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Decisions in Brief

Decisions in Brief

John C. Gatz

©2017. Published in Landslide, Vol. 9, No. 4, March/April 2017, 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.


MP3tunes Faces Greater Loss on Appeal

EMI Christian Music Grp., Inc. v. MP3tunes, LLC, 840 F.3d 69, 120 U.S.P.Q.2d 1449 (2nd Cir. 2016). Plaintiffs Capitol Records won a trial verdict of over $20 million in a copyright infringement case against MP3tunes, which provided a forum for users to upload music. That damages’ verdict was reduced from a jury-awarded $48 million, based on the district court’s determination that MP3tunes fit within the safe harbor provisions of the DMCA. Capitol appealed, seeking to reverse that determination.

The Second Circuit evaluated whether MP3tunes qualified for safe harbor under the DMCA. The Second Circuit disagreed with the district court’s finding that “repeat infringers” as used in the DMCA required an understanding of the intent of parties uploading music. Rather, the Second Circuit stated that “repeat infringers” meant exactly that, and would place a burden on MP3tunes and similar services to track and remove users who repeatedly post infringing content, regardless of those users’ knowledge or intent in posting that content. The Second Circuit reversed the district court’s safe harbor finding, stating: “Based on the available evidence, a reasonable jury could have concluded that it was reasonable for MP3tunes to track users who repeatedly created links to infringing content….” Further, the Second Circuit determined that with respect to some types of content, MP3tunes and its executives had “red flag knowledge” of infringement on its service. For example, some content included Beatles songs that had, at the time of uploading, never been authorized for distribution as MP3s.

‘Who’s on First’ Rightsholders End Up In Second Place

TCA Television Corp. v. McCollum, 839 F.3d 168, 120 U.S.P.Q.2d 1248 (2nd Cir. 2016). Plaintiffs TCA Television and others are owned by the heirs of the comedy duo Abbott and Costello. The defendants are related to the Broadway play “Hand to God”, in which a character performs a portion of the “Who’s on First?” routine made famous by Abbott and Costello. In the play, a teenage boy from the Bible Belt performs the routine with a sock puppet that represents his alter ego. The district court found that defendant’s use of the comedy routine was highly transformative, and thus entitled to protection as fair use. The Second Circuit noted that despite the different context of the play, the routine was performed almost verbatim. The Second Circuit therefore felt the finding of “transformation” at the motion to dismiss stage was improper. However, the Second Circuit also held that plaintiff TCA Television could not prove ownership of the copyright, and therefore still dismissed the claim against defendants.


Claim Construction

LifeNet Health v. LifeCell Corp., 837 F.3d 1316, 120 U.S.P.Q.2d 1001 (Fed. Cir. 2016). The Federal Circuit affirmed the jury’s findings on infringement, validity, and damages related to apparatus and method claims directed to plasticized soft tissue grafts suitable for transplantation into humans. One of the issues weighing against LifeCell was that it did not timely request a new or modified claim construction. The Federal Circuit also found that direct infringement existed because the final product that left LifeCell’s hands was complete and was infringed in that condition.

Mass. Inst. Of Tech. v. Shire Pharm., Inc., 839 F.3d 1111, 120 U.S.P.Q.2d 1492 (Fed. Cir. 2016). The Federal Circuit affirmed the district court’s claim construction of several terms. Use of the ordinary meaning was affirmed where there was no clear and unmistakable disclaimer and where the specification did not limit the disputed terms.


Apple Inc. v. Samsung Elecs. Co., 839 F.3d 1034, 120 U.S.P.Q.2d 1400 (Fed. Cir. 2016). The en banc Federal Circuit affirmed and reinstated the district court judgment as to three of the patents. The Federal Circuit reinstated portions of the panel decision that pertained to the four other patents in suit, for which the panel decision had affirmed the district court’s rulings on all issues of those patents. The Federal Circuit remanded the willfulness issue for the district court for consideration under the Supreme Court’s Halo standard. The panel had reversed nearly a dozen jury fact findings, despite the fact that some of the findings were not appealed and the applicable substantial evidence standard of review was not mentioned. The panel improperly consulted extra-record evidence in its analysis.


