LoTempio Law Blog

LoTempio Law Blog

Patents, Trademarks, Copyright & Other Interesting Stuff, with N.Y. Attorney Vincent G. LoTempio

$33.7 Million award to Kodak upheld for Breach of Patent License

Posted in Patents, Uncategorized

The U.S. Court of Appeals in New York City Asia Optical Company’s rejected the appeal of a judgment by the federal district court that awarded Eastman Kodak Co. $33,726,531 in damages for  breach of a patent license agreement (Eastman Kodak Co. v. Asia Optical Co., Inc., May 1, 2013, PDF).Kodak-Logo

The dispute involved a 2004 patent licensing agreement (“PLA”)  where Kodak licensed its full set of digital camera patents to Asia Optical for royalties on the sales of certain digital cameras manufactured by Asia Optical.

In 2005, Asia Optical began making digital cameras as an original equipment manufacturer (OEM) for Fujifilm Corporation in China. The parties disputed whether Fujifilm qualified as a Kodak licensee under the parties’ agreement.

In March 2012, the district court ruled that:

  • Fujifilm did not have the broad license contemplated by the agreement;
  • the license agreement with Fujifilm was not royalty-bearing and did not require Fujifilm to make any payment to Kodak in connection with the licensed patents; and
  • Asia Optical breached the PLA by not making royalty payments for cameras made for Fujifilm.

Asia Optical’s principal argument on appeal was that the PLA was ambiguous because it could be read to have more than one meaning by a person aware of industry customs, practices, and terms.

Under New York law, a contract is ambiguous if the terms

“could suggest more than one meaning when viewed objectively by a reasonably intelligent person who has examined the context of the entire integrated agreement and who is cognizant of the customs, practices, usages and terminology as generally understood in the particular trade or business.”

The Appellate and  district court ruled that the PLA was not ambiguous, it clearly stated Optical did not have to pay royalties if (1) it sold to a Kodak licensee who chooses to pay royalty itself; or (2) if Asia Optical performs only contract assembly for a Kodak licensee.

“To accept Asia Optical’s reading would require finding that Kodak entered into a licensing agreement with Asia Optical that would allow Asia Optical to manufacture cameras for third parties who did not have licensing agreements with Kodak without either party paying Kodak for the use of its patents—a finding at odds with the record”.

 

On the wine trail at the Niagara Food & Wine Expo

Posted in Trademarks, Wine Trail and Trademark Talk

Last night we continued on the wine trail and visited Niagara Falls Ontario Canada convention center for the Niagara Food & Wine Expo. Attorney Barbara Piazza and her spouse and my wife and I had a great night and tasted a variety of vintages. There were wineries from local Canadian regions and wines from all over the world.Barbra Piazza

What do 20 Bees, Dan Aykroyd and Hatrick have in common? Each are trademarks and are on the labels of the Diamond Estates Winery located it Niagara on the Lake Ontario.

I personally sampled the 20 Bees Shiraz and before the night and I found it necessary to return for a second helping before retiring for the evening.

The great thing about wine tastings is that you could also go out on a limb and try something new. I sampled a Cherry wine from Wooden Bear L winery located in the heart of Ontario’s garden Simcoe Ontario.Wooden Bear L Winery

The cherry was a bronze medal award winner at the 2012 Canadian Wine Access Awards. It was a light dry red wine made from the Montmerency cherry. It certainly was deserving of the award.

There was an exhibition by the Canadian food and Wine Institute at Niagara College and various exhibits from other merchants. We saw many different types of wine glasses and decanters.  There was an a live exhibition of the 5 ounce decanter by Versovino. According to the spokesman  that is the perfect amount for a single glass serving.voga

The color and shape of the bottles by Voga from Italy captured my interest and the attention of many at the expo.

We tasted local wines and chocolate from Chile. The musical atmosphere made the evening fly and we had a wonderful time. The evening left me looking forward to our next stop on the wine trail.

