Decisions in Brief

Decisions in Brief

John C. Gatz

©2014. Published in Landslide, Vol. 7, No. 1, September/October 2014, by the American Bar Association. Reproduced with permission. All rights reserved. This information or any portion thereof may not be copied or disseminated in any form or by any means or stored in an electronic database or retrieval system without the express written consent of the American Bar Association or the copyright holder.

COPYRIGHTS

Federal Circuit Finds Flaws in District Court’s Copyrightability Analysis in Java Dispute

Oracle Am., Inc. v. Google Inc., 2014 WL 1855277 (Fed. Cir. 2014). While developing its Android operating system, Google used code found in application programming interfaces (APIs) specific to the Java platform. Oracle, the owner of copyrights in Java components, including the APIs, sued Google for copyright infringement. The district court ruled that the Java APIs were not copyrightable, in part because the court found it essentially necessary for Google to have copied the code to allow interoperability of applications on different mobile phones.

The Federal Circuit determined that the district court improperly evaluated the copyrightability of the Java APIs and had improperly intermingled principles in the areas of copyrightability, fair use, and infringement. The Federal Circuit rejected the district court’s ruling on the merger doctrine, in part because the district court appeared to focus its analysis on the time of Google’s copying of the APIs, rather than the APIs’ creation. Additionally, Google argued that interoperability requirements forced them to use Oracle’s Java code, and the district court applied this interoperability argument to its decision on copyrightability. The Federal Circuit, though, determined that the question of interoperability was germane to fair use and not to copyrightability.

Take it to the Bank—Permanent Injunction Issued to Stop Software Copyright Infringement

Complex Systems, Inc. v. ABN Amro Bank, N.V., 110 U.S.P.Q.2d 1762 (S.D.N.Y. 2014). CSI sued ABN for copyright infringement of CSI’s BankTrade software. ABN had previously licensed BankTrade from CSI, but sold the entity that held the license as part of a transaction to sell to LaSalle Bank to Bank of America. ABN continued to use this software, but ABN was not able to reach a licensing agreement with CSI concerning use of BankTrade. CSI sued ABN for copyright infringement, and was granted summary judgment that ABN infringed the CSI copyright in BankTrade. CSI filed a motion seeking a permanent injunction. The district court granted CSI a permanent injunction barring ABN from using BankTrade. 

The district court performed a traditional injunctive relief analysis and began by evaluating whether CSI would suffer irreparable harm. The court found CSI suffered irreparable harm based on ABN offering trade finance products that are directly competitive to CSI and determined that since damages to CSI are nearly impossible to quantify, legal remedies were insufficient. The balance of hardships also favored CSI, since granting ABN a perpetual license would destroy CSI’s main business (licensing BankTrade) while ABN is only prevented from using a product it has no legal right to utilize. Finally, the public interest favored CSI, as a decision in ABN’s favor would flood the courts with licensing disputes. The court determined that a permanent injunction preventing ABN from using CSI’s BankTrade software was an appropriate remedy and ordered ABN to stop using BankTrade software in all operations within one year. ABM was also enjoined from using BankTrade software on any new transactions within 60 days of the order.

Use of Edited Videos for Criticism is Fair

Caner v. Autry, 110 U.S.P.Q.2d 1819 (W.D. Va. 2014). Plaintiff Caner grew up in a household with a father who was a devout Muslim and highly involved in the Islamic Community in Ohio. After his parents divorced, Caner began attending church and became a born-again Christian. Caner wrote a popular book after the terrorist attacks on September 11, 2001, and in 2005 was hired by Jerry Fallwell as dean of the Liberty Theological Seminary. Defendant Autry was a supporter of Dean Caner while he was a student at the seminary. Eventually, Autry felt that Caner was a detriment to the Christian religion, and joined the critics of Caner by posting two videos on Youtube® to contest Caner’s statements in speeches about his background, namely that Caner grew up in Turkey and trained in jihad.