Cox Commc’ns, Inc. v. Sprint Commc’n Co., 838 F.3d 1224, 120 U.S.P.Q.2d 1283 (Fed. Cir. 2016). The Federal Circuit reversed the district court’s finding of the asserted claims as invalid under § 112, ¶ 2. The Federal Circuit found the term “processing system” in method claims played no discernable role in defining the scope of the claims. Thus, it is difficult to see how this term would prevent the claims (the remainder of which Cox did not challenge on indefiniteness grounds) from serving their notice function under § 112.


UCB, Inc. v. Yeda Research & Dev. Co., 837 F.3d 1256, 120 U.S.P.Q.2d 1488 (Fed. Cir. 2016). The Federal Circuit affirmed the district court’s grant of summary judgment of non-infringement. The Federal Circuit held that based on the specification and prosecution history, the claimed monoclonal antibodies are not infringed by the accused products.

Inter Partes Review

Husky Injection Molding Sys. Ltd. v. Athena Automation Ltd., 838 F.3d 1236, 120 U.S.P.Q.2d 1324 (Fed. Cir. 2016). For lack of jurisdiction under 35 U.S.C. § 314(d), the Federal Circuit dismissed the patentee’s appeal of the PTAB’s IPR institution decision, which the patentee argued should have been denied based on the doctrine of assignor estoppel. To reach this conclusion, the Federal Circuit applied a two-part test to determine whether it had jurisdiction over the patentee’s appeal: (1) under the exceptions in Cuozzo II, whether the patentee’s challenge was not closely related to the application of statutes related to the PTO’s institution authority; or (2) whether the patentee’s challenge was directed to the PTAB’s ultimate invalidation authority.


Classco, Inc. v. Apple, Inc., 838 F.3d 1214, 120 U.S.P.Q.2d 1241 (Fed. Cir. 2016). The Federal Circuit affirmed the PTAB’s holding of several claims being invalid. While disagreeing with the weight the PTAB gave certain secondary considerations of non-obviousness, the Federal Circuit still agreed with the overall conclusion of obviousness.

In re Efthymiopoulos, 839 F.3d 1375, 120 U.S.P.Q.2d 1443 (Fed. Cir. 2016). The Federal Circuit affirmed the PTAB’s decision that found the claims obvious. The Federal Circuit found substantial evidence supported the PTAB’s finding and noted that the evidence of unexpected results was insufficient to overcome the prima facie case of obviousness.

Unwired Planet, LLC v. Google Inc., 841 F.3d 995, 120 U.S.P.Q.2d 1593 (Fed. Cir. 2016). The Federal Circuit affirmed the PTAB’s finding during inter partes review that the subject matter of the six challenged patent claims was obvious.

Patent-Eligible Subject Matter

Affinity Labs of Tex., LLC v. Inc., 838 F.3d 1266, 120 U.S.P.Q.2d 1210 (Fed. Cir. 2016). The Federal Circuit affirmed the district court’s holding that the asserted claims are invalid as being directed to patent-ineligible subject matter. This case is related to Affinity Labs of Tex., LLC v. DirecTV, LLC, 120 U.S.P.Q.2d 1201 (Fed. Cir. 2016). The patents were different, but the specification was the same. The Federal Circuit came to the same conclusion as in the other case.

Affinity Labs of Tex., LLC v. DirecTV, LLC, 838 F.3d 1253, 120 U.S.P.Q.2d 1201 (Fed. Cir. 2016). The Federal Circuit affirmed the district court’s holding that the asserted claims are invalid as being directed to patent-ineligible subject matter. The Federal Circuit agreed with the district court that the concept of providing out-of-region access to a regional broadcast was an abstract idea that had been employed by nearly every form of media that has a local distribution. Limiting the claim to cell phone usage only serves to confine the abstract idea to a certain technological environment.

