Monthly Archives: January 2014

Understanding Design Patents: The Basics

While design patents are not as popular as their utility patent peers, they still offer a number of benefits for inventors, particularly when seeking to protect the unique appearance of an item.

In simple terms, a “design patent” protects the way an article looks, as opposed to how it is used or how it works. The specific subject matter of adesign patent application may relate to the configuration or shape of an article, to the surface ornamentation applied to an article, or to the combination of configuration and surface ornamentation.

Unlike a utility patent, a design patent only has one claim. It relies largely upon the drawings to designate what the patent protects. As explained by the U.S. Patent and Trademark Office (USPTO), “As the drawing or photograph constitutes the entire visual disclosure of the claim, it is of utmost importance that the drawing or photograph be clear and complete, that nothing regarding the design sought to be patented is left to conjecture.”

A design patent application must be examined the USPTO and subjected to a prior-art search. Under U.S. patent law, a design patent will be granted to any person who has invented any new, non-obvious, original and ornamental design for an article of manufacture. However, it is important to note that the design patent protects only the appearance of the article and not structural or utilitarian features. Once granted, design patents have a term of 14 years.

Proving infringement of a design patent also differs. The “ordinary observer” test is used to determine whether a design patent has been infringed. As first explained by the Supreme Court in 1871, the primary question is “if, in the eye of an ordinary observer, giving such attention as a purchaser usually gives, two designs are substantially the same, if the resemblance is such as to deceive such an observer, inducing him to purchase one supposing it to be the other, the first one patented is infringed by the other.” The “ordinary observer” is not an expert, but defined as “a purchaser of things of similar design” or “one interested in the subject.”

Stay up-to-date on the latest Intellectual Property Law news from Sheldon Mak & Anderson.

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High-Profile Software Decision Tackles Standard-Essential Patents

Motorola (now owned by Google, Inc.) and Microsoft Corp. are the latest high-tech companies to square off in the so-called “patent wars.” In the lawsuit, Microsoft alleged Motorola tried to excise excessive licensing fees, while Motorola claimed that Microsoft infringed its standard-essential wireless technology patent.

As we previously discussed on this IP Law Blog, standard-essential patents are integral to the tablet and smartphone industry because they form the backbone of the basic technology they need to operate. While most owners of these patents have voluntarily pledged to grant licenses to other companies on “reasonable and nondiscriminatory” (RAND) terms, it is often easier said than done.

In a recent decision, U.S. District Judge James Robart established some useful guidelines for determining reasonable royalties for standard essential patents (SEPs). Since his opinion runs over 207 pages, it is impossible to outline all of them here. However, there are a few key takeaways.

To arrive at “reasonable” royalty, Robart conducted a hypothetical, bilateral negotiation between the parties. In doing so, the judge highlighted the need to consider the importance of the SEPs to the standard as well as the importance of the standard and the SEPs to the products at issue. The specific “economic guideposts” he cited included the following:

  • A RAND royalty should be set at a level consistent with the standard setting organization promoting widespread adoption of their standards.
  • In the context of a dispute concerning whether or not a given royalty is RAND, a proper methodology used to determine a RAND royalty should therefore recognize and seek to mitigate the risk of patent hold-up that RAND commitments are intended to avoid.
  • Likewise, a proper methodology for determining a RAND royalty should address the risk of royalty stacking by considering the aggregate royalties that would apply if other SEP holders made royalty demands of the implementer.
  • To induce the creation of valuable standards, the RAND commitment must guarantee that holders of valuable intellectual property will receive reasonable royalties on that property.
  • From an economic perspective, a RAND commitment should be interpreted to limit a patent holder to a reasonable royalty on the economic value of its patented technology itself, apart from the value associated with incorporation of the patented technology into the standard.

In the end, Robart’s RAND calculations more closely matched those urged by Microsoft. However, the methodology employed was that favored by Motorola. Overall, the case highlights that standard essential patent cases continue to raise challenging issues.

