’t a clear traditional trademark infringement,” says Liss. “This gives more uniform protection and owners can clearly get national injunctions.” In the past, says Naffziger, trademark owners had to rely more heavily on state laws to protect themselves against dilution.
“State laws vary, and not every state has had an anti-dilution law,” she says. “This act has drawn a fairly clear law to be interpreted and enforced across all states.”
Imperfections mar proposed patent litigation reform program
Legislation that would allow judges in at least five U.S. district courts to specialize in patent cases may be flawed, but it is not misguided.
The bill, proposed by Congressman Darrell Issa, R-Calif., would establish a 10-year pilot program in which district judges could choose to specialize in patent litigation — or not hear patent cases at all. The program would be open only to the 15 districts with the largest number of patent cases and to courts in which at least 10 judges are authorized for presidential appointment and in which at least three judges ask to hear patent cases.
“By and large, this is an excellent idea,” says Michael Hartmann, a member of LVM’s Chicago office. “We have judges who like patent cases, so why not play to their strengths? This would be somewhat comparable to the European system, which is more specialized than ours. There is an advantage to that, because judges are more knowledgeable in law and in technologies.”
The Issa bill, which has passed the House and is in committee in the Senate, is not perfect, however, Hartmann adds.
“At the starting gate as well as the finish line, improvements are needed,” he says. “One problem is that designating just a few districts will lead to some forum shopping when litigants have a choice of courts in which to file.”
“Additionally, the pilot program is much too long,” says John Augustyn, a member of LVM’s Chicago office. “Half that time should be enough to demonstrate whether it should be expanded across all jurisdictions.”
The ultimate goal is to allow judges in all districts to specialize in patent cases, and to reduce the number of reversals when cases reach the Federal Circuit. The reversal rate now is about 40 percent for Markman hearings, in which judges determine claim construction.
“If this were carried out right, there would be better, more consistent determinations of both claim construction and validity,” Hartmann says. “It wouldn’t solve all the concerns about litigating patents, but if it would solve even half of them, it would be worth it.”
E-filing speeds PTO document submissions
Improvements in the U.S. Patent and Trademark Office’s (PTO) electronic filing system have streamlined the electronic submission process for patent documents. As a result, electronic filing is rapidly becoming the method of choice for inventors and their attorneys.
The most significant advantage of electronically filing patent applications and associated documents, says Jeremy Jay, a member of LVM’s Washington, D.C., office, is that there is no delay between the time documents are submitted and the time they are placed in the patent application file. Moreover, new patent applications are immediately assigned application numbers and filing dates.
“When time is of the essence, knowing a document has been received and placed in the file can be a great benefit,” Jay says. “Whether it’s a new application or additional documents for an existing file, there’s no delay for mailing time or for clerks to process paper. When filing a new application, there is no time lag before you’re notified of the application number. So, if you have filed the application without an inventor-signed declaration, you can quickly prepare the declaration with the application number and send it to the inventor for his or her signature.”
Numerous types of documents can be filed electronically, including new applications with amino acid and nucleic acid sequences, Patent Cooperation Treaty (PCT) national stage applications, design applications with color drawings, amendments, information disclosure statements, requests for continued examination (RCEs), various types of petitions and many other documents.
For PCT applications that include sequence information, the sequence information is submitted as an electronic text file, so there is no per-page fee for the sequence submission.
Some documents, including certified copies, re-examinations and reissues (new and follow-on papers), new plant applications and protests, cannot be filed electronically. Likewise, maintenance fees must be paid non-electronically. However, most documents can be filed electronically, and the PTO is encouraging more such filings.
“The previous electronic submission procedure was complicated and difficult to use,” Jay says. “Now, however, the system has come of age. It’s easy and accurate, and it ensures that papers are processed correctly right away. That, along with the expanded number of documents the PTO will accept electronically, makes electronic filing very acceptable to inventors and attorneys alike.”
Panel rules ringtone licenses may be compelled from music publishers
Telecommunications companies and other businesses can compel music publishers to grant them licenses to market songs as downloadable ringtones for cellular phones.
In reaching that decision, the U.S. Copyright Office said that ringtones are little different from other forms of music reproduction, from compact discs and record albums to audiotapes and piano rolls. A download, the office said, is essentially the same as a physical recording, and thus is subject to Section 115 of federal copyright law.