Amdocs (Israel) Ltd. v. Openet Telecom, Inc., 841 F.3d 1288, 120 U.S.P.Q.2d 1527 (Fed. Cir. 2016). The Federal Circuit reversed and remanded the district court’s holding that the patents were not directed to patent eligible subject matter under § 101. The Federal Circuit found that the claims recited a series of limitations that, when considered individually and as an ordered combination, provided inventive concepts sufficient to confer eligibility. The claims describe a specific, unconventional technological solution, narrowly drawn to withstand preemption concerns, to a technological problem.

FairWarning IP, LLC v. Iatric Sys., Inc., 839 F.3d 1089, 120 U.S.P.Q.2d 1293 (Fed. Cir. 2016). The Federal Circuit affirmed the district court’s dismissal of the plaintiff’s infringement claims, holding that the asserted patent was invalid under § 101. The Federal Circuit held that the claims, which relate to analyzing a medical patient’s health audit log data, covered an abstract idea. This concept merely implemented an old practice in a new environment. The claims fail to add limitations that impart patent eligibility and just involve generic computer components.

Intellectual Ventures I LLC v. Symantec Corp., 838 F.3d 1307, 120 U.S.P.Q.2d 1353 (Fed. Cir. 2016). A split panel affirmed-in-part and reversed-in-part the district court’s patent-eligibility rulings with respect to three patents owned by Intellectual Ventures. The majority concluded that all of the asserted claims were patent ineligible abstract ideas implemented using routine, conventional systems on a generic computer and without providing any added inventive concept sufficient to satisfy § 101. Several asserted claims cover receiving email/data file identifiers, characterizing the email/date file based on those identifiers, and communicating the characterizing/filtering the email/data file. Other asserted claims relate to methods for sorting email or screening computer viruses.

McRO, Inc. v. Bandai Namco Games Am. Inc., 837 F.3d 1299, 120 U.S.P.Q.2d 1091 (Fed. Cir. 2016). The Federal Circuit reversed the district court’s holding that the asserted claims are invalid as being directed to patent-ineligible subject matter. The Federal Circuit found the 3-D animating claims to be patent eligible.

Synopsys, Inc. v. Mentor Graphics Corp., 839 F.3d 1138, 120 U.S.P.Q.2d 1473 (Fed. Cir. 2016). The Federal Circuit affirmed the district court’s grant of summary judgment of invalidity after determining the claims recite nothing more than an abstract idea that would rise to the level of inventive concept. The claims were deemed to be directed to the abstract idea of translating functional descriptions of a logic circuit into a hardware component of the logic circuit. The claims further did not involve a computer and, thus, could not be characterized as an improvement in a computer as a tool.

Pleading Requirement

Lyda v. CBS Corp., 838 F.3d 1331, 120 U.S.P.Q.2d 1310 (Fed. Cir. 2016). The Federal Circuit affirmed the district court’s dismissal of the plaintiff’s infringement claims and held that Form 18, a now-defunct template for alleging patent infringement in the Federal Rules of Civil Procedure, does not apply to joint patent infringement claims.

Prior Art

Perfect Surgical Techniques, Inc. v. Olympus Am., Inc., 841 F.3d 1004, 120 U.S.P.Q.2d 1606 (Fed. Cir. 2016). The Federal Circuit vacated and remanded the PTAB’s finding during inter partes review (IPR) that 16 challenged claims were invalid due to anticipation or obviousness in view of a Japanese Application Publication under 35 U.S.C. § 102(a). During the IPR trial, the patentee attempted to antedate the Japanese reference by presenting evidence of prior conception, diligence, and reduction to practice. The PTAB found that the patentee failed to show that the named inventor had engaged in the continuous exercise of reasonable diligence. The Federal Circuit found that the “standard demanded by the Board is too exacting and in conflict with our precedent.” In particular, a patent owner need not prove the inventor continuously exercised reasonable diligence throughout the critical period, but must show there was reasonably continuous diligence.

