Defending themselves against the copyright infringement claim, Monster argued that Z-Trip, a DJ, indicated to Monster that he had the right to license the recordings to Monster for use in the promotional video. In determining whether attorneys’ fees and costs should be awarded, among other factors, the district court determined that much of Monster’s behavior during the litigation was objectively reasonable. But, the district court determined that Monster’s refusal to concede infringement and Monster’s attempts to shift legal responsibility for any infringement to Z-Trip were objectively unreasonable. The court determined that it was proper to award the Beastie Boys attorneys’ fees of about $667,000. While praising the work of the attorneys in the case, the court acknowledged that its reduction in the fee award compared to the amount requested reflected work done on unnecessary projects (including discovery not directly related to the case) and what the court determined was partner-heavy staffing by the Beastie Boys’ attorneys.

Software Trade Secret Claim Preempted by Copyright Act

Spear Mktg., Inc. v. BancorpSouth Bank, 791 F.3d 586, 115 U.S.P.Q.2d 1307 (5th Cir. 2015). Spear Marketing (SMI) created a software product called VaultWorks used by banks to manage cash inventory of bank branches and ATMs. BancorpSouth Bank (BCS) utilized VaultWorks. A specific web-based user interface provided access to VaultWorks, and no copy of the program or its source code was provided to BCS. BCS began working with ARGO, the company that supplied its ATM software, to obtain a similar product to VaultWorks. BCS provided ARGO with screen shots of the VaultWorks user interface, and outputs. ARGO was also approached by SMI about purchasing SMI. SMI provided ARGO with information about VaultWorks. ARGO did not purchase SMI. BCS eventually switched to the ARGO software, and discontinued using VaultWorks. SMI sued BCS and ARGO in Texas state court under a variety of causes, including violation of the Texas Theft Liability Act and trade secret misappropriation. BCS and ARGO removed the case to federal court based on SMI’s claims being preempted by copyright law. The district court granted BCS and ARGO summary judgment. SMI appealed.

The Fifth Circuit affirmed the removal to federal court and the grant of summary judgment. The Fifth Circuit initially reviewed the removal of the case to federal court based upon preemption of SMI’s state law claims by the Copyright Act. The Fifth Circuit ruled that the appropriateness of federal jurisdiction is based on the facts at the time of removal, and that acts subsequent a proper removal will not affect the jurisdiction of the federal court. The court then determined that the Texas claims brought by SMI were preempted by the Copyright Act, since the claims fell within the subject matter of copyright and were equivalent to the exclusive rights granted by the Copyright Act.

The Fifth Circuit then reviewed the grant of summary judgment to BCS and ARGO. The court ruled that SMI could not establish that BCS or ARGO used any trade secret that SMI owned. SMI was unable to establish that ARGO’s software copied VaultWorks, or that SMI had a claim to BCS’s cashflow data contained in the VaultWorks screen shots provided to ARGO. SMI failed to show any similarity between ARGO’s software and VaultWorks, so summary judgment was appropriate.

PATENTS

Burden of Proof

Lelo Inc. v. Int’l Trade Comm’n, 786 F.3d 879, 114 U.S.P.Q.2d 1840 (Fed. Cir. 2015). The Federal Circuit reversed an ITC decision finding that the domestic industry requirements under § 337 were satisfied. Applying substantial evidence review to questions of fact, the Federal Circuit held that qualitative factors alone were not sufficient to satisfy the “significant investment in plant and equipment” and a “significant employment or labor or capital” prongs of § 337. The use of U.S. suppliers does not qualify as contractors or subcontractors, and the purchasing of components from such suppliers is not evidence of investment made in capital. Furthermore, the quantitative evidence suggested the investment and employment by the plaintiff were insignificant.

Claim Construction

Kaneka Corp. v. Xiamen Kingdomway Grp. Co., 790 F.3d 1298, 115 U.S.P.Q.2d 1001 (Fed. Cir. 2015). The Federal Circuit affirmed-in-part, vacated-in-part, and remanded the district court’s grant of summary judgment of non-infringement based on claim construction. The Federal Circuit found that the district court’s construction relied on the Commission’s dictionary definition and related testimony. These external sources conflicted with the intrinsic record.

