Fitch Even News Feed Aug 2018 00:00:00 -0800firmwise Alert: You Can Lose an IPR and Be Unable to Appeal<p>On August 3, in <i><a href="">JTEKT Corp. v. GKN Automotive LTD.</a></i>, the Federal Circuit ruled that the appellant, JTEKT, lacked standing to appeal an <i>inter partes</i> review (IPR) decision because &ldquo;JTEKT has not established at this stage of the development that its product creates a concrete and substantial risk of infringement or will likely lead to claims of infringement.&rdquo; JTEKT, the challenger, is left in the unenviable position of facing estoppel against any future court challenge of the patent, but lacking Article III standing to appeal the adverse decision of the Patent Trial and Appeal Board (PTAB).</p> <p>JTEKT initiated an IPR against a GKN patent in which a subset of claims survived. JTEKT then sought to challenge the surviving claims on appeal to the federal circuit court. At the time of the decision, GKN had not alleged infringement and JTEKT&rsquo;s product was not yet finalized. The record reflected that JTEKT&rsquo;s product will continue to evolve before it is ready for sale.</p> <p>Under 35 U.S.C. &sect; 311(a), any person or entity may petition the Patent Office to institute an IPR. There is no requirement that the petitioner has Article III standing. However, Article III injury-in-fact requirement remains for appealing IPR decisions to district courts. Citing <i>Customer Watchdog v. Wis. Alumni Research Fund,</i> the court stated that &ldquo;typically in order to demonstrate the requisite injury in an IPR appeal, the appellant/petitioner must show that it is engaged or will likely engage &lsquo;in an activity that would give rise to a possible infringement suit&rsquo;. . . or has contractual rights that are affected by a determination of patent validity.&rdquo;</p> <p>The court noted that having no product on the market does not preclude Article III standing and &ldquo;IPR petitioners need not concede infringement to establish standing to appeal.&rdquo; But before appealing from an adverse PTAB decision to an Article III court, the losing petitioner &ldquo;must establish that it has concrete plans for future activity that creates a substantial risk of future infringement or likely cause the patentee to assert a claim of infringement.&rdquo; JTEKT argued that there is potential risk of infringement, but because the product has not been finalized, there is nothing that can be analyzed for infringement. The court concluded that in this case, there is no concrete and substantial risk of infringement or likelihood of claims of infringement.</p> <p>JTEKT also argued that the creation of estoppel based on its participation in the IPR constitutes a separate and independent injury in fact. The court ruled that estoppel does not constitute injury in fact when the appellant is not engaged in any activity that would give rise to a possible infringement suit in the first place.</p> <p>This decision is notable in that JTEKT&rsquo;s preemptive challenge to GKN&rsquo;s patent actually resulted in the creation of estoppel before any infringement is alleged. Petitioners should carefully consider the timing of their IPR filings in view of this ruling.</p> <p>If you have any questions regarding this decision, please contact Fitch Even partner <a href=";A=3766&amp;format=xml&amp;p=5482">Karen J. Wang</a>, author of this alert.</p> <p><b><br /> Fitch Even IP Alert<sup>&reg;</sup></b></p>IP Alerts06 Aug 2018 00:00:00 -0800 Alert: Federal Circuit Gives Guidance on Design Patent Surrender<p>On August 1, in <i><a href="">Advantek Mktg., Inc. v. Shanghai Walk-Long Tools Co.</a></i>, a Federal Circuit panel issued clarification of how surrender of claim scope operates for design patents. Reversing a district court&rsquo;s grant of judgment under Rule 12(c), the court concluded that &ldquo;[r]egardless of whether Advantek surrendered claim scope during prosecution, the accused product falls outside the scope of the purported surrender, contrary to the district court&rsquo;s conclusion.&rdquo;</p> <p>Advantek sued Shanghai Walk-Long Tools (&ldquo;Walk-Long&rdquo;) for design patent infringement of U.S. Pat. No. D715,006 in the Central District of California. In response to the complaint, Walk-Long moved for judgment under Rule 12(c), arguing that prosecution history bars infringement.</p> <p>During prosecution, the examiner issued a restriction requirement as between two different embodiments. The embodiment (below, left) shows a skeletal structure of the gazebo, while the second embodiment (below, right) shows the skeletal structure with the addition of a cover. In response to the restriction requirement, the applicant canceled the second embodiment. After prosecution, the design patent&mdash;directed to the first embodiment&mdash;issued.