Caner, arguing that he had copyright protection on the posted videos, sued for copyright infringement. In the context of a motion for summary judgment, the district court addressed Autry’s fair use defense. The district court found that the purpose and character of the use was for criticism, and he transformed the video to expose contradictions and dishonesty in the testimony of a well-known evangelist and seminary dean. The other factors did not outweigh the purpose and nature of the use, especially since this transformative use renders market substitution less likely and market harm more difficult to infer. The district court therefore granted Autry’s motion for summary judgment.

PATENTS

Attorney Fees

Octane Fitness, LLC v. ICON Health & Fitness, Inc., 134 S. Ct. 1749, 110 U.S.P.Q.2d 1337 (U.S. 2014). The Supreme Court found that the framework established by the Federal Circuit in Brooks Furniture is unduly rigid, and it impermissibly encumbers the statutory grant of discretion to district courts. Section 285 states, in exceptional cases, the court may award reasonable attorney fees to the prevailing party. An exceptional case is simply one that stands out from others with respect to the substantive strength of a party’s litigating position (considering both the governing law and the facts) or the unreasonable manner in which the case was litigated. District courts may determine whether a case is exceptional in their discretion, considering the totality of the circumstances. The prior standard is too rigid and renders Section 285 superfluous.

Highmark Inc. v. Allcare Health Mgmt. Sys., Inc., 134 S. Ct. 1744, 110 U.S.P.Q.2d 1343 (U.S. 2014). The holding in Octane Fitness, LLC v. ICON Health & Fitness, Inc. covers this case as well.

Claim/Issue Preclusion

Brain Life, LLC v. Elekta Inc., 746 F.3d 1045, 110 U.S.P.Q.2d 1089 (Fed. Cir. 2014). Applying Ninth Circuit summary judgment law, the Federal Circuit vacated the district court’s decision to bar Brain Life’s infringement claims based on res judicata grounds. Claim preclusion did not apply because the alleged infringement occurred after entry of a final judgment in an earlier suit. Similarly, issue preclusion did not apply because the product in the present case was never an issue in the earlier suit. Nonetheless, the Federal Circuit affirmed that most of Brain Life’s claims were still precluded. Under Kessler v. Eldred, 206 U.S. 285 (1907), Brain Life was precluded from asserting any claims against Elekta for products that were essentially the same as versions deemed non-infringing in an earlier suit. The earlier suit was brought by Brain Life’s predecessor-in-interest. However, one of Elekta’s products was not accused in the previous suit and, thus, the Kessler doctrine did not apply, and the case was reversed and remanded.

Claim Construction

Braintree Labs., Inc. v. Novel Labs., Inc., 749 F.3d 1349, 110 U.S.P.Q.2d 1525 (Fed. Cir. 2014). The Federal Circuit affirmed in part, reversed in part, vacated in part, and remanded the district court’s decision. The Federal Circuit found that the district court erred by not following the patentee’s lexicography as governing the claim construction, and thus reversed and provided a new claim construction. As a result of the new construction, the Federal Circuit found a genuine dispute as to whether the accused product met the claim limitation. The Federal Circuit thus vacated the district court’s grant of summary judgment of infringement and remanded to the district court. The Federal Circuit also affirmed the district court’s findings that the asserted claims were not anticipated, not obvious, and not indefinite.

elcommerce.com, Inc. v. SAP AG, 745 F.3d 490, 110 U.S.P.Q.2d 1018 (Fed. Cir. 2014). The Federal Circuit affirmed in part, vacated in part, and remanded the district court’s summary judgment that the method claims were not infringed and the system claims were invalid as being indefinite. The Federal Circuit affirmed the transfer of the case to the Pennsylvania district, since there cannot be appellate review if there is not jurisdiction at the district court level. The Federal Circuit affirmed the district court’s construction of various terms in the method claims, and, based upon these constructions, affirmed the district court’s finding of noninfringement. The Federal Circuit found that the district court erred in finding the system claims invalid under Section 112.