Microsoft Corp. v. Proxyconn, Inc., 789 F.3d 1292, 115 U.S.P.Q.2d 1198 (Fed. Cir. 2015). The Federal Circuit affirmed-in-part, reversed-in-part, vacated-in-part, and remanded the PTAB’s claim constructions and the PTAB’s denial of Proxyconn’s motion to amend. The Federal Circuit found that although the broadest reasonable interpretation standard for the PTAB’s claim construction was proper, the claim construction cannot be divorced from the specification and prosecution history, and must be consistent with the construction of a person of skill in the art. Here, the Federal Circuit found the PTAB’s claim construction was unreasonably broad, and therefore vacated the PTAB’s unpatentability determination. The Federal Circuit also found that the PTAB acted permissibly in requiring Proxyconn to establish the patentability of substitute claims, and because Proxyconn failed to do so, the Federal Circuit affirmed the PTAB’s denial of Proxyconn’s motion to amend.

Shire Dev., LLC v. Watson Pharm., Inc., 787 F.3d 1359, 114 U.S.P.Q.2d 1885 (Fed. Cir. 2015). On remand following the Supreme Court’s Teva Pharm. USA, Inc. v. Sandoz, Inc. decision regarding claim construction standards for review, the Federal Circuit reversed the district court’s claim constructions and findings of infringement. Because this case did not involve factual findings to which the Federal Circuit owed deference under Teva, the Federal Circuit again reversed the district court’s constructions of the disputed claim terms and subsequent findings of infringement, and remanded for further proceedings. The Federal Circuit further noted that “the [Supreme] Court did not hold that a deferential standard of review is triggered any time a district court hears or receives extrinsic evidence.” Here, there was no indication that the district court made any factual findings that led to the claim constructions.

TomTom, Inc. v. Adolph, 790 F.3d 1315, 115 U.S.P.Q.2d 1232 (Fed. Cir. 2015). The Federal Circuit reversed and remanded the district court’s final judgment of non-infringement based on the claim construction. The Federal Circuit found error with the district court for using an antecedent basis rationale to justify converting an independent part of the preamble into a new limitation in one construction. In another, the Federal Circuit reviewed de novo the district court’s construction, which was based on the prosecution history, and did not find a clean and unambiguous disclaimer as found by the district court. The Federal Circuit construed the remaining disputed terms by reflecting their plain and ordinary meaning, and reversed the district court’s constructions.

Claim Construction/Standard of Review

Teva Pharm., USA v. Sandoz, Inc., 789 F.3d 1335, 115 U.S.P.Q.2d 1210 (Fed. Cir. 2015). On remand from the Supreme Court, the Federal Circuit affirmed-in-part and reversed-in-part the district court’s judgment, with the claims again held invalid for indefiniteness. The Federal Circuit found the claim analysis of the term “molecular weight” to be a legal question, despite experts offering their opinion as to what the claim term meant. The claims did not indicate which of three measures to use for the term, and the specification likewise never defined the term or even mentioned the three measures. The Federal Circuit also found that the term did not have a plain meaning to one of skill in the art. Accordingly, the Federal Circuit held that the claim was invalid for indefiniteness by clear and convincing evidence because read in light of the specification and the prosecution history, the patentee failed to inform with reasonable certainty those skilled in the art about the scope of the invention. “A party cannot transform into a factual matter the internal coherence and context assessment of the patent simply by having an expert offer an opinion on it.”

Design Patents

Apple Inc. v. Samsung Elecs. Co., 786 F.3d 983, 114 U.S.P.Q.2d 1953 (Fed. Cir. 2015). The Federal Circuit affirmed the jury verdict on design patent infringement and damages and utility patent validity and damages. On design patent infringement, the Federal Circuit stated that elements dictated by their functional purpose are not excluded in their entirety from design patent claim scope. Also for the design patent infringement analysis, the Federal Circuit approved the following part of a jury instruction: “You do not need, however, to find that any purchasers actually were deceived or confused by the appearance of the accused Samsung products . . . .” And for design patent damages, the Federal Circuit rejected Samsung’s argument that an apportionment analysis must occur. Instead, the Federal Circuit affirmed the award of Samsung’s entire profits on the products.

En Banc

Lexmark Int’l, Inc. v. Impression Prods., Inc., 785 F.3d 565, 114 U.S.P.Q.2d 1667 (Fed. Cir. 2015). The Federal Circuit issued an order to hear the case en banc.

False Marking

Sukumar v. Nautilus, Inc., 785 F.3d 1396, 114 U.S.P.Q.2d 1626 (Fed. Cir. 2015). The Federal Circuit affirmed the district court’s holding that the plaintiff lacked standing to bring a false marking claim. The case presents the question whether (or to what extent) an entity that is not selling the product can suffer “competitive injury.” The Federal Circuit held “competitive injury” may be met if the plaintiff has attempted to enter the market. “An attempt is made up of two components: (1) intent to enter the market with a reasonable possibility of success, and (2) an action to enter the market.” The Federal Circuit found the plaintiff did not meet either of these components and, thus, lacked standing.

