E. Scott Johnson

E. Scott Johnson is a shareholder in Baker Donelson’s Baltimore office. Contact him at sjohnson@bakerdonelson.com.

At its heart the Internet is an information distribution network and the ease with which all manner of information can be shared instantly has led to numerous innovative methods of doing, well, most anything. A hallmark of patents on such methods is that the various steps are carried out by multiple actors as information is passed around the Internet. Often the actors between which the steps of the patented method are divided have only the most tenuous connection with one another. In a case that is reshaping our understanding of what it means to infringe a method patent in the digital age, the Supreme Court reversed the Federal Circuit’s ruling on such divided infringement in Limelight Networks v. Akamai Tech. (more…)

The WSJ Corporate Intelligence blog has an interesting article today that highlights the risks inherent in un-vetted advertising claims.  Apparently Proctor & Gamble took issue with “99% Natural” claim that toothpaste maker Hello Products, LLC was making with respect to its toothpastes which come in unusual flavors (for toothpaste) like pink grapefruit mint and mojito mint. Neither the FDA nor FTC have guidelines for what constitutes “natural” or “all natural” products.  In practice, the FDA takes the position that it will “not object[] to the use of the term if the food does not contain added color, artificial flavors, or synthetic substances,” but you are apparently on your own to determine what exactly is or is not a “synthetic substance.”  Because of the regulatory confusion over the meaning of “natural,” litigation over what does or does not qualify often resorts to claims sounding in state false advertising, unfair trade practices, or consumer protection statutes, or alleging common law fraud or breach of warranty.  Some clarity as to what it means to be natural that we can all agree on (or at least rely on) would be helpful from both the consumer and advertiser perspective, much like the USDA’s National Organic Program that tries to put some meaning into that word as used on food labels.  Apparently, though,  it is difficult from a food science perspective  to define a food product that is natural “because the food has probably been processed and is no longer the product of the earth,” according to the FDA.  That seems to have been part of P&G’s problem as the maker of one of the country’s leading toothpastes, Crest,  asserted that some of the Hello Product’s toothpaste’s ingredients, like fluoride, were chemically processed and thus not “natural.”

For its part, Hello Products offered to change its packaging after it had sold its existing stock but that did not satisfy P&G which filed suit and obtained an injunction to block the sale of the offending toothpaste. The upside for those of you in NYC tomorrow is that Hello Products plans to give away the 100,000 tubes it can no longer sell as free samples on the streets of Manhattan. Grab a tube (I recommend the grapefruit) and remember that FTC truth-in-advertising rules require that:

  1. advertising must be truthful and non-deceptive;
  2. advertisers have evidence to back up their claims; and
  3. advertisements are not unfair.

Jeffrey Gonano of Wexford in western Pennsylvania won the lottery for the 1914 Picasso painting L’Homme au Gibus (Man in the Opera Hat).  Mr. Gonano had purchased one of the 50,000 lottery tickets that had been sold for 100 euros (approximately $137) each.  The lottery was held to benefit two Arts and Cultural Projects in a UNESCO World Heritage city in Lebanon.

However, because the painting is valued at approximately $1 million, the win may come with a tax bill as large as $365,000.  And, unlike a lottery with a cash prize, Mr. Gonano cannot pay the taxes out of the proceeds, unless he decides to sell the painting.  Of course, Mr. Gonano can avoid the tax liability by donating the painting to a charity or museum.  Mr. Gonano is currently exploring his options.

http://www.goerie.com/article/20131223/NEWS06/312239957/Picasso-may-pose-$365000-tax-dilemma-for-raffle-winner

Win a Picasso and Own a Masterpiece!  But Hurry!

UK2This is no joke (although it is extremely awesome!):  A drawing will be held on December 18, 2013 for a Picasso entitled  L’Homme au Gibus (Man in the Opera Hat), completed in 1914.  Here is a copy of the painting:

Tickets cost a mere 100 Euro (approximately $135).  Only 50,000 will be sold.  Proceeds will benefit two Arts and Cultural Projects in a UNESCO World Heritage city in Lebanon.  Tickets can be purchased here: http://www.1picasso100euros.com/?lang=en

Good luck!!