Stay up-to-date on the latest Intellectual Property Law news from Sheldon Mak & Anderson.

New U.K. Orphan Works Law Causes a Stir

The United Kingdom recently approved the Enterprise and Regulatory Act. Among other provisions, it amends how British copyright law treats “orphan works.”

The Enterprise and Regulatory Act defines an orphan work as a copyrighted work for which the copyright owner cannot be found “after a diligent search made in accordance with the regulations.” If the owner cannot be found, the law allows media publications or others to obtain a license to use the image. The copyright license fee is then held should the rights holder come forward.

As Wired reports, many commentators broadly interpreted the law to mean that pictures from popular social media sites like Facebook and Instagram would qualify as orphan works, as it can be difficult the owners’ real name and contact information. The new law caused such a stir that the Intellectual Property Office stepped in to clarify it.

“Owners of photographs posted online will not lose control of their copyright under changes outlined in the Act,” said a spokesperson. “Nor do the changes mean anyone can use a copyright work without permission or free of charge. If someone copies a photo posted online they still need the permission from the rights holder of the photo to do so. If they don’t have this permission they will have to apply for and buy an orphan works license.”

Despite the Intellectual Property Office’s reassurances, critics of the law still contend that it will hurt photographers and other rights holders. They are specifically concerned with the stringency of the due diligence requirement for locating a work’s owners. The specific details of the licensing process are also still being flushed out with stakeholders.

Stay up-to-date on the latest Intellectual Property Law news from Sheldon Mak & Anderson.

“Sunrise” Period for Trademark Owners to Seek New Domains Now Open

The International Corporation for Assigned Names and Numbers (ICANN), the not-for-profit entity which administers top-level domain names, has approved the first wave of generic top-level domains (gTLDs) for release. This triggers a 30-day “Sunrise Period” during which trademark holders can register their marks in the new domains.

A top-level domain name (TLD) is the part of a domain name found to the right of the last dot.  It can be a “generic” TLD such as .com. or .net or a country code such as .uk.

Before 2013, there were only 22 gTLDs.  Now, more than 1000 new gTLDs are expected to be available soon.

The new gTLDs include names designated in Arabic, Chinese, and Russian characters.

In order to take advantage of the Sunrise Period opportunity, trademark holders must register their marks with the Trademark Clearinghouse.

Registration with the Trademark Clearinghouse gives trademark owners the first option to purchase domain names in the new gTLDSs that match their trademarks.  During the Sunrise Period and for 60 days afterward, anyone who attempts to register a domain name for a mark that is already registered with the Trademark Clearinghouse will receive a notice that the mark has already been registered.  If the applicant then proceeds to attempt to register the domain name, the Trademark Clearinghouse will send a notice to the trademark holder.

The system only works with exact matches.  Thus, a trademark owner will not be notified if a mark is only deceptively similar but not identical.

After the Sunrise period, domain names in the new gTLDs will be available for sale to the general public.

  • The Sunrise Period ends January 24, 2014 for the following gTLDs:  .bike, .clothing, .guru, .holdings, .plumbing, .singles, and .ventures.
  • The Sunrise Period closes January 31, 2014 for .camera, .equipment, .estate, .gallery, .graphics, .lighting, and .photography.
  • The Sunrise Period closes February 7, 2014 for .construction, .contractors, .directory, .kitchen, .land, .technology, and .today. 
  • The Sunrise Period ends February 14, 2014 for .diamonds, .enterprise, .tips, and .voyage.

Registration with the Trademark Clearinghouse takes up to 21 days, so it’s advisable for trademark owners to move quickly if they wish to take advantage of the Sunrise Period for any of the above gTLDs.

Stay up-to-date on the latest Intellectual Property Law news from Sheldon Mak & Anderson.

Apple wins “iBook” Lawsuit

Apple Inc. seems to have the market corned when it comes to trademarks that begin with “i.” The company recently prevailed in a trademark infringement lawsuit over the use of the “iBooks” trademark.