Indefiniteness

Biosig Instruments, Inc. v. Nautilus, Inc., 783 F.3d 1374, 114 U.S.P.Q.2d 1651 (Fed. Cir. 2015). The Federal Circuit reversed and remanded the district court’s grant of summary judgment of invalidity based on indefiniteness. The Supreme Court had stated that a patent is invalid for indefiniteness if its claims, read in light of the patent specification, and the prosecution history, fail to inform, with reasonable certainty, those skilled in the art about the scope of the invention. The test is “reasonable certainty.” Here, the Federal Circuit found a skilled artisan would understand the inherent parameters of the invention as provided in the intrinsic evidence.

Induced Infringement

Commil USA LLC v. Cisco Sys., Inc., 135 S.Ct. 1920, 114 U.S.P.Q.2d 1577 (U.S. 2015). The Supreme Court granted certiorari to consider the question whether a good-faith belief in invalidity is a defense to induced infringement. The Supreme Court found that a defendant’s belief regarding patent validity is not a defense to a claim of induced infringement. The Supreme Court stated that the “scienter element for induced infringement concerns infringement; that is a different issue than validity.” The Supreme Court found invalidity and infringement to be two separate inquiries. Furthermore, allowing a good-faith belief in invalidity as being a defense would have negative consequences including making litigation more burdensome.

Injunction/Contempt

ePlus, Inc. v. Lawson Software, Inc., 789 F.3d 1349, 115 U.S.P.Q.2d 1273 (Fed. Cir. 2015). The Federal Circuit vacated the district court’s permanent injunction and contempt order. After a jury found that Lawson infringed a total of five claims on two ePlus patents, the district court entered a permanent injunction. In a prior appeal of the jury verdict and injunction, the Federal Circuit found four of the five clams either invalid or not infringed, and affirmed the infringement verdict on only one claim (claim 26 of the ‘683 patent). On remand, the district court modified the injunction but also held Lawson in contempt for violating it. Lawson then initiated the present appeal, during which the PTO completed a reexamination of the ’683 patent and canceled claim 26 after determined that it was invalid. In ePlus’s separate appeal of that decision, the Federal Circuit affirmed the PTO’s invalidity finding, thereby eliminating the only claim underlying the injunction and contempt order against Lawson. Accordingly, in the present appeal, the Federal Circuit vacated the injunction and contempt order.

Jurisdiction

GTNX, Inc. v. INTTRA, Inc., 789 F.3d 1309, 115 U.S.P.Q.2d 1178 (Fed. Cir. 2015). The Federal Circuit dismissed the appeal from a PTAB decision because it lacked jurisdiction under 35 U.S.C. §§ 141 and 329. Appeals are authorized under § 141(c) only from a final written decision of the PTAB under § 328(a), which refers only to final written decisions with respect to the patentability of any patent claim challenged by the petitioner and any new claim added under § 326(d). Thus, because the PTAB did not make a decision with respect to the patentability of any claims but rather only on the issue of whether to institute proceedings, the Federal Circuit lacked jurisdiction.

Jurisdiction/Interference Estoppel

Biogen MA, Inc. v. Japanese Found. for Cancer Research, 785 F.3d 648, 114 U.S.P.Q.2d 1669 (Fed. Cir. 2015). Biogen sued under 35 U.S.C. § 146 to challenge an interference decision by the PTAB. However, because the AIA eliminated district court jurisdiction under 35 U.S.C. § 146 with respect to interferences commenced after September 15, 2012, the district court determined that it did not have jurisdiction and transferred the case to the Federal Circuit. The Federal Circuit, which had jurisdiction, affirmed that the district court lacked jurisdiction over Biogen’s interference challenge as a result of the rule changes implemented under the AIA. The Federal Circuit then turned to the merits of the PTAB’s interference ruling. The underlying interference at issue was the third interference, and the PTAB concluded that “interference estoppel by judgment” applied because there was no evidence that the claims at issue were patentably distinct from the counts at issue in the prior interferences (which Biogen had lost). The Federal Circuit affirmed, finding that Biogen failed to submit any relevant evidence indicating patentable distinctness.