Cariou v. Prince: A victory for appropriation art

The United States Court of Appeals for the Second Circuit reversed a lower court opinion today in the case of Cariou v. Prince and handed another victory to the perhaps surprisingly robust world of contemporary collage artistry and appropriation art generally. 

Left: Patrick Cariou, Photo from Yes Rasta, p. 118; Right: Richard Prince, Graduation
Left: Patrick Cariou, Photo from Yes Rasta, p. 118; Right: Richard Prince, Graduation

The story of the case is relatively straight forward.  In 2000, Patrick Cariou published a book titled Yes Rasta of classical portraits and landscape photographs of Rastafarians that he took over the course of six years while living in Jamaica.  Despite its limited print run, well-known appropriation artist Richard Prince happened across a copy in a bookstore on St. Barth’s in 2005 (more…)

Will Prior Art Block My Patent Application?  Prior Art 101 for §§102 and 103

If you read IP blogs with any regularity you no doubt know that patent reform has come courtesy of the America Invents Act (“AIA”), although the “old” patent law hasn’t really left us and won’t for quite some time.  The most blogged about change brought on by the AIA has undoubtedly been the change from the previous “first-to-invent” system to the current “first inventor to file” system. The AIA accomplished this switch by revising the language of 35 USC §§102 and 103 to redefine what constitutes prior art that can serve as a basis on which to reject an application to patent an invention. Section 102 does the heavy lifting in this regard and the changes to its language are significant. Exactly how significant though is difficult to say in some regards because new statutes come with something of a clean slate in as much as there is no judicial history of interpretation to serve as a lens through which to interpret the language. The “old” §102 has a long history of interpretation by the courts and BPAI and just how clean the slate is on which it was written is itself not clear since there is much similarity between the current and former language. But similarity in form or structure does not necessarily require the same outcome and we lawyers, being what we are, will certainly argue for interpretations beneficial to our clients in the absence of binding precedent from the bench. This post, or more likely a series of posts, will compare the definitions of prior art under the AIA and under the older, first-to-invent regime. (more…)

The Supreme Court recently ruled in the case of Kirtsaeng v. John Wiley & Sons, Inc. (Docket No. 11-697) that the copyright “first-sale” doctrine trumps a copyright holder’s right to control distribution of products embodying copyright protected material. The decision has received a fair amount of attention in the legal sphere but less so in the broader media, which is unfortunate considering how much copyright law impacts the every day lives of everyday people.  The impact of copyright law on our content driven, 24/7 media culture is fairly obvious in many ways, but most people don’t realize that copyright law can be and is used to control the flow of physical goods that don’t fit the traditional copyright paradigm. Recall that the Kirtsaeng decision resolves a question the Supreme Court first considered (but did not definitively decide) in the case Omega S.A. v. Costco Wholesale Corp. in which Omega sought to exclude wristwatches lawfully purchased in Europe from resale in the U.S. by asserting a copyright claim in a design on the back of each watch. Copyright protection is available for (among other things) literary, pictorial and graphical works such as the instruction and training manuals and packaging materials that accompany physical goods. Excluding the copyrighted packaging  has the effect of excluding the packaged product as well.

So how does the Kirtsaeng decision change this? Some background first: Wiley, is of course a publisher of global reach and a more than 200 year history which includes the works of Baltimore favorite Edgar Allan Poe but which more recently focuses on academic, technical and professional publishing including many textbooks.  Wiley publishes considerably less expensive but very similar editions of its textbooks in overseas markets. (more…)

A trademark owner must protect its brand by stopping confusingly similar uses of its trademark whenever possible.  Nike and Under Armour are direct competitors so confusion among sportswear buyers confronted with a knock-off brand is likely. Or, maybe the consumers enjoy the grudge match and aren’t confused. But ignore the threat at your peril. E.Scott Johnson was quoted in the Maryalnd Daily Record: “It’s sort of a clever usage, a derivation, but nevertheless it’s a usage…and if you ignore it when it’s in your face like this, it’s almost like acceptance. It’s kind of a waiver of your trademark rights.” The results of the consumer survey could be intersting. Read more here.