Prosecution History Estoppel

Poly-Am., LP v. API Indus., Inc., 839 F.3d 1131, 120 U.S.P.Q.2d 1373 (Fed. Cir. 2016). The Federal Circuit affirmed the district court’s entry of judgment of noninfringement. The Federal Circuit found that the specification and prosecution history of Poly-America’s patent contains clear and unequivocal statements that the inventor intended to limit the claimed invention and disavowed claims comprising short seals that did not extend inwardly.

PTO Practice and Procedure

Veritas Techs. LLC v. Veeam Software Corp., 835 F.3d 1406, 120 U.S.P.Q.2d 1046 (Fed. Cir. 2016). The Federal Circuit upheld the PTAB’s broadest reasonable claim construction and obviousness determination. However, the Federal Circuit vacated the denial of Veritas’s motion to amend the claims on arbitrary and capricious grounds and remanded on the same. The patent owner discussed the newly added feature in combination with other known features, but the PTAB improperly wanted discussion on whether each newly added feature was separately known in the prior art.

Medtronic, Inc. v. Robert Bosch Healthcare Sys., 839 F.3d 1382, 120 U.S.P.Q.2d 1484 (Fed. Cir. 2016). On a petition for rehearing in light of Cuozzo, the Federal Circuit reaffirmed its earlier decision that the PTAB’s vacatur of its institution decisions and termination of the proceeding constitute decisions whether to institute inter partes review and, thus, are final and not appealable.

Standard of Review

In re NuVasive, Inc., 841 F.3d 966, 120 U.S.P.Q.2d 1552 (Fed. Cir. 2016). The Federal Circuit affirmed the PTAB’s final written decision in the first inter partes review (IPR), invalidating 20 claims and upholding one claim, and vacated the PTAB’s decision in the second IPR and remanded for further proceedings regarding the remaining two claims.

Standing/Inventorship/Default Judgment

Drone Techs., Inc. v. Parrot, S.A., 838 F.3d 1283, 120 U.S.P.Q.2d 1336 (Fed. Cir. 2016). The Federal Circuit reversed and remanded the district court’s entry of default judgment and subsequent awards of damages and attorney fees, which the district court based on the defendant’s failure to comply with two discovery orders. The Federal Circuit also affirmed the district court’s denial of the defendant’s motion to dismiss for lack of standing, which was premised on the argument that the person named on the patents was not the true inventor, but remanded to permit the defendant to pursue its affirmative defense of improper inventorship under 35 U.S.C. § 102(f). With respect to the standing issue, the Federal Circuit held that, for purposes of standing, courts must presume that a patent’s named inventor(s) is/are correctly named. With respect to the default judgment, the Federal Circuit found that the district court twice abused its discretion: first, when it twice ordered the defendant to produce source code, and second, when it imposed a default sanction on the defendant for not complying with those orders.

Unappealable Determination

Wi-Fi One, LLC v. Broadcom Corp., 837 F.3d 1329, 120 U.S.P.Q.2d 1126 (Fed. Cir. 2016). The Federal Circuit found the PTAB’s ruling on whether the defendant was time-barred was unappealable. The statute governing the PTAB’s institution of inter partes review provides that the “determination by the Director whether to institute an inter partes review under this section shall be final and nonappealable.” The Supreme Court’s ruling in Cuozzo Speed Technologies did not overturn the established law that the Director’s determination was unappealable.

Willful Infringement/Enhanced Damages

WesternGeco LLC v. ION Geophysical Corp., 837 F.3d 1358, 120 U.S.P.Q.2d 1177 (Fed. Cir. 2016). On vacatur and remand from the Supreme Court in view of the intervening opinion from Halo Electronics v. Pulse Electronics, the Federal Circuit vacated the district court’s ruling of no willful infringement because it was solely based on a finding that the defendant had not been objectively reasonable in advancing its defenses to infringement. The Federal Circuit explained that a lack of objective reasonableness cannot form the sole basis for a finding of no willful infringement.