Shire Dev., LLC v. Watson Pharm., Inc., 746 F.3d 1326, 110 U.S.P.Q.2d 1244 (Fed. Cir. 2014). The Federal Circuit reversed the district court’s claim constructions and subsequent finding of infringement, and remanded for further proceedings. The Federal Circuit reviewed the intrinsic evidence as a whole and concluded that the district court’s claim construction was overly broad.

Vederi, LLC v. Google, Inc., 744 F.3d 1376, 110 U.S.P.Q.2d 1001 (Fed. Cir. 2014). The Federal Circuit reversed the district court’s claim construction. The Federal Circuit determined that the district court erred in construing the phrase “the views being substantially elevations of the objects” as vertical flat depictions of front or side view. The district court improperly relied on extrinsic evidence, without considering the intrinsic evidence. This led to the district court improperly reading “substantially” out of the claims and not fully considering the specification, which described embodiments contrary to its claim construction and which did not include any disavowal of curved images for the disputed claim language.

Contempt

Energy Recovery, Inc. v. Hauge, 745 F.3d 1353, 110 U.S.P.Q.2d 1083 (Fed. Cir. 2014). The Federal Circuit reversed the district court’s contempt finding and vacated a permanent injunction. At issue was whether the alleged contemnor by its conduct violated the terms of the decree, and had at least constructive knowledge of such violations. The Federal Circuit found that the alleged contemnor did not violate any terms. Nothing in the order precluded the defendant from using any manufacturing process. The plaintiff did not allege that the new product infringes any patents assigned to the plaintiff by the defendant. Therefore, there is no ground for contempt.

Claim Preclusion/Reexamination

Senju Pharm. Co. v. Apotex, Inc., 746 F.3d 1344, 110 U.S.P.Q.2d 1261 (Fed. Cir. 2014). The Federal Circuit affirmed the district court’s ruling that a patentee was barred under the doctrine of claim preclusion from asserting reexamined patent claims in an asserted patent from an infringement lawsuit against the same defendant prior to the reexamination. The primary issue on appeal was whether the second lawsuit involved the same cause of action as the first. The Federal Circuit noted that an important question during a claim preclusion analysis is to determine whether the accused product or process in the first lawsuit is “essentially the same” as the accused product or process in the second lawsuit. If they are essentially the same, and all other requirements are met, then claim preclusion may apply. Another important inquiry is whether the “same patent rights” are at issue in both suits. Here, the infringement allegations focused on the same ANDA application, so the first factor supported a finding that claim preclusion applies. Regarding the second question of whether the same patent rights were at issue, the Federal Circuit concluded that they were. Although the second lawsuit involved a reexamined patent (and, specifically, newly issued and amended claims from that reexamined patent), the Federal Circuit concluded that the reexamined claims still created the same cause of action. Specifically, the Federal Circuit held “a reexamined patent claim cannot contain within its scope any product or process which would not have infringed the original claims.”

Declaratory Judgment

Microsoft Corp. v. DataTern, Inc., 747 F.3d 1370, 110 U.S.P.Q.2d 1411 (Fed. Cir. 2014). The Federal Circuit held that the district court had jurisdiction over both alleged infringers declaratory judgment challenges to one patent and over an alleged infringer’s challenge to another patent, but not the other alleged infringer. The Federal Circuit also affirmed the grant of summary judgment to one alleged infringer with regard to a patent, and affirmed in part and reversed in part the grant of summary judgment to the other alleged infringer. Regarding jurisdiction in declaratory judgment actions, the threshold question is whether the facts alleged, under all the circumstances, show that there is a substantial controversy, between parties having adverse legal interests, of sufficient immediacy and reality to warrant the issuance of a declaratory judgment. To the extent that the appellees argue that they have a right to bring the declaratory judgment action solely because their customers have been sued for direct infringement, they are incorrect. The Federal Circuit also did not agree that a suit against a customer automatically gives rise to a case or controversy regarding induced infringement. The Federal Circuit found that the evidence supported jurisdiction in some of the declaratory actions. The Federal Circuit then evaluated the summary judgment motions.