Patents for Humanity Winners

Posted in Inventors, Patents

The U.S. Patent and Trademark Office’s (USPTO) Patents for Humanity awards were handed out in a ceremony on Capitol Hill last week. In addition to receiving the award and national recognition winners get a certificate for accelerated processing of future patent USPTO matters.gilead

The Obama administration has  pushed the USPTO to promote programs to solve long-standing development challenges in health and standards of living. 

Patents for Humanity is an awards competition for patent owners and licensees. It is the USPTO’s voluntary pilot program to recognize patent owners who apply their patented technology to address humanitarian needs. 

Remember all inventors come up with new technology to improve our way of life. Inventors are awarded a patent which gives them a monopoly for a brief period of time. In exchange for that monopoly the inventor gives his invention to society at the end the patent term. 

In essence every invention and every patent adds to humanity. This award is directed towards specific technologies that are currently threatening the well-being of global society: medical technology, food and nutrition, clean technology, and information technology.

“As a global leader, the United States has a responsibility to take the initiative on humanitarian issues,” said U. S. Senate Judiciary Committee Chairman Patrick Leahy (D-Vt.).

“Time and again history shows the profound impact that one good idea—patented and marketed—can have on human beings, our world, and our way of life,” said Acting Under Secretary of Commerce for Intellectual Property and Acting Director of the USPTO Teresa Stanek Rea.

2012 Patents for Humanity winners

Category: Medical – subcategory Medicines & Vaccines 

  • Gilead Sciences, for making HIV drugs available to the world’s poor using a network of generics manufacturers in Asia and Africa.
  • University of California, Berkeley, for developing research and license agreements to provide a lower-cost, more reliable way to produce anti-malarial compounds.

Category: Medical – subcategory Diagnostics & Devices 

Category: Food & Nutrition 

  • DuPont Pioneer, for developing an improved strain of sorghum fortified with more protein and vitamins for use in sub-Saharan Africa. 
  • Intermark Partners Strategic Management LLP, for extracting edible protein and vitamins from waste rice bran in Latin America.

Category: Clean Tech

  • Procter & Gamble, for distributing a small chemical packet which removes impurities and contaminants from drinking water and has purified nearly 5 billion liters worldwide.
  • Nokero, for delivering solar light bulbs and phone chargers for off-grid villages through local entrepreneurs.

Category: Info Tech 

  • Sproxil, Inc, for deploying a system to identify counterfeit drugs with an ordinary cell phone in sub-Saharan Africa.
  • Microsoft Corporation, for providing machine learning tools that allow health researchers to better analyze large data sets.

 

Micro entity lower fee for independent inventor

Posted in Inventors, Patents, Uncategorized

The micro entity provision of the Americas Invent Act is now law. Now all the rule changes mandated by the Leahy-Smith America Invents Act (AIA) have been implemented by the United States Patent and Trademark Office (USPTO). One reason for the change was to make the patent system more efficient and accessible to the independent inventor. 

To qualify as a micro entity, an applicant must meet all of the following criteria:

  • Qualify as a USPTO-defined small entity.
  • Not be named on more than four previously filed applications.
  • Not have a gross income more than three times the median household income in the previous year from when the fee(s) is paid. For 2011, the most recent year that data is available, the median income was $50,054.
  • Not be under an obligation to assign, grant, or convey a license or other ownership to another entity that does not meet the same income requirements as the inventor.

Of course the biggest obstacle to the independent inventor is lack of capital. Micro entity status lowers the government fee to file a patent application. There are three different categories of entity sizes. Micro entity, small entity and “large entity.”

Although the patent office doesn’t call it large entity they just basically say the fee is a set amount unless you are a small or micro entity. Basically the fees go down by 50% for the small entity and then another 50% for the micro entity.

Here’s an example of the way the USPTO Fee Schedule looks:uspto fee schedule

As it stands the total fee to file a non-provisional patent application for a micro entity is $330, for a small entity is $730 and a large entity is $1,460.  

That should make it a little easier for the independent inventor.