Mexico

Mexico

In June I posted about Columbia’s accession to the Madrid Protocol and noted that Mexico was taking steps to follow suit. Late last month Mexico’s Secretary of Economy deposited documents completing the country’s accession to the Madrid Protocol for the International Registration of Marks with the World Intellectual Property Organization, bringing to 89 the total number of members of the international trademark filing system. The treaty will enter into force in Mexico on February 19, 2013. As regular blog readers know, the Madrid System for the International Registration of Marks offers trademark owners a cost effective, user friendly and streamlined means of protecting and managing their trademark portfolio internationally. Spanish was introduced as a working language of the Madrid system in 2004 and Mexico becomes the fourth Spanish speaking country in the Madrid system. Among the other Spanish speaking nations is Cuba which was the first country in the Latin American region to accede to the system, a step it took in 1995.

New Zealand became the 88th nation to accede to the system in October of this year (effective starting on December 10, 2012) with the curious exclusion that trademark registrants that designate New Zealand via the Madrid Protocol will not have the protection of their marks extended to the tiny island territory of Tokelau (population about 1400) although a domestic New Zealand trademark application does extend to the island. The Philippines joined the system in April bringing to 4 the total number of additions this year to 4.

Is Software Patentable?

We may soon have an answer to that question. By “soon” I mean probably sometime in the next two years. By “answer” I mean we will have the en banc opinion of the Federal Circuit in the case of CLS Bank v. Alice Corp.  Yesterday, the Federal Circuit granted CLS Bank’s petition for rehearing and vacated the panel decision issued by the court in July.  Briefing by the parties and likely by a host of interested third parties will begin immediately but oral arguments will not be scheduled until 2013. Perhaps anticipating the private sector’s broad interest in the issues to be considered, the court waived the usual requirement for third parties to obtain leave of the court before filing an amicus brief and specifically invited the United States Patent and Trademark Office to state its views. In addition to the issues considered by the panel, the full court determined to consider:

a. What test should the court adopt to determine whether a computer-implemented invention is a patent ineligible “abstract idea”; and when, if ever, does the presence of a computer in a claim lend patent eligibility to an otherwise patent-ineligible idea? and

b. In assessing patent eligibility under 35 U.S.C. § 101 of a computer-implemented invention, should it matter whether the invention is claimed as a method, system, or storage medium; and should such claims at times be considered equivalent for § 101 purposes?

At the district court level, Alice Corp. asserted four patents that cover a computerized trading platform for exchanging obligations in which a trusted third party settles obligations between a first and second party so as to eliminate “settlement risk.” The district court granted summary judgment of invalidity based on a finding that the patents claimed ineligible subject matter and Alice appealed.

Reversing the lower court, the Federal Circuit panel majority held that a claim must not be deemed to be directed to patent ineligible subject matter under § 101 if, in view of all of the claim recitations, it is not manifestly evident that the claim is directed to an abstract idea. Alternately stated, Judge Linn wrote that “unless the single most reasonable understanding of the claim is that it is directed to nothing more than a fundamental truth or disembodied concept with no limitations in the claim attaching that idea to a specific application,it is inappropriate to hold that the claim is directed to a patent ineligible “abstract idea” under 35 U.S.C. § 101.”

The majority then applied what was quickly dubbed the “nothing-more-than” standard and, after criticizing the district court for looking “past the details of the claims” to characterize them fundamental concept that are patent ineligible, looked closely at the claims themselves. In doing so, the majority concluded that Alice’s patent claims “appear to cover the practical application of a business concept in a specific way” which requires computer implemented steps that “play a significant part in the performance of the invention.” This, in the eyes of the majority, is enough to clear the apparently low bar set by § 101.  Judge Prost wrote a strong dissent arguing that the majority had improperly ignored Supreme Court precedent providing that limiting the use of a claimed formula to a particular technological environment or adding purely conventional or obvious pre-solution activity was insufficient to render an abstract idea patentable. We will have to wait and see if the full Federal Circuit gives Supreme Court precedent more weight.