</p> <p style="text-align: center;"><img src="" alt="" width="300" vspace="0" hspace="0" height="150" border="0" align="absmiddle" /></p> <p>Walk-Long argued in its motion to dismiss that Advantek had &ldquo;intentionally surrendered patent claim scope that would have included gazebos with a cover in response to a restriction requirement, thereby limiting the scope of the &lsquo;006 Patent to gazebos without a cover.&rdquo; Relying on an earlier Federal Circuit decision, <i>Pacific Coast Marine Windshields Ltd. v. Malibu Boats, LLC</i><i><u>,</u></i> the district court agreed, stating that Advantek had surrendered the gazebo with a cover &ldquo;to secure a patent&rdquo; by &ldquo;choosing one of two drawings in response to a restriction requirement.&rdquo;</p> <p>Reproduced below is an image of the accused gazebo, which includes a cover.</p> <p style="text-align: center;"><img src="" alt="" width="150" vspace="0" hspace="0" height="150" border="0" align="absmiddle" /></p> <p>Citing its decision in <i>Pacific Coast</i>, the Federal Circuit held that prosecution history in a design patent case depends on &ldquo;(1) whether there was a surrender; (2) whether it was for reasons of patentability; and (3) whether the accused design is within the scope of the surrender.&rdquo;</p> <p>On appeal, Advantek focused on the third prong of the <i>Pacific Coast </i>test, arguing that the accused design falls outside any claim scope that was purportedly surrendered. More specifically, Advantek argued that the elected embodiment was the skeletal structure and that this design was present in the accused product, with or without a cover.</p> <p>The Federal Circuit agreed with Advantek, finding that the accused product falls outside the scope of any purported surrender. As explained by the Federal Circuit, Advantek elected to patent the gazebo with a particular skeletal structure. A competitor can infringe regardless of extra features that the competitor might add, such as a cover. The case was remanded to the district court for further proceedings.</p> <p>The Federal Circuit additionally acknowledged the Supreme Court case <i><a href=";an=61515&amp;anc=180&amp;format=xml&amp;p=5486">Samsung Electronics Co. v. Apple Inc.</a></i> Although that case concerned patent damages, the Federal Circuit observed that the Court there reaffirmed that a design patent may be only for a component of a product. The Federal Circuit decision includes a footnote adding that if the accused skeletal structure is only a component of an accused multicomponent product, then &ldquo;Advantek would only be able to seek damages based on the value of the component, not the product as a whole.&rdquo;</p> <p>The <i>Advantek </i>decision is relevant for design patent prosecution because restriction requirements are routinely issued in design patent applications. The decision is also relevant for design patent litigation because it provides guidance on prosecution history estoppel as well as the scope of damages available for infringement.</p> <p>If you have questions regarding this ruling, please contact Fitch Even partner <a href=";A=2574&amp;format=xml&amp;p=5482">Jon A. Birmingham</a>, author of this alert.</p> <p><b><sup><br /> </sup></b><em>For more information on recent cases involving design patents, access a recording </em><a href=""><strong>here</strong></a> <em>of the August 2018 Fitch Even webinar</em>, <b><a href=";an=79006&amp;format=xml">Design Patent Enforcement: Recent U.S. Court and PTAB Decisions</a></b>.<br /> <br /> <strong>Fitch Even IP Alert</strong><sup><strong>&reg;</strong></sup></p> <p><b><sup><br /> </sup></b><b><sup><br /> </sup></b></p>IP Alerts03 Aug 2018 00:00:00 -0800 Even Client ContentGuard Wins Favorable Appeal Decision; PTAB Used Wrong Legal Standard to Find CBM Jurisdiction<p>On July 11, 2018, in <i><a href="">Apple Inc., Google LLC v. ContentGuard Holdings, Inc</a></i><i>.,</i> the Federal Circuit agreed with Fitch Even client ContentGuard Holdings that the Patent Trial and Appeal Board (PTAB) applied the wrong legal standard to determine that ContentGuard&rsquo;s U.S. Patent No. 7,774,280 qualified as a covered business method (CBM) patent. As a result, the Federal Circuit vacated the PTAB&rsquo;s decision and remanded the case back to them to reconsider whether the &rsquo;280 patent qualifies under the proper standard.</p> <p>At the PTAB, Apple and Google collectively submitted 35 petitions for <i>inter partes</i> review (IPR) and CBM review of nine patents from ContentGuard&rsquo;s digital rights management portfolio, including the &rsquo;280 patent, which is directed to methods for controlling how digital content may be used by downstream users. ContentGuard successfully knocked out 34 of the 35 petitions at the preliminary stage, including 29 complete denials of institution of trial and five voluntary dismissals. In the remaining CBM review, the PTAB determined that the &rsquo;280 patent qualified as a covered business method (CBM) patent and instituted trial on three of the five challenged claims.