Definiteness

Chi. Bd. Options Exchange, Inc. v. Int’l Sec. Exchange, LLC, 748 F.3d 1134, 110 U.S.P.Q.2d 1451 (Fed. Cir. 2014). The Federal Circuit affirmed the district court’s determination of noninfringement and further reversed the finding that one of the dependent claims was indefinite. The disclosed algorithm for matching on a pro rata basis was deemed sufficient description to maintain the validity of claim 2 under 35 U.S.C. § 112, ¶ 2. The specification disclosure of pro rata allocating did not detract from the disclosure of pro rata matching such that the dependent claim reciting, “means for matching the remaining portion with professional orders or quotations in the book memory means on a pro rata basis,” would be indefinite.

Design Patent Invalidity

MRC Innovations, Inc. v. Hunter Mfg., LLP, 747 F.3d 1326, 110 U.S.P.Q.2d 1235 (Fed. Cir. 2014). The Federal Circuit affirmed the district court’s grant of summary judgment of invalidity with respect to MRC’s design patents. The Federal Circuit found that the district court did not err by finding that the patented design created basically the same overall visual impression as prior art designs having similar shape, fabric, and stitching. The Federal Circuit further found that secondary references were sufficient to compare to the primary reference such that a skilled designer would have been motivated to combine the primary and secondary references to reach the designs in the patents, and therefore the design patents were obvious.

Double Patenting

Gilead Scis., Inc. v. Natco Pharma Ltd., 110 U.S.P.Q.2d 1551 (Fed. Cir. 2014). The Federal Circuit vacated the district court’s judgment of infringement and remanded for further proceedings. The Federal Circuit held that because the obviousness-type double patenting doctrine prohibits the inventor from extending his right to exclude through claims in a later-expiring patent that are not patentably distinct from the claims of the inventor’s earlier-expiring patent, the later-expiring patent properly qualifies as a double patenting reference for the earlier-expiring patent. The district court infringement verdict was therefore improper, and the Federal Circuit reversed and remanded.

Implied License

Endo Pharm. Inc. v. Actavis, Inc., 746 F.3d 1371, 110 U.S.P.Q.2d 1199 (Fed. Cir. 2014). The Federal Circuit vacated the district court’s denials of Endo’s motions for preliminary injunction and remanded for further proceedings. The Federal Circuit held that Actavis did not have an express license to practice any of the patents asserted, as the license referenced to only continuations, continuations-in-part or divisionals, which did not include the asserted patents. The Federal Circuit also rejected Actavis’ argument that it had an implied license, as Actavas had agreed to licenses that did not cover the patents in the appeal. You get what you bargain for, and Actavis had not bargained for the asserted patents.

Infringement

Alcon Research Ltd. v. Barr Labs., Inc., 745 F.3d 1180, 110 U.S.P.Q.2d 1008 (Fed. Cir. 2014). The Federal Circuit affirmed in part and reversed in part the district court’s findings of noninfringement and invalidity for lack of enablement and written description. Regarding infringement, an infringement inquiry provoked by an ANDA filing under the Hatch-Waxman system focuses on a comparison of the asserted patent against the product that is likely to be sold following ANDA approval. The district court found, and the parties do not dispute on appeal, that the composition of the generic product proposed in the alleged infringer’s ANDA was significantly different from the tested compositions used by the patentee to show infringement. Turning to enablement, a challenger must show by clear and convincing evidence that a person of ordinary skill in the art would not be able to practice the claimed invention without undue experimentation. The Federal Circuit found the alleged infringer failed to make the threshold showing that any experimentation was necessary.