Written Description/Inherent Disclosure

Yeda Research & Co. v. Abbott GmbH & Co. KG, 837 F.3d 1341, 120 U.S.P.Q.2d 1299 (Fed. Cir. 2016). The Federal Circuit affirmed summary judgment in favor of Abbott, finding that the German patent applications provided adequate written description support for the claimed inventions. Thus, Abbott’s asserted patents were entitled to a priority date that pre-dated the prior art on which Yeda relied.


Stryker Corp. v. Zimmer, Inc., 837 F.3d 1268, 120 U.S.P.Q.2d 1266 (Fed. Cir. 2016). The Federal Circuit affirmed the jury’s findings of infringement and validity, the determination of lost profits, and determination of willful infringement, but awards of treble damages and attorneys’ fees were vacated and remanded. The Federal Circuit upheld the district court’s claim construction, infringement, and validity findings. The determination of willfulness was evaluated under Seagate. The Supreme Court rejected this approach and found that a preponderance of the evidence standard should be used instead of clear and convincing. Since willfulness was found under the higher standard previously, that holding was upheld. However, due to the Supreme Court’s findings, the Federal Circuit vacated and remanded the award of treble damages and attorneys’ fees.


Artec Group, Inc. v. Klimov, 2016 WL 7157635, 2016 U.S. Dist. LEXIS 170194 (N.D. Cal. 2016). The plaintiff alleged conversion, unjust enrichment, constructive trust, civil conspiracy and unfair competition claims. The district court dismissed these non-contract claims concluding that such claims are preempted by the California Uniform Trade Secrets Act (CUTSA), which displaces other civil remedies that are based on trade secret misappropriation. The district court rejected the defendant’s argument that claims based on the misappropriation of otherwise confidential or proprietary information, but not trade secret information, should not be preempted. The CUTSA is the exclusive civil remedy for non-contract claims based on the same nucleus of facts as the trade secret misappropriation claim.

Mission Measurement Corp. v. Blackbaud, Inc., 2016 WL 6277496, 2016 U.S. Dist. LEXIS 148607 (N.D. Ill. 2016). The plaintiff (Mission Measurement) alleged that it is the market leader in social sector data and insights relating to social change programs aimed at addressing issues such as poverty, hunger, access to healthcare, and climate change. Using data collected from social program evaluations, Mission Measurement compiled a database of over 75,000 different data points, which was categorized into approximately 130 social outcome types. The complaint identified email attachments and other confidential information such as a taxonomy sample, screen-shots of an outcomes prototype, and other aspects of the plaintiff’s system that were disclosed in confidence after the parties signed a confidentiality and a non-disclosure agreement. Based on these detailed allegations, the plaintiff sufficiently identified the trade secrets at issue, including the dates and ways it shared this information with the defendants.

Unum Grp. v. Loftus, 2016 WL 7115967, 2016 U.S. Dist. LEXIS 168713 (D. Mass. 2016). The defendant (Loftus) moved to dismiss a trade secret misappropriation claim based on the new whistleblower provisions in the Defend Trade Secrets Act (DTSA). The defendant was interviewed by Unum’s in-house counsel as part of an internal investigation into claims practices. Later, Loftus entered Unum’s Worcester facility, and was captured on surveillance video leaving the building with two boxes and a briefcase. Loftus was then again seen exiting the building with a shopping bag full of documents. Loftus did not deny that the removed documents contain trade secrets. However, Loftus contended that he is entitled to immunity under the DTSA because he handed Unum’s documents over to his attorney to pursue legal action against Unum for alleged unlawful activities. The district court denied the motion to dismiss because the record lacked facts to support or reject the “immunity” affirmative defense at this stage of litigation. There had been no discovery and Loftus had not filed any potential lawsuit that could be supported by these documents.