</p> <p>Claim 1 of the &rsquo;280 patent recites:</p> <p style="margin-left: 40px;" align="left">1. A computer-implemented method for transferring rights adapted to be associated with items from a rights supplier to a rights consumer, the method comprising:</p> <p style="margin-left: 80px;">obtaining a set of rights associated with an item, the set of rights including a meta-right specifying a right that can be created when the meta-right is exercised, wherein the meta-right is provided in digital form and is enforceable by a repository;</p> <p style="margin-left: 80px;">determining, by a repository, whether the rights consumer is entitled to the right specified by the meta-right; and</p> <p style="margin-left: 80px;">exercising the meta-right to create the right specified by the meta-right if the rights consumer is entitled to the right specified by the meta-right, wherein the created right includes at least one state variable based on the set of rights and used for determining a state of the created right.</p> <p>When determining whether the &rsquo;280 patent was eligible for CBM review, the PTAB focused on the preamble language &ldquo;transferring rights adapted to be associated with items from a <i>rights</i> supplier to a <i>rights</i> consumer&rdquo; (emphasis added), stating it was &ldquo;an activity that, at the very least, is incidental or complementary to a financial activity.&rdquo; The PTAB also relied on portions of the specification that disclose how the transfer of rights &ldquo;may require the payment of a fee or processing by a clearinghouse.&rdquo; The PTAB thus determined that the transfer of rights associated with an item &ldquo;from a supplier to a consumer is, at the very least, incidental or complementary to a financial activity.&rdquo;</p> <p>In the final written decision, the PTAB found three of the challenged claims unpatentable as obvious, but granted ContentGuard&rsquo;s contingent motion to amend, which replaced claim 1 with a substitute claim that explicitly incorporated the district court&rsquo;s construction of a disputed claim term &ldquo;meta-right&rdquo; from the parallel litigation. This claim term had been construed more broadly by the PTAB using the broadest reasonable interpretation standard. The PTAB found the substitute claim valid over the asserted prior art and issued a finding at ContentGuard&rsquo;s request that the substitute claim is substantially identical to the original patent claim within the meaning of 35 U.S.C. &sect; 252, effectively a finding that intervening rights should not apply to the substitute claim. Apple and Google appealed the grant of ContentGuard&rsquo;s motion to amend, and ContentGuard cross-appealed the PTAB&rsquo;s determination that the CBM patent qualified for CBM review in the first instance.</p> <p>Finding that the PTAB applied the incorrect standard, the Federal Circuit reiterated its holding from <i>Unwired Planet v. Google</i>, which issued after the final written decision. <i>Unwired Planet</i> rejected the &ldquo;incidental to or complementary to a financial activity&rdquo; standard and reasoned that it is not enough for CBM jurisdiction that the practice of a patent could involve a potential sale of a good or a service, or that the specification speculates that a potential sale might occur. <i>Unwired Planet </i>further holds that &ldquo;CBM patents are limited to those with claims that are directed to methods and apparatuses of particular types and with particular uses &lsquo;in the practice, administration, or management of a financial product or service.&rsquo;&rdquo; The court reiterated that &ldquo;the mere possiblity that a patent can be used in financial transactions is not enough to make it a CBM patent.&rdquo; The court noted that while the &rsquo;280 patent describes embodiments that use the claimed system to monetize digital works, it also describes embodiments that do not involve financial transactions, such as managing healthcare records. The court instructed that &ldquo;it is not enough for the specification to describe how the invention could, in some instances, be used to facilitate financial transactions.&rdquo;</p> <p>The court vacated the PTAB&rsquo;s decision and remanded the case for the PTAB to assess whether the &rsquo;280 patent is a CBM patent using the proper standard.</p> <p>Fitch Even partners <a href=";A=2601&amp;format=xml&amp;p=5482">Timothy P. Maloney</a> and <a href=";A=2587&amp;format=xml&amp;p=5482">Paul B. Henkelmann</a> represented ContentGuard in the appeal.<br /> <br /> &nbsp;</p>Firm News31 Jul 2018 00:00:00 -0800 Alert: Sue the USPTO? You're <i>Not</i> on the Hook for Their Attorneys' Fees<p>On July 27, in <i><a href="">NantKwest, Inc. v. Iancu</a></i>, the full Federal Circuit held that a party who brings civil action against the USPTO under 35 U.S.C. 145 need not pay the USPTO&rsquo;s attorneys&rsquo; fees as part of the costs of the proceeding after all. <a href=";an=67156&amp;anc=180&amp;format=xml&amp;p=5486">Last year</a>, a panel of Federal Circuit judges had reached the opposite conclusion. Last Friday&rsquo;s en banc decision will, at least for now, restore the conventional understanding of how section 145 operates.