Jurisdiction

Microsoft Corp. v. DataTern, Inc., 110 U.S.P.Q.2d 1561 (Fed. Cir. 2014). The Federal Circuit affirmed in part and reversed in part the district court’s grant of summary judgment that certain Microsoft and SAP products did not infringe the asserted claims of two patents, the scope of the court’s summary judgment grant to SAP, and the court’s denial of DataTern’s motion to dismiss Microsoft’s and SAP’s declaratory judgment actions for lack of subject matter jurisdiction. Under the totality of the circumstances, the Federal Circuit held that the district court possessed declaratory judgment jurisdiction over the two patents with respect to SAP and over one of the two patents with respect to Microsoft. The Federal Circuit affirmed the summary judgment of Microsoft’s and SAP’s noninfringement because DataTern stipulated that SAP did not infringe based on the proper claim construction. The Federal Circuit further remanded to the district court to modify the summary judgment order to cover only one product.

Appeal Reexamination Jurisdiction/Obviousness

In re Teles AG Informationstechnologien, 747 F.3d 1357, 110 U.S.P.Q.2d 1310 (Fed. Cir. 2014). The Federal Circuit accepted, from the U.S. District Court for the District of Columbia, transfer of the patentee’s appeal, pursuant to 35 U.S.C. § 145, of the Board’s affirmance of the examiner’s obviousness rejection of claim 35 during ex parte reexamination. The Federal Circuit affirmed the Board’s decision. The district court found, and the Federal Circuit affirmed, that the district court lacked subject matter jurisdiction over the patentee’s appeal. The district court erred in dismissing the case and instead should have transferred the case to the Federal Circuit. However, because the district court attempted to affect such a transfer after the dismissal, the Federal Circuit elected to treat the case as having been transferred to it. The Federal Circuit affirmed the Board’s rejection of the claim as obvious in view of a combination of two prior art references that disclosed all of the claim elements and revealed a motivation to combine them.

Obviousness

Hoffman-La Roche Inc. v. Apotex Inc., 748 F.3d 1326, 110 U.S.P.Q.2d 1494 (Fed. Cir. 2014). The Federal Circuit affirmed the summary judgment finding of invalidity due to obviousness. The method claims are directed to selecting a once monthly oral dosing regimen of ibandronate to treat osteoporosis and to set that dose at 150 mg. Roche attempted to discount the prior art by looking at the efficacy of the taught dosing over a one month period. However, arguments directed to the efficacy of prior art are not sufficient to overcome invalidity because all that is required is a reasonable expectation of success, not conclusive proof of efficacy. Roche also unsuccessfully raised arguments related to the safety of the prior art doses of 150 mg and the effectiveness of this monthly dose. The evidence, however, did not undercut the showing that there was a reasonable expectation of success with the 150 mg monthly dose.

Preliminary Injunction

Trebro Mfg., Inc. v. FireFly Equip., LLC, 748 F.3d 1159, 110 U.S.P.Q.2d 1429 (Fed. Cir. 2014). In response to an interlocutory appeal, the Federal Circuit vacated an order denying a preliminary injunction. Holding that the district court abused its discretion, the Federal Circuit noted that (1) Trebro sufficiently proved a likelihood of literal infringement; (2) Firefly did not raise a substantial question of patent validity; and (3) Trebro proved a likelihood of irreparable harm. The district court, in denying the preliminary injunction, imported a limitation into the independent claim from a preferred embodiment, which was recited in a later dependent claim. Furthermore, the raised “prior art” was not prior art to the patent-in-suit. The district court also failed to consider two additional factors for assessing preliminary injunctions—the balance of equities and that an injunction would be in the public interest.

Subject Matter Jurisdiction

StoneEagle Servs., Inc. v. Gillman, 746 F.3d 1059, 110 U.S.P.Q.2d 1165 (Fed. Cir. 2014). StoneEagle filed a declaratory judgment action that raised issues of inventorship and ownership. As patent ownership is a state law issue, jurisdiction turned on whether the complaint alleged a sufficient controversy concerning inventorship – a federal question. The Federal Circuit held that StoneEagle’s complaint did not allege a sufficient controversy concerning inventorship. Allegations that Gillman claimed to have written the patent application was not sufficient to plead inventorship. StoneEagle further failed to allege that Gillman claimed he invented or contributed to the conception of the idea.