A small New York publishing house, Black Tower Press, filed the lawsuit after Apple announced its new online bookstore. Black Tower alleged that Apple’s use of the term in connection with its e-reader platform violated the publisher’s “iBooks” logo, which was acquired from another publishing house.

U.S. District Court Judge Denise Cote disagreed. She first noted that neither Black Tower nor its predecessor registered the trademark. Meanwhile, Apple has held a trademark registration for the term since 1999, when it was used in connection with laptop computers. It obtained further trademark protection to use the term for its e-reader platform in 2010.

Cote further disagreed that Apple’s use of the “iBooks” trademark would lead to customer confusion. “They have offered no evidence that consumers who use Apple’s iBooks software to download ebooks have come to believe that Apple has also entered the publishing business and is the publisher of all of the downloaded books, despite the fact that each book bears the imprint of its actual publisher,” Cote wrote.

Source: Gigaom.com

Stay up-to-date on the latest Intellectual Property Law news from Sheldon Mak & Anderson.

Frito-Lay Loses Food Fight Over IP Infringement

Frito-Lay’s “Tostitos Scoops” tortilla chips may be one of the most convenient ways to eat salsa, but a Texas jury recently found that similarly shaped chips do not infringe the snack company’s patent.

The lawsuit alleged that Medallion Foods Inc., which sells Bowlz chips, violated Frito-Lay’s trade dress and patent rights. Frito-Lay holds a 2003 patent on the process used to make the bowl-shaped tortilla chips. It also holds trade dress rights in the Scoops design and its packaging, the former of which is registered with the U.S. Patent and Trademark Office.

“Frito-Lay has invested significantly in this product and it has enjoyed widespread consumer acceptance and success,” Frito-Lay said in its complaint. “[I]nfringement of Frito-Lay’s intellectual property rights harms Frito-Lay as well as Frito-Lay customers who many be confused and deceived…”

To bolster its claims, Frito-Lay provided color photographs of the two chips, both with scalloped edges. It also noted similarities between the packaging, which are both blue, with black writing on a geometric background, and a square, clear panel in the center.

However, it appears that the jury was not convinced that customers would be confused about the source of the product. It found that Medallion did not dilute or infringe Frito-Lay’s trade dress rights or infringe Frito-Lay’s patent on the process for making the chips.

Source: Reuters

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New Study Shows Trade Secret Theft Is Often an Inside Job

A new study suggests that cyberattacks may not be the greatest threat to the trade secrets of U.S. companies. Rather, many thefts are an inside job.

According to Symantec, its recent survey found that half of employees who left or lost their jobs in the last 12 months walked out the door with confidential business data. Moreover, 40 percent plan to use the information in their new endeavors.

Perhaps most alarming among all of the survey findings—most employees do not believe that using competitive data taken from a previous employer is wrong. In fact, fifty-six percent of employees do not believe it is a crime to use a competitor’s trade secret information.

Below are a few other key findings:

  • Sixty-two percent say it is acceptable to transfer work documents to personal computers, tablets, smartphones or online file sharing applications. The majority never delete the data they’ve moved because they do not see any harm in keeping it.
  • Forty-four percent of employees believe a software developer who develops source code for a company has some ownership in his or her work and inventions, and 42 percent do not think it’s a crime to reuse the source code, without permission, in projects for other companies.
  • Only 38 percent of employees say their manager views data protection as a business priority, and 51 percent think it is acceptable to take corporate data because their company does not strictly enforce policies.

As this survey highlights, employees’ attitudes surrounding trade secrets and other valuable intellectual property often stand in stark contrast to the policies many companies seek to promote. Therefore, it is not only important to have confidentiality policies and non-disclosure agreements in place, but also to make sure that employees understand what they mean.

Stay up-to-date on the latest Intellectual Property Law news from Sheldon Mak & Anderson.