</p> <p>The court reasoned that Congress has not expressly overturned the so-called &ldquo;American Rule,&rdquo; which stipulates that each litigant pays its own attorneys&rsquo; fees in promulgating section 145. Congress provided specifically for recovery of attorneys&rsquo; fees and other portions of the Patent Act, but used the term &ldquo;expenses&rdquo; in section 145&mdash;a strong signal that attorneys&rsquo; fees were not contemplated under this statute.</p> <p>The court further found it significant that the USPTO has not attempted to recover attorneys&rsquo; fees for over 170 years under section 145 or its predecessor containing similar language. The court also observed that the USPTO&rsquo;s interpretation of section 145 would require a patent applicant to pay the government&rsquo;s attorneys&rsquo; fees even when the patent applicant succeeded in the 145 proceeding, an apparently unique result in federal law that would not seem to follow from the language of the statute or anything in its legislative history. (Notably, though, even a successful litigant must pay other USPTO expenses.) The court also rejected the USPTO&rsquo;s effort to characterize section 145 actions as a &ldquo;scourge&rdquo; on other patent applicants, finding first that the policy debate on the value of section 145 actions was best left for Congress and second that the cost of these proceedings was miniscule given the overall USPTO budget.</p> <p>The decision was 7&ndash;4 with one judge abstaining. The dissent pointed out that in the 2014 case <i>Shammas v. Focarino</i>, the Fourth Circuit Court of Appeals reached the opposite result in trademark cases. A similar provision of the Lanham Act allows dissatisfied trademark applicants to sue the USPTO, and the <i>Shammas</i> court held that that statute entitled the USPTO to recover its attorneys&rsquo; fees as determined as a portion of the USPTO&rsquo;s employee&rsquo;s salaries allocated to the case. The dissent further concluded that the language of section 145 evinces Congress&rsquo;s &ldquo;specific and explicit&rdquo; intent to depart from the American Rule and to impose upon the applicant payment of all of the expenses of the proceeding, including personnel expenses of the USPTO.</p> <p>Given what appears to be a circuit split on this issue, albeit in different context (patent v. trademark), Supreme Court review would not be surprising. Fitch Even will report on any subsequent developments in this lawsuit in a subsequent alert.</p> <p>For more information, please contact Fitch Even partner <a href=";A=2589&amp;format=xml&amp;p=5482">Allen E. Hoover</a>, author of this alert.<br /> &nbsp;</p> <p><b>Fitch Even IP Alert<sup>&reg;</sup></b></p>IP Alerts30 Jul 2018 00:00:00 -0800 Alert: Interpreting "At Least One of A and B"<p>UPDATE: <em>On August 7, 2018, this case was de-designated as informative by the PTAB. </em></p> <p>On July 10, the Patent Trial and Appeal Board (PTAB) designated five decisions as informative. One of those decisions was <i><a href="">Ex parte Dong-Shin Jung</a></i>, Appeal No. 2016-008290, a decision from March 22, 2017.</p> <p>This decision addressed the question of whether claim language in the form &ldquo;at least one of A and B&rdquo; should be interpreted to read &ldquo;at least one of A or B,&rdquo; or whether it should be interpreted to read &ldquo;at least one of A <i>and</i> at least one of B.&rdquo;</p> <p>Following the Federal Circuit's decision in <i>Superguide Corporation v. DirectTV Enterprises, Inc.</i>, the PTAB concluded that claim language in the form &quot;at least one of A and B&quot; should be interpreted to read &quot;at least one of A and at least one of B.&quot; This decision is significant because it runs contrary to what many practitioners assume would be the correct interpretation of this language and the USPTO&rsquo;s historical preference against using the word &ldquo;or&rdquo; in claims. For example, the USPTO has preferred the word &ldquo;and&rdquo; in Markush groups, even though such groups specify alternatives. The USPTO has softened its view in this regard and generally will allow the use of the word &ldquo;or&rdquo; in claims, and, more recently, the use of &ldquo;and/or.&rdquo;</p> <p>In reaching its conclusion, the PTAB pointed out that &ldquo;although numerous courts have followed <i>Superguide</i>, some courts and administrative bodies at times have distinguished <i>Superguide</i> on the basis that the normal conjunctive meaning of &lsquo;at least one of . . . and&rsquo; does not apply when the patent's claims, specification, or prosecution history necessitate a broader meaning.