Stays

Teva Pharms. USA, Inc. v. Sandoz, Inc., 134 S. Ct. 1621, 110 U.S.P.Q.2d 1523 (U.S. 2014). To recall and stay a mandate of the Federal Circuit, the Supreme Court stated that Teva must demonstrate (1) a reasonable probability that the Court would grant certiorari; (2) that there is a fair prospect that the Court will reverse; and (3) a likelihood that irreparable harm will result from the denial of a stay. The third prong was not deemed to be satisfied by Teva because it could recover damages from respondents for past patent infringement should it prevail. Thus, the extraordinary relief requested by Teva was unwarranted.

Transfer/Venue

In re Toyota Motor Corp., 747 F.3d 1338, 110 U.S.P.Q.2d 1330 (Fed. Cir. 2014). On a petition for writ of mandamus, the Federal Circuit vacated the district court’s order denying a motion to transfer, sever and stay. On remand to the district court, the Federal Circuit made clear that when the district court addresses the severance and stay motion, it must do so on the premise that certain defendants have a clear right to transfer. The transfer decision was vacated because the transfer analysis showed that the transferee forum is clearly more convenient than the current forum for the litigation.

Validity

Sanofi-Aventis Deutschland GmbH v. Glenmark Pharm. Inc., USA, 748 F.3d 1354, 110 U.S.P.Q.2d 1571 (Fed. Cir. 2014). The Federal Circuit affirmed the jury’s finding of no invalidity for obviousness and related district court rulings. On appeal, Glenmark argued that it was obvious to try the double-ring inhibitors in combination with channel blockers, and that the jury’s decision was based on incorrect law. The Federal Circuit found that substantial evidence supported findings that in turn supported the verdict that obviousness had not been proved by clear and convincing evidence.

TRADE SECRETS

Altavion, Inc. v. Konica Minolta Sys. Lab., Inc., 226 Cal. App. 4th 26 (Cal. App. 2014). The law of trade secrets recognizes that private parties invest extensive sums of money in certain information that loses its value when published to the world. Based on this logic, trade secret law creates a property right defined by the extent to which the owner of the secret protects its interest from disclosure to others. In doing so, it allows the trade secret owner to reap the fruits of its labor and protects the owner’s moral entitlement to these fruits. As such, trade secrets have been recognized as a constitutionally protected intangible property interest. Trade secret law promotes the sharing of knowledge, and the efficient operation of industry; it permits the individual inventor to reap the rewards of his or her labor by contracting with a company large enough to develop and exploit it. Trade secret law also helps maintain standards of commercial ethics. By sanctioning the acquisition, use, and disclosure of another’s valuable, proprietary information by improper means, trade secret law minimizes the inevitable cost to the basic decency of society when one steals from another. In doing so, it recognizes that good faith and honest, fair dealing is the very life and spirit of the commercial world.

Ozburn-Hessey Logistics v. 721 Logistics, LLC, 2014 U.S. Dist. LEXIS 48421, 15-19 (E.D. Pa. 2014). Customer lists can be protected as trade secrets, but customer information is at the very periphery of unfair competition. Customer information that is readily accessible from public sources cannot be protected as trade secrets. The plaintiff’s argument that the compilation of customer information is a trade secret fails because the compilation was created by the defendants accused of trade secret misappropriation, not the plaintiff. The rationale for protecting compilations as trade secrets is that the act of compiling entails the investment of time and resources by the party alleging the existence of a compilation trade secret. The plaintiff cannot allege misappropriation of a spreadsheet of customer information produced by someone else.

Purchasing Power, LLC v. Bluestem Brands, Inc., 2014 U.S. Dist. LEXIS 64101, 18-21 (N.D. Ga. 2014). Broad information categories are not sufficient to meet the plaintiff’s legal obligation to allege and prove it has a trade secret. The identification of a trade secret is a necessary predicate to alleging and proving that a trade secret was misappropriated. The plaintiff, following months of discovery, failed to identify the specific trade secrets it claims were misappropriated. Its scattershot of general categories of trade secrets is not enough and, thus, the defendant was entitled to summary judgment on the plaintiff’s trade secret claims for this failure to specify.