Licensing Royalties

Kimble v. Marvel Entm’t, LLC, 135 S.Ct. 2401, 114 U.S.P.Q.2d 1941 (U.S. 2015).The Supreme Court followed its prior decision in Brulotte v. Thys Co. that a patentee cannot receive patent royalties for sales made after patent expiration. However, the Court noted several ways parties can structure agreements to achieve similar outcomes. These structures include (1) deferring payments for pre-expiration use of a patent; (2) tying royalties to non-patent rights; and (3) making non-royalty-based arrangements.

Literal Infringement

Akamai Techs., Inc. v. Limelight Networks, Inc., 786 F.3d 899, 114 U.S.P.Q.2d 1749 (Fed. Cir. 2015). Following remand from the Supreme Court, the Federal Circuit concluded that the defendant did not perform all the steps of the asserted method claims and that the record did not include any basis to impose liability on the defendant for the actions of its customers who carried out the other steps. Thus, no single entity, whether through agency, contract, or joint enterprise, performed each and every step of the claimed methods. The district court’s judgment of non-infringement was affirmed.

Means-Plus-Function

Williamson v. Citrix Online, LLC, 792 F.3d 1339, 115 U.S.P.Q.2d 1105 (Fed. Cir. 2015) (en banc). The Federal Circuit vacated the judgment of non-infringement of select claims, but affirmed the invalidity of other claims under 35 U.S.C. 112, ¶2. On the non-infringement issue, the district court improperly limited the claim term “graphical display” to specific examples from the specification. he Federal Circuit agreed that the limitation “distributed learning control module” is subject to 35 U.S.C. §112, ¶6 and overruled its prior precedent for interpreting means-plus-function claims. A new standard looked at whether the words of the claim are understood by persons of ordinary skill in the art to have a sufficiently definite meaning as the name for structure. The presumption that use of the term “means” creates a presumption that § 112, ¶6 applies was unaffected. The term “module” was deemed a generic description for software or hardware that performs a specific function and lacked any indication of structure, such that it was tantamount to using the term “means.” The phrase “distributed learning control” was also deemed as not imparting structure to the term “module,” and the claim did not describe how the module interacts with other components in a way that might inform the structural character. Because the patent fails to disclose any structure corresponding to a “coordinating” function of the “distributed learning control module”, the judgment of invalidity for indefiniteness was affirmed.

Eon Corp. IP Holdings LLC v. AT&T Mobility LLC, 785 F.3d 616, 114 U.S.P.Q.2d 1711 (Fed. Cir. 2015). The Federal Circuit affirmed summary judgment, finding all claims invalid as indefinite. Eight means-plus-function claim limitations were at issue, and the parties stipulated that the functions claimed in each limitation were performed by computer software. Relying on the well-established” rule “that the corresponding structure for a function performed by a software algorithm is the algorithm itself,” the Federal Circuit held that the patent was indefinite under 35 U.S.C. § 112, ¶ 2 because it failed to identify the requisite algorithm. Eon attempted to rely on In re Katz Interactive Call Processing Patent Litigation, 639 F.3d 1303 (Fed. Cir. 2011), which established an exception to the above rule when the claims involve basic processing, receiving, or storing functions that can be performed by a general computer without any special programming. However, the Federal Circuit held that the Katz exception applies “only in rare circumstances” and that “[a] microprocessor or general purpose computer lends sufficient structure only to basic functions of a microprocessor. All other computer-implemented functions require disclosure of an algorithm.”

Obviousness-Type Double Patenting

G.D. Searle LLC v. Lupin Pharm., Inc., 790 F.3d 1349, 115 U.S.P.Q.2d 1326 (Fed. Cir. 2015). The Federal Circuit affirmed the district court’s judgment finding that the Pfizer’s patent was invalid for obviousness-type double patenting and rejected Pfizer’s attempts to rely on the safe harbor provisions of 35 U.S.C. § 121. The asserted ’048 reissue patent reissued from the ’068 patent, which the Federal Circuit held in 2008 was invalid for obviousness-type double patenting and not protected under the safe harbor provisions of Section 121 because the ’068 patent had issued as a continuation-in-part (CIP), rather than as a divisional, of the application that led to the ’165 patent (the patent used to invalidate the ’068 patent). After the Court’s 2008 decision, Pfizer filed a reissue application asserting that it had erred in prosecuting the ’068 patent as a CIP instead of a divisional, modified the claims to conform it into a divisional application, and also designated the ’113 application that gave rise to the ’068 patent as a divisional (rather than a CIP) of the original-filed utility application that eventually issued as the ’165 patent. In affirming the district court’s opinion and, in particular, its analysis of the safe harbor provisions in Section 121, the Federal Circuit noted that it applies a strict test for applying section 121.” The Federal Circuit held that Pfizer did not enjoy the benefits of Section 121 because the ’048 reissue patent did not issue as a divisional of the original utility application; instead, it issued from a reissue application of the ’068 patent, which in turn issued from the ’113 application that Pfizer recently re-designated as a divisional application. The Federal Circuit rejected Pfizer’s attempt to re-designate the ’113 Application as a divisional application because the ’113 Application contained new matter not included in the original utility application. The Federal Circuit also held that Section 121 did not apply because the ’048 reissue patent and the ’165 patent that issued from the original utility application were not derived from the same restriction requirement. In reaching this holding, the Federal Circuit held: “When separate restriction requirements are imposed on separate applications and the record does not show that any of the various restriction requirements carried forward from one application to the next, the earlier restriction requirement cannot be viewed as having continued in effect with respect to the later-filed application.”