&rdquo;</p> <p>Here neither the appellants nor the examiner directly addressed the appropriate claim construction, and the PTAB was critical of the examiner for presenting nothing more than a conclusory statement as a basis for deviating from the conjunctive construction preference of <i>Superguide</i>. The reply brief was also silent on this issue.</p> <p>Thus, while the PTAB acknowledged that &ldquo;an Examiner may adopt a different meaning if called for based upon the usual claim construction considerations, including analyzing the specification for any definition or disavowal,&rdquo; the default rule should be to follow the teachings of <i>Superguide</i> and adopt a conjunctive construction. As such, the PTAB indicated the examiner must set forth reasoning for a different meaning, i.e., a disjunctive construction, including citations and explanations of relevant portions of the claims, specification, and prosecution history. Here, in the absence of this supporting analysis, the PTAB found that the claim should be interpreted to be consistent with <i>Superguide</i> and should be given a conjunctive construction.</p> <p>In addition, the PTAB seemed to place particular weight on the fact that the specification never suggested that the claims <i>must</i> be interpreted in a disjunctive fashion, thus placing a high burden on the examiner and on the applicant to overcome the broad presumption that the conjunctive construction applies.</p> <p>In fact, the PTAB went so far as to acknowledge that a conjunctive construction lacked support in the specification and asserted new grounds rejecting the claims for lack of written description. Thus, the PTAB found the lack of support in the specification for the conjunctive construction insufficient to overcome the presumption that the conjunctive construction applies. Specifically, the PTAB stated that a &ldquo;mere example of &lsquo;or&rsquo; in the Specification without more that would compel the disjunctive is insufficient to overcome the ordinary meaning of a claim using the conjunctive &lsquo;and,&rsquo; even if such a claim construction results in the claim being unpatentable for lack of written description.&rdquo;</p> <p>Thus, practitioners may want to take advantage of the USPTO&rsquo;s increasing willingness to use the term &ldquo;or&rdquo; in claims where a disjunctive construction is intended, lest they unwittingly find themselves forced into a &ldquo;catch-22&rdquo; where their claims are construed as conjunctive, and their specification only supports a disjunctive claim construction.</p> <p>The PTAB&rsquo;s decision here is in the context of an <i>ex parte</i> appeal, and as such the PTAB&rsquo;s reasoning may not extend to other contexts such as litigation or after-grant review proceedings in the PTAB.</p> <p>For more information on this ruling, please contact Fitch Even partner <a href=";A=2596&amp;format=xml&amp;p=5482">Thomas F. Lebens</a>, author of this alert.</p> <p>&nbsp;</p> <p><b>Fitch Even IP Alert<sup>&reg;</sup></b></p>IP Alerts25 Jul 2018 00:00:00 -0800 Alert: Native American Tribes Not Immune from <i>Inter Partes</i> Review<p>On July 20, in <i><a href="">Saint Regis Mohawk Tribe v. Mylan Pharmaceuticals Inc. et al.</a>, </i>the Federal Circuit held that tribal sovereign immunity cannot be asserted in an <i>inter partes</i> review (IPR) proceeding.</p> <p>As previously <a href=";an=74878&amp;anc=180&amp;format=xml&amp;p=5486">reported</a>, the Saint Regis Mohawk Tribe became involved in an ongoing patent dispute between Allergan and generic competitors including Mylan Pharmaceuticals when the tribe acquired the patents at issue (directed to Allergan&rsquo;s dry-eye drug Restasis<sup>&reg;</sup>) for a payment of $13.75 million. The tribe licensed the patents back to Allergan for $15 million a year in future royalties, in exchange for the tribe&rsquo;s promise to assert sovereign immunity as a defense to IPRs filed against the patents. The tribe filed a motion to terminate the proceedings, but a panel of the Patent Trial and Appeal Board (PTAB) denied the tribe&rsquo;s motion, finding that tribal sovereign immunity does not apply to IPRs. The tribe appealed.</p> <p>The Federal Circuit affirmed. The court reasoned that under applicable Supreme Court precedent, IPRs are not similar enough to civil litigation that tribal sovereign immunity from suit should apply. In particular, the court determined that an IPR proceeding is more like an agency enforcement action where immunity does not apply. For example, the USPTO Director acts as a gatekeeper with complete discretion whether to institute trial on an IPR petition, and the PTAB has the authority to proceed in the absence of the parties in some instances. In summary, the court found that &ldquo;the USPTO is acting as the United States in its role as a superior sovereign to reconsider a prior administrative grant and protect the public interest in keeping patent monopolies &lsquo;within their legitimate scope.