Billionaire sued over counterfeit wine

Posted in Trademarks, Uncategorized, Wine Trail and Trademark Talk

Ordinarily you hear news about purses bearing counterfeit trademarks being passed off as original. But intellectual property isn’t the only thing has been counterfeited recently. Of the more celebrated trials over counterfeit wine is continuing in a federal courthouse in Manhattan this week.Billionaire's Vinegar

The lawsuit was brought against Eric Greenberg by William I. Koch, the coal and petroleum magnate who is worth an estimated $4 billion and is #329 on the Forbes Billionaires list.

Obviously this case is being tried by the scorched earth approach because even though the court papers allege a value about $213,000 for the wine, this lawsuit now culminating in a trial has cost the litigants millions in legal fees.

This case stems from the purchase of 24 bottles of wine at a sale conducted by Zachys Wine Auctions in October 2005.

Koch alleges that these bottles are counterfeit and that Greenberg was aware of this when he consigned them. Zachys settled with Koch and is no longer part of the lawsuit. Greenberg denies any culpability because he did not know any of the bottles at issue were counterfeit; and that Koch should have authenticated the bottles before the auction.

On April 3rd, Jaime J. Cortes, a former employee of Greenberg testified because his employer received counterfeit wine from others that he included those counterfeit bottles in the auction. He testified,

“what they did to me, I going to do somebody else.”

This case reads like a soap opera. It’s curious that they let it get this far without settling. Reading through many of the online articles it appears that everyone has their own counterfeit wine story.

I hope this doesn’t suck out the anticipation of the rare wines. One must certainly have a discerning palate to be able to differentiate a wine like 1921 Château Cheval Blanc.

In an article written in Bloomberg.com by Elin McCoy reported that, Robert Schagrin, managing partner of New York’s Crush Wine company, said in a phone interview “The joy and anticipation has been sucked out of old, rare wines like 1921 Chateau Cheval Blanc.” I told him I’d never tasted that vintage. “Neither have I,” Schagrin said. “Though I drank a bottle that had the label.”

While there is no way to say what the decision of the Manhattan Federal Court jury will be, the law suit shows fraud, malpractice and misrepresentation is present in the fine and rare wine market.

Wine trail and trademark talk

Posted in Trademarks, Wine Trail and Trademark Talk

wine trail and trademark talkProtect your wine and label before the glasses are filled and put on the table.

Throughout the history of our civilization wine has been associated with rituals and regions acrosswine label the globe.

The aromas, savors and spirits of wine are as vast and varied as the grapes, the growers, and wineries that produce, bottle and sell the many celebrated shades of red and white.

In recent years the wine industry in New York state has expanded; and with it so has a trail of vineyards and legal issues.

The wine industry presents a medley of intellectual property challenges:

  • from patent issues that present as a result of innovative technology that channel the production of wine,
  • to trademark protection for label design and logos,
  • to copyrights for scripts that tell the story of wine that appear on bottles, in books and in brochures.

While the passage of  legislation in New York state allowing the shipment of wine directly from New York wineries to customers to purchase has presented great opportunities for wineries it too has presented greater concern for the protection against infringement of intellectual property rights.

Protecting your wine and label before the glasses are filled and put on the table isn’t just a cute slogan it is a necessary objective to protecting one’s wine, design, money and time.

New first-to-file patent rules

Posted in Patents

The new rules are now official and a first to file system has now been implemented by United States Patent and Trademark Office.

This first-to-file is pretty much governed under the 35 USC 102(a) and the exceptions under 35 USC (b). Simply speaking 102(a)(1) – has to do with publications and 102(a)(2) – talks about the filing date.

Here’s a chart (PDF) regarding the statutory framework for the first to inventor to file new rules.

Aside from first-to-file, biggest changes are that public use anywhere in the world now qualifies as prior art (used to be US only).

Also effective filing dates are now the earliest filed patent anywhere in the world (for foreign applications, we used to have the US effective filing date and foreign priority date, and would apply prior art differently depending if it was 102 a/b or e)– this a bonus for companies that file in other countries first, as they now get the earliest date for all prior art purposes.