Patentable Subject Matter

Ariosa Diagnostics, Inc. v. Sequenom, Inc., 788 F.3d 1371, 115 U.S.P.Q.2d 1152 (Fed. Cir. 2015). The Federal Circuit affirmed summary judgment of the district court that the asserted method claims are not directed to patent-eligible subject matter. The multi-step method includes taking cffDNA from a sample of paternal plasma or serum, a naturally occurring non-cellular fetal DNA that circulates freely in the blood stream of pregnant women, and ends with paternally inherited cffDNA, which is also a natural phenomenon. Thus, the claims are directed to naturally occurring matter. The method claims did not transform the natural phenomenon of cffDNA into a patentable invention, particularly where the application of the method starts and ends with a naturally occurring phenomenon.

OIP Techs., Inc. v. Amazon.com, Inc., 788 F.3d 1359, 115 U.S.P.Q.2d 1090 (Fed. Cir. 2015). The Federal Circuit affirmed the district court’s holding that the patent is drawn to ineligible subject matter. The Federal Circuit stated, “At best, the claims describe the automation of the fundamental economic concept of offer-based price optimization through the use of generic-computer functions.” Because the patent claims the abstract idea of offer-based price optimization and lacks an inventive concept sufficient to transform the claimed subject matter into a patent-eligible application of that idea, the patent is drawn to ineligible subject matter.

Petition for Rehearing

ePlus, Inc. v. Lawson Software, Inc., 790 F.3d 1307, 115 U.S.P.Q.2d 1290 (Fed. Cir. 2015). The Federal Circuit denied ePlus’s combined petition for panel rehearing and rehearing en banc.

Preliminary Injunction

Takeda Pharm. USA, Inc. v. West-Ward Pharm. Corp., 785 F.3d 625, 114 U.S.P.Q.2d 1679 (Fed. Cir. 2015). The Federal Circuit affirmed the district court’s denial of Takeda’s motion for a preliminary injunction. Takeda sued West-Ward for allegedly inducing infringement of a patent directed to methods of administering colchicine products to treat gout. The district court granted Takeda’s request for a TRO, but subsequently denied Takeda’s motion for a preliminary injunction. The Federal Circuit found that a warning and other language found on the label of the accused product were insufficient to show the inducing acts necessary to meet the likelihood-of-success-on-the-merits aspect of the test for a preliminary injunction. Moreover, Takeda did not submit sufficient evidence to show that, regardless of the accused product’s label language, doctors who used the product actually prescribed it for the allegedly infringing (but off-label) use claimed in Takeda’s patent.

Reissue

ArcelorMittal France v. AK Steel Corp., 786 F.3d 885, 114 U.S.P.Q.2d 1835 (Fed. Cir. 2015). The Federal Circuit affirmed the district court holding that selected claims were invalid under 35 U.S.C. § 251 because the claims were broadened more than two years after issuance. The asserted claims were bound by a prior construction of the original claims and the reissue claims improperly broadened that construction. However, two newly added claims were not broadened during reissue, so the case was remanded for further proceedings.