&rsquo;&rdquo; Thus, the court affirmed the PTAB&rsquo;s denial of the tribe&rsquo;s motion to terminate.</p> <p>Although the court expressly noted that it was not deciding whether state sovereign immunity should apply to IPRs, nothing in its reasoning was based on any unique characteristic of tribal sovereign immunity or a difference between tribal and state sovereign immunity. Notably, the PTAB has decided in prior decisions that state universities may assert sovereign immunity from IPR proceedings. This decision raises questions regarding the continuing viability of the state sovereign immunity defense in IPRs.</p> <p>We expect the tribe to seek en banc review or Supreme Court review and will report back with any further developments. In the meantime, for more information on this ruling, please contact Fitch Even partner <a href=";A=2587&amp;format=xml&amp;p=5482">Paul B. Henkelmann</a>, author of this alert.</p> <p>&nbsp;</p> <p><b>Fitch Even IP Alert</b><sup><b>&reg;</b></sup></p>IP Alerts24 Jul 2018 00:00:00 -0800 Alert: PTAB Cautioned Not to Deviate from Grounds Raised in Petition<p>On June 19, in <i><a href="">Sirona Dental Systems GMBH v. Institut Straumann AG</a>, </i>the Federal Circuit stated that the Supreme Court&rsquo;s <i>SAS Institute Inc. v. Iancu </i>decision requires that an <i>inter partes</i> review must proceed &ldquo;in accordance with or in conformance to the petition.&rdquo; The court cautioned the Patent Trial and Appeal Board (PTAB) not to substitute its own reasoning for the grounds raised by the petitioner, explaining that &ldquo;nothing suggests the Director enjoys a license to depart from the petition and institute a <i>different</i> inter partes review of his own design.&rdquo;</p> <p>Institut Strauman and Dental Wings filed a petition for <i>inter partes</i> review of a patent based on multiple grounds of unpatentability. The PTAB instituted review based on some of the asserted grounds. Eventually the PTAB issued a final written decision that found all of the claims unpatentable as obvious. Contending that one of those grounds was not raised in the petition, but initiated by the PTAB, Sirona appealed.</p> <p>The court disagreed with Sirona and held that the PTAB had indeed rested its obviousness conclusion on grounds that the petitioner had raised, not substituting its own judgment. In dicta, however, the court stated:</p> <p style="margin-left: 40px;">An inter partes review must proceed &quot;in accordance with or in conformance to the petition.&quot; <i>SAS Inst., Inc. v. Iancu</i>, 138 S. Ct. 1348, 1356 (2018) (internal quotations omitted). &quot;Nothing suggests the Director enjoys a license to depart from the petition and institute a <i>different</i> inter partes review of his own design.&quot; <i>Id.</i> (emphasis in original). &quot;The rest of the statute confirms, too, that the petitioner's petition, not the Director's discretion, is supposed to guide the life of the litigation.&quot; <i>Id.</i> &quot;[T]he statute tells us that the petitioner's contentions, not the Director's discretion, define the scope of the litigation all the way from institution through to conclusion.&quot; <i>Id.</i> at 1357. It would thus not be proper for the Board to deviate from the grounds in the petition and raise its own obviousness theory, as Sirona contends.</p> <p>This language possibly signals future holdings along these lines by the court on appropriate facts.</p> <p>Sirona also argued that the PTAB erred when it denied Sirona&rsquo;s contingent motion to amend, arguing that the PTAB improperly placed the burden on Sirona to prove that the proposed substitute claims were patentable. The court vacated the PTAB&rsquo;s order in light of <i><a href=";an=69165&amp;anc=180&amp;format=xml&amp;p=5486">Aqua Products, Inc. v. Matal</a></i>, which held that the petitioner bears the burden of proving that proposed amended claims are unpatentable<i>.</i></p> <p>This decision may be significant for patent owners, since it states that the PTAB must only consider the grounds for unpatentability that are raised in the petition.</p> <p>For more information on this ruling, please contact Fitch Even partner <a href=";A=2596&amp;format=xml&amp;p=5482">Thomas F. Lebens</a>, author of this alert.</p> <p><i>Fitch Even summer associate Zachary Van Engen contributed to this alert.