The law compels song owners to license music for reproduction to anyone who will pay a set rate (currently 9.1 cents per song) established by the Copyright Office. The Recording Industry Association of America, which is an organization of the major record labels, requested the decision on ringtones in anticipation of a rate adjustment that takes effect this month.
“Ringtones are a huge revenue stream for everyone in the music industry,” says Kevin Parks, an associate in LVM’s Chicago office. “This decision means some negotiating leverage has been taken from music publishers, but it doesn’t make perfectly clear when companies may take advantage of compulsory licenses.”
If a ringtone is simply an excerpt of an existing recording, the song owner can be compelled to license it. If, however, the ringtone has been altered or expanded in such a way as to be considered a derivative work, the rights to it would require voluntary licensing.
“Whenever you look into music rights, you very quickly run into complexities that result because more than one owner is usually involved,” says Parks. “As a practical matter, due diligence and investigation are still necessary before any company can market songs as ringtones. Not every form and format of song is available for license, and legal expertise is often required to determine which are available by a compulsory license.”
Speed traps create risks in accelerated prosecution
Inventors now have the option of requesting accelerated prosecution to speed U.S. Patent & Trademark Office (PTO) examination of their patent applications, but the risks of the process may outweigh the rewards.
Under accelerated prosecution rules approved in August, the PTO will reach final office action within a year, rather than the five years it can now take. However, to obtain such accelerated prosecution, inventors must conduct their own searches of prior art and explain where limitations are found in the prior art.
“These rules require very detailed statements, claim element by claim element,” says Dan Hefner, a member of LVM’s Chicago office. “There’s a very high bar of accuracy required. If something were missed, or if during litigation someone focused on a certain paragraph that wasn’t stressed in the application, you could face allegations of attempting to mislead the Patent Office, even though there was no such attempt.”
Such allegations would probably be resolved by a determination of intent, since materiality would be likely to be presumed, says Eley Thompson, a member of LVM’s Chicago office.
“If you make a statement that’s wrong, the question may become one of intent,” he says. “That’s why this is so dangerous. Determining your intent in making the statement is analogous to deciding whether you made a mistake or committed fraud.”
Additionally, a requirement to explain why claims are patentable over the art cited could lead to estoppels and could limit application of the doctrine of equivalents, Hefner continues. At the same time, he adds, the rules for accelerated prosecution require that claims be limited to one invention and that there be no more than 20 claims submitted.
“It will be more expensive, because there will be increased attorney time to conduct the search and prepare documentation, as well as increased interaction with the PTO examiner,” he says. “But if a narrow patent application can be drafted, the prior art search produces only a few documents, and there’s a fear the patent is being infringed, it may be an option some applicants could consider.”
They should consider very carefully, Thompson emphasizes.
“Unless there are unusual circumstances, accelerated prosecution is dangerous and might be ill-advised,” he says. “You’d have to be extremely careful. If it involves something that’s subject to interpretation — and reading a patent usually does — it will be difficult to avoid later complications.”
Leydig announces
Leydig, Voit & Mayer is pleased to announce that, in recognition of their contributions to the firm, Paul J. Filbin and Jeremy C. Lowe have become members of the firm.
Leydig, Voit & Mayer is pleased to announce that the following attorneys have become associated with the firm:
Chicago
- David C. Annis received a B.S. in mechanical engineering from North Carolina State University in 2000 and a J.D. from Georgetown University in 2006.
- Angela J. Baylin received a B.S. in psychology from the University of Iowa in 1998, and a J.D. from DePaul University College of Law in 2006.
- Caryn C. Borg-Breen received a B.S. in chemistry from College of William and Mary in 1994, a Ph.D. in chemistry from the University of North Carolina at Chapel Hill in 2000, and a J.D. from Northwestern University in 2006.
- Atanu Das received bachelor’s and master’s degrees in electrical engineering from the University of Illinois, Urbana-Champaign, and a J.D. from Loyola in 2006.
- Ashlee B. Mehl received a B.S. in chemistry from Miami University in 2003, and a J.D. from Chicago-Kent College of Law in 2006.
- John K. Winn received a B.S. in electrical engineering and computer science from Washington University in 2000, and a J.D. from Washington University in 2006.
Seattle
- Scott S. Adams received a B.A. in mathematics and Russian from Willamette University in 2000, a M.A. in mathematics from Portland State University in 2004, and a J.D. from the University of Oregon School of Law in 2006.
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