LXBN TV interview: Shield Act To Kill Patent Trolls

Posted in Interviews

Recently I was interviewed by Colin O’Keefe of LXBN TV about the push in Congress and the Senate by bipartisan representatives to punish patent trolls.

Peter DeFazio (D-OR) and Jason Chaffetz (R-UT) announced the proposed legislation named the Shield Act, which would make the “patent troll” that brings a patent infringement lawsuit liable for both sides’ legal fees should they lose.

The Shield Act is an acronym for:Saving High-tech Innovators from Egregious Legal Disputes.

It appears that many people are jumping on the “we hate the patent trolls” bandwagon and there’s even a website called Shieldact.com trying to get the American people to pressure their representatives to push this into law.

In fact the Shield Act web site offers many different opportunities to spread awareness to support the bill.

This checklist is posted on the website

Here are three simple ways you can help:

  1. Email your contacts the link to this page on EMPact America’s web site: http://www.empactamerica.org/popvox.php
  2. Email your contacts this link, which sends them directly to the page for H.R. 668 on the Pop Vox web site: https://www.popvox.com/bills/us/112/hr668
  3. Add a small button / badge to your web site, using this code: <script src=”https://www.popvox.com/widgets/js/bill.js?bill=112/hr668&title=1″>

I tried to post that widget on this website but it just wouldn’t go in nicely. First it deleted everything underneath it when I put in the middle of the post. And then I attempted to put it on the bottom of the page and it wouldn’t take.

In any event, the biggest question I have is “if this act were to be made a law would the courts follow it and make the losing patent troll pay all attorneys costs?” I would like to see the first case follow the law.

 

Choosing the right trademark

Posted in Trademarks

I just put my most recent Ask the Patent Attorney video up on YouTube about what makes a strong trademark.  When choosing a trademark a major factor to consider is distinctiveness.

In the video (see below) we discuss the difference between a fanciful, arbitrary, suggestive, descriptive and generic mark.

Too bad True Fit Corporation didn’t watch a similar video before choosing their name.

Yesterday in the case of True Fit Corp. v. True & Co. (PDF), the court denied the plaintiff’s motion for a preliminary injunction based upon many factors.

The court ruled that a major factor was that the mark was closer to descriptive than it was to suggestive.

“This is like saying that the phrase “good food” is suggestive rather than descriptive, because it takes imagination to appreciate what it is the chef does to make the food taste good,” the court observed.

True Fit is a company providing a software service to help retail consumers find jeans that fit them well.True & Co. was formed in the fall of 2011 as an e-commerce lingerie retailer, providing women with a new way to shop for bras online.

True Fit argued that its marks were suggestive, not descriptive, because imagination was necessary to draw a connection between the word “true” and the nature of True Fit’s personalized fit services.

The Judge reasoned that the phrase “true fit” was commonplace among both retailers and consumers when referring to fitting and sizing.

In addition, the phrase described the function of True Fit’s software: helping a person pick a garment that is the person’s best fit, that is, his or her “true” fit.

The strongest trademarks are arbitrary and fanciful. Suggestive marks are somewhat descriptive and are not as strong but are enforceable. If a trademark is ruled descriptive by the court it means that anyone can use it.

Here’s the list of factors that the court used to decide not to grant a preliminary injunction:

  • Protectability of Marks. Because True Fit’s registered marks were descriptive, rather than suggestive, and had not achieved incontestable status, True Fit was required to show that the marks had acquired secondary meaning to be protectable.
  • Likelihood of Confusion. To evaluate the likelihood of consumer confusion, courts apply aneight-factor test: the similarity of the marks; the similarity of the goods; the relationship between the parties’ channels of trade; the relationship between the parties’ advertising; the classes of prospective purchasers; evidence of actual confusion; the defendants’ intent in adopting its mark; and the strength of the plaintiff’s mark.
  • Similarity of marks. Look at the total effects of the marks, considering their designs, fonts, and color schemes
  • Similarity of services. The parties’ services were similar in that they assisted online shoppers in finding the right fit of a garment by filling out an online quiz that did not rely on measurements.
  • Actual confusion. Evidence of actual consumer confusion.
  • Prospective purchasers. Did the parties target exactly the same class of prospective purchasers? For example directly to consumers versus wholesalers?
  • Advertising. What kind of advertising and who was the advertising directed to? What group retailers versus commercial purchasers?
  • Channels of trade. High-end stores versus Internet trade?
  • Strength of mark. Is it famous; is it a well known trademark in the industry?
  • Accused infringers intent. It is a clearly copied from the registered trademark or was it used prior to the registration.