</i></p> <p>&nbsp;</p> <p><b>Fitch Even IP Alert<sup>&reg;</sup></b></p>IP Alerts19 Jul 2018 00:00:00 -0800 Patent Enforcement: Recent U.S. Court and PTAB Decisions join Fitch, Even, Tabin &amp; Flannery LLP for a free webinar, &ldquo;Design Patent Enforcement: Recent U.S. Court and PTAB Decisions,&rdquo; on Thursday, August 2, 2018, at 9:00 am PDT / 10:00 am MDT / 11:00 am CDT / 12 noon EDT. <br /> <br /> This webinar will address current issues in U.S. patent law relating to infringement of design patents, including cases that involve damages, such as <em>Samsung v. Apple</em>. Understanding the latest developments in design patent litigation is essential to developing enforcement or defense strategies, as well as to preparing and prosecuting strong design patent applications. <br /> <br /> In addition, just as with utility patents, the validity of design patents can be challenged by requesting an <em>inter partes</em> review (IPR) before the Patent Trial and Appeal Board (PTAB). We&rsquo;ll discuss the outcomes of recent IPR proceedings that involve design patents and what strategies can be learned from those proceedings. <br /> <br /> Our speaker will be Fitch Even partner <a href=";A=2574&amp;format=xml&amp;p=5482">Jon A. Birmingham</a>. Jon represents a wide range of clients in intellectual property litigation, opinion matters, and complex patent prosecution matters, including the procurement and enforcement of design patents. <br /> <br /> A recording of this webinar is available through August 1, 2019.<br /> <br type="_moz" />Past Webinars18 Jul 2018 00:00:00 -0800 Even Chicago Office Space Featured in <i>Chicago Lawyer</i> Magazine<p>An article showcasing Fitch Even&rsquo;s new Chicago office space was published in the July 2018 issue of <i><a href="">Chicago Lawyer</a></i> magazine. The piece, titled &ldquo;The Paper Chase,&rdquo; features an interview with managing partner <a href=";A=2588&amp;format=xml&amp;p=5482">Mark W. Hetzler</a>, who explains the strategy and objectives behind the design of the new space, which included Fitch Even&rsquo;s move to a paperless environment.</p> <p>Creating a more modern, inviting workspace was also key, with a clean open-space plan, attractive gathering areas, sleek and highly functional furniture, and plenty of natural light throughout topping the list. Those enhancements and others resulted in an environment that better supports the firm&rsquo;s longtime emphasis on the team collaboration and streamlined operations essential to optimal client service.</p> <p>Read more about Fitch Even's Chicago office and see accompanying photos in the article <a href="/2E8FB4/assets/files/Documents/Chicago_Lawyer_Spaces_reprint_July_2018.pdf" target="_blank">here</a>. </p>Firm News10 Jul 2018 00:00:00 -0800 Alert: Grumpy Cat Not Amused by Grumpy Beverages<p>A recent case from the U.S. District Court for the Central District of California involved Grumpy Cat, a pet cat with a grumpy appearance (not demeanor) who is popular on social media, and the brand the cat has come to represent. The case, <i><a href="/2E8FB4/assets/files/Documents/Grumpy Cat Limited v. Grenade Beverage LLC.pdf">Grumpy Cat Limited v. Grenade Beverage LLC, et al.</a>,</i> illustrates the importance of ensuring that license agreement terms permit the activities that the licensee wants to undertake.</p> <p>In 2013, defendant Grenade Beverage LLC and its principals, Nick and Paul Sandford (collectively &ldquo;Grenade&rdquo;), licensed the exclusive right to use on certain beverage products the Grumpy Cat trademark and copyrighted images from Grumpy Cat Limited, the company formed by Tabatha Bundesen, the famous feline's owner, and her brother Bryan Bundesen. Grenade&rsquo;s license authorized it to use the Grumpy Cat trademark and copyrighted images with the manufacture, advertisement, merchandising, promotion, distribution, and sale of iced-coffee products. The license agreement terms stated that additional products would only become part of the license upon prior approval. A jury in an earlier phase of the case determined that Grenade&rsquo;s license authorized the use of the Grumpy Cat trademark and copyrighted images only with iced coffee.</p> <p>Under the license, Grenade created a line of iced-coffee products branded &ldquo;Grumpy Cat Grumppucino&rdquo; and featured a caricature of Grumpy Cat on the products. Subsequently, in 2015, Grenade and its sublicensee Grumpy Beverage LLC wanted to sell ground coffee featuring the Grumpy Cat trademark and likeness and sought the approval of Grumpy Cat Limited. Being persnickety, as felines are known to be, Grumpy Cat Limited declined approval for the ground-coffee products. Grenade scampered off and produced and sold the Grumpy Cat ground-coffee products anyway. Grumpy Cat Limited pounced, suing Grenade for trademark and copyright infringement over the unauthorized use of its intellectual property. The jury found for Grumpy Cat Limited and awarded it more than $700,000 in damages for the unauthorized use of the Grumpy Cat trademark and images on the ground coffee.</p> <p>Following the trial, the court decided Grenade&rsquo;s declaratory judgment counterclaim for non-infringement of the Grumpy Cat trademark and copyrights. Grenade unsuccessfully argued that the term in the license agreement requiring prior approval for use of the licensed marks on additional products was a covenant and not a condition of the license agreement. The relevant portion of the license agreement stated that &ldquo;other additional products within the Product Category [non-alcoholic beverages] . . . may, upon the Parties&rsquo; mutual approval, be marketed hereunder.