Safe Harbor

Classen Immunotherapies, Inc. v. Elan Pharm., Inc., 786 F.3d 892, 114 U.S.P.Q.2d 1920 (Fed. Cir. 2015). The Federal Circuit vacated the district court’s judgment of non-infringement and remanded the case for further proceedings on the parties’ pending claims and counterclaims, including issues of validity, enforceability, and infringement of the asserted patent. In the district court, Classen alleged that Elan infringed the patent by conducting a clinical study and submitting the results to the FDA to revise the product label, among other accused activities. The Federal Circuit recognized that under § 271(e)(1), the infringement exemption extends to all uses of patented inventions that are reasonably related to the development and submission of any information under the FDA. Although this was post-approval submission, Elan’s clinical study and subsequent FDA submissions fell within the safe harbor. Likewise, subsequent disclosure or use of information obtained from an exempt clinical study did not repeal the safe harbor exemption, provided that the subsequent disclosure or use was itself not an act of infringement of the asserted claims.

Standing

Alps South, LLC v. Ohio Willow Wood Co., 787 F.3d 1379, 114 U.S.P.Q.2d 1931 (Fed. Cir. 2015). The Federal Circuit reversed the district court’s denial of Ohio Willow Wood’s (OWW’s) motion to dismiss for lack of standing, vacated the judgment of validity and infringement, and remanded. Alps possessed neither legal title nor all substantial rights at the outset of the litigation, which therefore required that Alps join the patent owner as co-plaintiff. Alps had merely a right to exclude and a right to sue in a field of use. The patent owner retained all other rights The license restriction therefore prevented Alps from obtaining standing to pursue patent litigation without naming the patent owner as a co-plaintiff.

TRADE SECRETS

Giles Constr., LLC v. Tooele Inventory Solution, Inc., 2015 WL 3755863, 2015 U.S. Dist. LEXIS 72722 (D. Utah 2015). The UTSA preemption reaches any state law claim based on allegations of misuse of confidential information, regardless of whether the claim contains additional, separate allegations. Therefore, the UTSA preempts claims that are to some degree based on, or dependent on, misuse of information even if they are not based solely on the misuse of information. Stated differently, if the claim fails without the allegations regarding misuse of information, the UTSA preempts it. This is so even if the purported confidential information does not constitute a trade secret, which forecloses the ability to alternatively allege causes of action if they are based on the misuse of information. Here, each state law claim is based on the alleged unauthorized use of information. The UTSA preempted these state law claims.

Macquarie Bank Ltd. v. Knickel, 2015 WL 4385677, 2015 U.S. App. LEXIS 12356 (8th Cir. 2015). The district court granted summary judgment to Macquarie on Lexar’s misappropriation claim because it found that Lexar did not own or have any interest in the trade secrets when the misappropriation occurred. The Eighth Circuit declined to decide whether ownership is an element of a misappropriation claim under the North Dakota Uniform Trade Secrets Act. However, the Eighth Circuit held that if there are multiple people entitled to trade secret protection, only that one from whom misappropriation occurred is entitled to a remedy. Therefore, summary judgment dismissing Lexar’s misappropriation claim was affirmed.

New Phase Dev., LLC v. Cook, 2015 WL 4528695, 2015 U.S. Dist. LEXIS 98461 (D. Idaho 2015). Any exploitation of a trade secret likely to result in injury to the trade secret owner or enrichment to the defendant is a use under this Section. Thus, marketing goods that embody the trade secret, employ the trade secret in manufacturing or production, rely on the trade secret to assist or accelerate research or development, or solicit customers through the use of information that is a trade secret, all constitute use under the UTSA. There are no technical limitations on the conduct that constitutes use for a misappropriation analysis under the UTSA.

T-Mobile USA, Inc. v. Huawei Device USA, Inc., 2015 WL 4308682, 2015 U.S. Dist. LEXIS 91495 (W.D. Wash. 2015). The UTSA declares that it “displaces conflicting tort, restitutionary, and other law of this state pertaining to civil liability for misappropriation of a trade secret.” There are no allegations in T-Mobile’s complaint that indicate it can prove tortious interference without relying on the same facts that support its trade secret misappropriation claim. The district court therefore dismissed the tortious interference claim against Huawei.

XTec, Inc. v. Hembree Consulting Servs., 2015 WL 3797165, 2015 U.S. Dist. LEXIS 79134 (S.D. Fla. 2015). Computer programs may be protected and maintained as trade secrets. A software compilation and the overall design of a software program may be protectable as trade secrets. Although a plaintiff must describe the trade secret for which it seeks protection with sufficient particularity to permit the defendants to ascertain the boundaries of the trade secret, it need not specify the lines of source code that make up the trade secret.