Spear Mktg. v. Bancorpsouth Bank & Argo Data Res. Corp., 2014 U.S. Dist. LEXIS 79319, 30-32 (D. Tex. 2014). Trade secret misappropriation may be proven wholly by circumstantial evidence. Proof of the defendant’s knowledge of the trade secret together with substantial similarities between the parties’ products or processes may justify an inference of use by the defendant.

TRADEMARKS

Cancellation/Foreign Registration

SARL Corexco v. Webid Consulting Ltd., 110 U.S.P.Q.2d 1587 (T.T.A.B. 2014). The TTAB granted SARL’s motion for summary judgment for cancellation of Webid’s BEARWW registration on the basis that the registration was void ab initio. The original applicant (the predecessor-in-interest of Webid) filed the application for BEARWW under Section 1(a), and following a rejection, amended the filing basis to Section 1(b) with a claim of priority under Section 44(d). Thereafter, the original applicant amended the filing basis to 44(e) based on a Canadian registration. However, the TTAB found that the original applicant did not own a foreign registration that could serve as the basis for the U.S. registration under Section 44(e). Thus, the TTAB determined that the issuance of the registration for BEARWW was improper and the registration was void.

Intent to Use/Likelihood of Confusion

Lincoln Nat’l Corp. v. Anderson, 110 U.S.P.Q.2d 1271 (T.T.A.B. 2014). Lincoln opposed Applicant Anderson’s applications in classes 35 and 36 for registration of the “FUTURE” mark for numerous goods and services on the ground that Andersen lacked the requisite bona fide intent to use the mark in commerce as to the services in the applications and that the mark would cause confusion with Lincoln’s “HELLO FUTURE” mark. The TTAB sustained the oppositions, allowing the applications to go forward as to the non-opposed classes.

In 2000 and 2008, Anderson filed trademark applications for the mark FUTURE for numerous goods and services, now identified in eleven international classes, based on a bona fide intent to use the mark in commerce. Lincoln opposed the applications as to classes 35 and 36 based on (1) a lack of bona fide intent to use the mark, and (2) a likelihood of confusion based on its alleged prior use and registration of the HELLO FUTURE mark in classes 35 and 36. The TTAB found that Anderson’s “idealistic hopes for forming a futuristic company based on his FUTURE mark” did not suffice as the requisite bona fide intent to use the mark in commerce in classes 35 and 36. The sheer number and diverse scope of services identified made it highly unlikely that Anderson would be able to introduce those services into commerce during the pendency of the intent-to-use applications, nor did he have the capacity to do so. Rather, the TTAB found that Anderson was merely attempting to reserve a general right in the FUTURE mark when he filed his intent-to-use applications.

Regarding likelihood of confusion as to the class 36 services, the TTAB applied the Dupont factors. It found that the services identified in Anderson’s application and in Lincoln’s registration were similar and in part legally identical. As such, the TTAB presumed and found that the trade channels and purchasers for the respective services were likewise similar and in part legally identical. The TTAB found that the similarity of marks arising from the presence of the word FUTURE in both marks outweighs the dissimilarities between the marks. As such, a likelihood of confusion was found to exist. Thus, the TTAB sustained Lincoln’s oppositions as to classes 35 and 36 and allowed Anderson’s applications to go forward as to the non-opposed classes.

Likelihood of Confusion

Hornady Mfg. Co. v. DoubleTap, Inc., 746 F.3d 995, 110 U.S.P.Q.2d 1140 (10th Cir. 2014). Hornady appealed from a district court order granting summary judgment to DoubleTap on Hornady’s trademark infringement claims. The Tenth Circuit affirmed.Since 1997, Hornady sold various firearm ammunition and related products under the name TAP (short for Tactical Application Police). In 1999, Hornady acquired trademark registration for the word mark TAP. DoubleTap, founded in 2002, specialized in niche hand-loaded rounds and calibers. As of 2006, packaging for DoubleTap’s products displayed the two words DOUBLE TAP, and sometime after 2010, the mark morphed into the single word DOUBLETAP. Hornady’s efforts to stop DoubleTap’s use of the mark DOUBLETAP failed, and litigation ensued, where the district court granted DoubleTap’s motion for summary judgment. Hornady appealed.