&rdquo; Grenade sought the interpretation of this provision as a covenant to avoid liability for infringement of Grumpy Cat Limited&rsquo;s trademark and copyrights. After reviewing the license agreement, the court determined that the &ldquo;additional products&rdquo; language in the agreement is a condition that specifically excludes Grenade from using the licensed mark and images on additional products without the mutual approval of the parties. The court swatted down Grenade&rsquo;s claim for declaratory relief.&nbsp;</p> <p>The court also decided Grumpy Cat Limited&rsquo;s claim for cybersquatting following the trial.&nbsp;During the license, Grenade came to own from a third party the domain name &quot;,&quot; which they used to redirect internet traffic to their coffee products. Grenade offered to transfer this domain name to Grumpy Cat Limited in exchange for Grumpy Cat Limited granting approval to Grenade&rsquo;s expanding use of the Grumpy Cat mark and images to ground-coffee products. Grumpy Cat Limited declined. As part of its complaint, Grumpy Cat Limited included a count for cybersquatting.</p> <p>To win on cybersquatting, Grumpy Cat Limited needed to prove that (1) Grenade registered, trafficked in, or used the domain name; (2) the domain name is identical or confusingly similar to a protected mark owned by Grumpy Cat Limited; and (3) Grenade acted with bad faith intent to profit from its use of the domain name. Grumpy Cat Limited claimed that the Grenade had used the domain name registration to redirect consumers from Grumpy Cat to the branded coffee products and as leverage during its efforts to get permission to use the Grumpy Cat mark and images on the ground coffee products.</p> <p>The court declined to find bad faith intent on the part of Grenade. Grenade had reasonable grounds under the circumstances (i.e., being licensed to use mark to sell branded coffee products) to believe that the use of the website was lawful. The court also found that Grenade did not use the domain name as leverage for ransom to get money. Instead, Grenade&rsquo;s offer to sell the domain name in exchange for modifications to the license agreement was part of a business negotiation. The court held that Grumpy Cat Limited did not show that Grenade acted in bad faith and denied its cybersquatting claim. At present Grumpy Cat is on the prowl to claw back the attorneys&rsquo; fees her owner spent prosecuting the case and defending against Grenade&rsquo;s counterclaim.&nbsp;&nbsp;&nbsp;</p> <p>To avoid experiencing the grumpiness the defendants did in this case&mdash;and worse, paying damages for infringement&mdash;a licensee must carefully review and negotiate the terms of license agreements to make certain that the licensee receives the permissions desired for the products and services that it intends to offer under the licensed brand. The licensee should also try to obtain limitations on a licensor&rsquo;s approval of new products, such as specifying time frames for approval and not unreasonably withholding approval. In addition to any accountings required by the license terms, a licensee should also audit its activities periodically under license agreements to make sure that they continue to comply with the license terms. When a licensee wants to expand use of the licensed mark to new and different products, the licensee should follow any notice provisions and instructions in the agreement for seeking the prior permission of the licensor to expand use of the licensed mark. If the brand owner declines to grant permission, then the licensee should not use the licensed mark on unlicensed products; doing so risks willful infringement liability and damages.&nbsp;</p> <p>Licensors should carefully identify the licensed properties and clearly define the scope of licensed products and services in their license agreements. Clearly defined licensed products and services help prevent ambiguities about what defined terms in the agreement mean. Licensors should also consider provisions restricting whether and how a licensee may use licensed marks online, including as domain names and on social media sites. If a licensor permits a licensee to register and own domain names that include the licensed mark, then the licensor should include provisions that facilitate the transfer of those domain names to licensor upon termination or expiration of the license.&nbsp; &nbsp;</p> <p>Please contact Fitch Even partner <a href=";A=2617&amp;format=xml&amp;p=5482">Alisa C. Simmons</a> with any grumpy comments concerning this case.<br /> &nbsp;</p> <p><b>Fitch Even IP Alert<sup>&reg;</sup></b></p>IP Alerts04 Jul 2018 00:00:00 -0800