In this case most of the factors went against the party that made the accusation of infringement. It doesn’t necessarily mean that the case is lost… but losing the battle may equate to losing the war and the lawsuit will end here.

The lesson to be learned is that when picking a mark  make sure it is not too descriptive.

 

SHIELD Act introduced to punish losing Patent Trolls

Posted in Patents

It’s pretty apparent that nobody likes patent trolls except for the attorneys that represent them. I think the biggest problem with nonpracticing entities (NPE’s) is that they sue on cases that are not true infringement cases.

 

At first blush this may seem unreasonable because why would you sue a case if you didn’t think you have the ability to win the case.

The bottom line is that it’s so expensive to try a case that they almost always get settled. And cases get settled based upon how expensive it is to try the case… not how much the infringement is really worth. Jordan Weissmann an associate editor at The Atlantic recently reported in his recent article Death to Patent Trolls: How a New Bill Could Slay Tech’s Worst Parasites that lawsuits initiated by patent trolls frequently end up in settlement because they target small businesses that cannot afford a long drawn out fight at a trial.

The upshot is that it’s usually cheaper for companies to settle with a troll than take them to trial. And settle they do. According to a study by professors at the University of Texas at Austin and Stanford, about 90 percent of cases brought by trolls — which academics politely refer to as “non-practicing entities” or “patent assertion entities” — end in a deal.

In this era where Democrats and Republicans can’t agree on anything it appears that they can agree on something…Nobody likes patent trolls!

 

Representatives Peter DeFazio (D-OR) and Jason Chaffetz (R-UT) introduced HR 845, the bipartisanSaving High-tech Innovators from Egregious Legal Disputes (SHIELD) .PDF Act to protect American innovators and companies from patent lawsuits by NPE’s.

The SHIELD Act will put the financial burden on so-called “patent trolls” that buy broad patents on products they did not create and then file questionable lawsuits against companies for infringement.

The Shield act provides that if the party bringing an action involving the validity or infringement of a patent is a patent troll and loses the lawsuit they will be responsible to cover the costs of the lawsuit.

How will the court determine if a party is a patent troll?

The party will be considered a patent troll unless they are one of the following entities:

  • a university,
  • the original inventor or assignee of the patent, or
  • a party in the exploitation of the patent through production or sale of the item covered by the patent.

If a party is deemed a patent troll they will be required to post a bond in an amount determined by the court to cover the full costs to any prevailing party asserting invalidity or non-infringement including reasonable attorney’s fees. And believe me the attorneys fees are the big cost in this.

Big litigation patent firms bill upwards of $600 an hour and assign multiple attorneys to each case. And most patent cases get stretched on forever. Having the attorney’s fees hanging over your head by statute is a big risk for any patent troll.

Will the courts follow the statute?

This is a valid question because the act did leave some wiggle room for the courts…the act states that the court will award costs “unless the court finds anexceptional circumstance making award unjust.”

I think as it stands right now most courts are loath to award attorney’s fees and to award attorney fees is the exception not the rule.

Here the legislature is trying to make the rule against one specific type of plaintiff…the purchasers of patent rights who do not intend to produce a product but intend to sue anyone who has a deep pocket and is infringing on that patent right.

I wonder if the Supreme Court would look at something like this as stifling the ability of patent holders to be able to effectively sell their intellectual property.

There certainly is a market for patents as can be seen by the recent attempt by Kodak to save itself from bankruptcy by selling its patent portfolio. If the Shield act was to be signed into law it certainly will be argued that it will diminish the value of patents and patent portfolios.