TRADEMARKS

Bona Fide Intent to Use Mark in Commerce

M.Z. Berger & Co. v. Swatch AG, 787 F.3d 1368, 114 U.S.P.Q.2d 1892 (Fed. Cir. 2015). The Federal Circuit affirmed the decision of the TTAB sustaining an opposition to an intent-to-use application for the mark iWATCH for watches, clocks, and goods related to watches and/or clocks, owned by M.Z. Berger. Swatch filed the opposition based on its mark, SWATCH. Berger appealed the TTAB’s denial of registration due to its determination that Berger lacked a bona fide intent to use the mark in commerce at the time the application was filed.

The Federal Circuit first determined that a lack of a bona fide intent to use a mark in commerce is proper statutory grounds on which an opposer may challenge a pending application. The Federal Circuit further found that an applicant’s intent must be demonstrable and more than a mere subjective belief. Such a determination may be made on a case-by-case basis considering the totality of the circumstances. Viewing the evidence as a whole, the Federal Circuit agreed with the TTAB that Berger lacked the bona fide intent to use the mark in commerce. The Federal Circuit found substantial evidence supported the decision, noting the inconsistent testimony provided by Berger’s employees, the lack of nexus between Berger’s ability to produce watches and the capacity to produce a “smart” watch, and the lack of documentary evidence submitted by Berger (consisting mainly of evidence related only to prosecution of its trademark application). Recognizing that the bar for showing a bona fide intent is not high, and considering the totality of circumstances, the Federal Circuit determined that at the time the application was filed, Berger’s intent was to reserve a right in the mark and not a bona fide intent to use the mark in commerce.

Generic Marks

Princeton Vanguard, LLC v. Frito-Lay N. Am., Inc., 786 F.3d 960, 114 U.S.P.Q.2d 1827 (Fed. Cir. 2015). Princeton Vanguard appealed from the final decision of the TTAB cancelling its registration of the mark PRETZEL CRISPS for pretzel crackers on the Supplemental Register and denying its application to register PRETZEL CRISPS on the Principal Register. The Federal Circuit found that the TTAB applied the incorrect legal standard in evaluating whether the mark was generic and, thus, vacated and remanded for further proceedings.

Frito-Lay opposed Princeton Vanguard’s application to register PRETZEL CRISPS in standard character form for pretzel crisps on the Principal Register, arguing that the term PRETZEL CRISPS is generic for pretzel crackers and thus not registrable. Frito-Lay also filed a petition to cancel Princeton Vanguard’s Supplemental Registration for PRETZEL CRISPS, also for pretzel crackers, on the same grounds. The word “pretzel” was disclaimed in both the application and the registration. The TTAB sustained Frito-Lay’s opposition and granted its petition for cancellation. The TTAB found that pretzel crisps was a compound term, not a phrase, and analyzed the terms individually. As such, it found that the term “pretzel” is generic for pretzels and pretzel snacks and the term “crisps” is generic for crackers, cancelling the registration and denying the application for the PRETZEL CRISPS marks.

The Federal Circuit agreed with Princeton Vanguard’s argument on appeal that the TTAB applied the incorrect legal standard in its genericness analysis when it concluded that the two-part test set forth in Marvin Ginn. Am. Fertility (which states that the TTAB must first identify the genus of the goods or services at issue and then assess whether the public understands the mark, as a whole, to refer to that genus) did not apply if the mark was considered a compound term. The Federal Circuit stated that the applicable test is the same regardless of whether the mark is a compound term or a phrase. Namely, the TTAB must consider the record evidence of the public’s understanding of the mark as a whole. The Federal Circuit thus concluded that the TTAB applied the incorrect legal standard in its genericness determination and that, on remand, the TTAB must consider evidence of the relevant public’s understanding of the term PRETZEL CRISPS in its entirety.

Trade Dress

Apple Inc. v. Samsung Elecs. Co., 786 F.3d 983, 114 U.S.P.Q.2d 1953 (Fed. Cir. 2015). A jury had previously found Samsung liable for the likely dilution of Apple’s iPhone trade dresses under the Lanham Act. In reviewing the Lanham Act claims, the Federal Circuit applied the law of the regional circuit (Ninth Circuit). The Federal Circuit reversed the jury’s findings that Apple’s asserted trade dresses were protectable. It therefore vacated the jury’s damages awards against the Samsung products that were found liable for trade dress dilution and remanded for further proceedings.