The Tenth Circuit examined six nonexhaustive factors to evaluate whether there was a likelihood of confusion between Hornady’s TAP mark and DoubleTap’s DOUBLETAP mark. First, the similarity of the marks favored DoubleTap, since the placement and use of the overlapping portion of the marks (TAP) differed, most of Hornady’s TAP products included the “Hornady®” house mark, further diminishing the visual similarities between the marks, and the marks had different meanings associated therewith. Because no evidence was presented to demonstrate DoubleTap’s intent to copy Hornady’s mark in 2002 when it chose the DOUBLE TAP mark, this factor also weighed in DoubleTap’s favor. Hornady only presented de minimis evidence of actual confusion, and its survey evidence was given little weight because of its methodological flaws. The fourth factor, similarity in products and marketing, weighed in favor of Hornady. Because consumers are not likely to purchase self-defense ammunition carelessly, the consumer care factor weighed in DoubleTap’s favor. The Tenth Circuit found that the district court correctly concluded that the TAP mark was both conceptually and commercially strong, thus weighing the strength factor in Hornady’s favor.

Although two of the factors favored Hornady, the court found that the key inquiry – the similarity of the marks – combined with the other remaining factors favored DoubleTap, suggested that consumers are not likely to be confused. Thus, the court affirmed summary judgment in favor of DoubleTap.

Stone Lion Capital Partners, LP v. Lion Capital LLP, 746 F.3d 1317, 110 U.S.P.Q.2d 1157 (Fed. Cir. 2014). The Federal Circuit affirmed the decision of the TTAB refusing registration of STONE LION CAPITAL for “financial services, namely investment advisory services, management of investment funds, and fund investment services.” Lion Capital LLP opposed registration of the STONE LION CAPITAL mark based on claims that the mark was likely to cause confusion with Lion Capital’s marks LION CAPITAL and LION for “financial and investment planning and research,” “investment management services,” and “capital investment consultation.”

The TTAB found that several of the Dupont factors weighed in favor of Lion Capital and that the remaining factors were neutral, and, thus refused registration of Stone Lion’s application. The Federal Circuit found that the TTAB properly considered and applied the Dupont factors. Specifically, the TTAB had properly compared the sight, sound, meaning, and overall commercial impression by comparing the marks in their entireties. The TTAB also properly compared the relevant trade channels and found that because the recited services were in part legally identical, it was proper for the TTAB to conclude that the channels of trade and potential purchasers were the same. Lastly, the Federal Circuit found that the TTAB properly considered all potential investors for the recited services, including ordinary customers seeking to invest with no minimum investment requirement, even though the services encompassed sophisticated purchasers as well as ordinary customers. Thus, the Federal Circuit affirmed the TTAB’s refusal to register Stone Lion’s application for STONE LION CAPITAL based on a likelihood of confusion with Lion Capital’s registered marks.

John C. Gatz

John C. Gatz is a member of the firm Nixon Peabody LLP in Chicago.

Column contributors include the following writers: Copyrights: Zachary J. Smolinski, Panduit Corporation; Michael N. Spink, Brinks, Gilson & Lione; Mark R. Anderson, Akerman LLP. Patents: Cynthia K. Barnett, Johnson & Johnson; R. Trevor Carter and Daniel M. Lechleiter, Faegre Baker Daniels LLP; Robert W. (Bill) Mason, Kinetic Concepts, Inc.; Peter J. Prommer, Nixon Peabody LLP. Trade Secrets: R. Mark Halligan, Nixon Peabody LLP. Trademarks: Janet M. Garetto and Elizabeth W. Baio, Nixon Peabody LLP; Amy L. Sierocki.