Apple asserted that Samsung infringed trade dress elements of its iPhone 3G and 3GS products, including: a rectangular product with rounded corners; a display underneath a flat, clear surface; substantial black borders above and below the display screen with narrower black borders on either side; and a row of small dots and colorful square icons with rounded corners on the display screen when the device was on. Because this asserted trade dress was unregistered, Apple had the burden of showing that the trade dress was not functional. The Federal Circuit found that the requirement that the unregistered trade dress “serves no purpose other than identification” could not be reasonably inferred from the evidence because each element of the unregistered the trade dress had a usability function associated therewith. Apple also failed to show alternative designs that offered exactly the same features as the asserted trade dress or that its advertisements including the unregistered trade dress did not tout a utilitarian advantage thereof. Finally, Apple failed to show that the design elements that comprised its alleged unregistered trade dress were not relatively simple or inexpensive to manufacture. Thus, the Federal Circuit found that Apple failed to show that there was substantial evidence in the record to support a jury finding in favor of non-functionality for the unregistered trade dress and failed to rebut the evidence that the elements in the unregistered trade dress serve the functional purpose of improving usability.

Apple also asserted a federal trademark registration for its trade dress, which claimed the design details of each of sixteen icons on the iPhone’s home screen framed by the iPhone’s rounded-rectangular shape with silver edges and a black background. The Federal Circuit found that each of the individual elements claimed by the registered trade dress were functional, e.g., they were “visual shorthand” for something and provided for “more real estate” on the display. The undisputed evidence showed the functionality of the registered trade dress and shifted the burden of proving non-functionality back to Apple, who failed to disprove the functionality.

In view of its conclusion that the jury’s findings of non-functionality of the asserted trade dresses were not supported by substantial evidence, the Federal Circuit did not reach Samsung’s other claims.

Concurrent Use Proceeding

Southwestern Mgmt., Inc. v. Ocinomled, Ltd., 115 U.S.P.Q.2d 1007 (TTAB 2015). The TTAB refused Southwestern’s request for a restricted concurrent use registration for the mark DELMONICO’S for restaurant services. The TTAB found that, even in Southwestern’s current territory, a likelihood of confusion existed between Southwestern’s mark and two nearly identical marks owned by Ocinomled and Emeril’s Food.

Southwestern’s application for DELMONICO’S was opposed by Ocinomled and Emeril’s Food, after which Southwestern amended its application to seek a concurrent use registration and institution of a concurrent use proceeding. In its amended application, Southwestern claimed exclusive rights to use the mark in the U.S. except within (1) a forty mile radius around the Empire State Building in New York (with respect to Ocinomled) and (2) a forty mile radius around the Superdome in New Orleans and a forty mile radius around the Stratosphere in Las Vegas (Emeril’s Food). 

Southwestern operates five restaurants in connection with the DELMONICO’s mark in Syracuse, Albany, Utica, Rochester, and Orlando, specializing in Italian food at moderate prices. Ocinomled operates a restaurant in Manhattan under the mark DELMONICO’S, located in a building known for the historic Delmonico’s restaurant. Emeril’s Food operates two restaurants in connection with the mark DELMONICO in New Orleans and Las Vegas. Upon reviewing the details in the record regarding the use of the marks by each party, the TTAB determined that the evidence supported a finding that Emeril’s Food was clearly the senior user to both Southwestern and Ocinomled. 

Turning to the issue of concurrent registrations, the TTAB reviewed the two conditions necessary for issuing a concurrent use registration. The TTAB found that Southwestern had satisfied the first condition precedent by demonstrating that it was entitled to use of the mark due to its lawful use in commerce, which began prior to the filing date of Southwestern’s DELMONICO’S application. The TTAB also noted that the record did not show that Southwestern had knowledge of use of DELMONICO by either Ocinomled or Emeril’s Food at the time Southwestern adopted DELMONICO’S, and that even if Southwestern had knowledge of the uses by either Ocinomled or Emeril’s, Southwestern could have believed that its use was sufficiently remote to make confusion unlikely.

The second condition requires that a likelihood of confusion is obviated by imposition of “conditions and limitations” proposed by the party seeking the concurrent registration. The TTAB found that Southwestern’s proposed geographic limitations were not sufficient to obviate the likelihood of confusion. The TTAB noted that the reputation of Emeril’s DELMONICO mark reached most geographic regions in the U.S., that Ocinomled too had demonstrated that its DELMONICO’S mark had a fairly widespread reputation, and that considering the geographic scope of the parties’ reputations, a likelihood of confusion would exist even if Southwestern’s territory was limited to the cities in New York where it was currently using the mark. Thus, the second condition precedent for obtaining a concurrent use registration was not met and the concurrent use proceeding was dismissed