VIA Techs., Inc. v. Asus Computer Int’l, 2016 WL 5930280, 2016 U.S. Dist. LEXIS 141581 (N.D. Cal. 2016). The plaintiff identified over 1,000 analog schematics (and an additional 39 digital designs) in its trade secret disclosure required under CUTSA. The defendant objected to this massive alleged trade secret disclosure. The district court reviewed the trade secret disclosure applying the proportionality requirement of F.R.C.P. 26(b) and concluded that it would be impossible for the plaintiff to effectively prosecute over 1,000 alleged trade secret claims or for the defendant to effectively defend the same in a two-week trial and therefore ordered the plaintiff to provide a more reasonable number of alleged trade secrets.


Fraud or Inequitable Conduct

Daniel J. Quirk, Inc. v. Village Car Co., 120 U.S.P.Q.2d 1146 (TTAB 2016). The petitioner, Daniel J. Quirk, Inc. sought to cancel the Village Car’s (the respondent) “QUIRK” and “QUIRK AUTO PARK” trademarks for automobile dealerships on the sole ground of fraud. The TTAB dismissed the petition.

The petitioner’s trademark applications for QUIRK and QUIRK WORKS TO SAVE YOU MONEY were refused based on a likelihood of confusion with the respondent’s marks. In the petitioner’s petition for cancellation of the respondent’s marks, it argued that the application declarations in the respondent’s registrations for QUIRK and QUIRK AUTO PARK were executed fraudulently because the respondent knew of and failed to disclose the petitioner’s allegedly prior superior rights in the QUIRK and QUIRK WORKS TO SAVE YOU MONEY trademarks in connection with automobile dealerships.

The TTAB considered four factors in finding that the respondent did not commit fraud on the PTO. The first factor—whether the petitioner was using the mark QUIRK at the time the respondent signed the oath for its applications—favored of the petitioner. With respect to the second factor, the TTAB found that the petitioner failed to prove that it had superior rights in the mark QUIRK or any QUIRK-formative marks. Regarding the third factor – whether the respondent knew that the petitioner had superior rights in the QUIRK Mark and believed a likelihood of confusion would result or had no basis for believing otherwise – the TTAB found that the evidence showed that the respondent believed that no likelihood of confusion would result from concurrent use of the parties’ marks. Moreover, the TTAB found that the statement in the oath that no one else had the right to use the QUIRK mark in commerce as to be likely to cause confusion was based on an honest belief that the petitioner’s use of marks was limited to intrastate commerce in southern Massachusetts. Thus, the fourth factor—intent to deceive—was not satisfied, since merely the filing of signed applications does not provide an inference of intent to deceive the PTO and the respondent’s president demonstrated candor in communications with PTO.

Thus, the TTAB dismissed the petitioner’s petition for cancellation.

Ornamental Refusal for Repeating Pattern Design

In re Fantasia Distribution, Inc., 120 U.S.P.Q.2d 1137 (TTAB 2016). Fantasia appealed the refusal of registration of its application for a repeating-pattern design for “electronic hookahs.” The design consisted of rows of diamonds, on a lower portion of the device, arranged from larger to smaller rows of diamonds. The examining attorney refused registration on the ground that the design was merely ornamental and did not function as a mark, and that Fantasia’s claim of acquired distinctiveness was insufficient.

The TTAB agreed with the examining attorney’s position that repeating patterns frequently served as an ornamental function to decorate goods and make them more visually appealing. As such, consumers would not consider the repeating patterns as inherently distinctive or as a source identifier. To function as a mark, a pattern must be arbitrary and distinctive to identify and distinguish the source of the goods. The TTAB determined that the repeating diamond pattern gave the hookah devices an attractive appearance, but that the hookah devices were crowded with wording and other design elements such that the diamond pattern did not make a distinct commercial impression as a source identifier. Moreover, Fantasia’s evidence of acquired distinctiveness was not sufficient where the wording and other design elements precluded finding that the diamond pattern alone created a distinct commercial impression. Accordingly, the TTAB affirmed the refusal to register on the ground that the mark was merely ornamental and had not acquired distinctiveness.

Primarily Surname / Likelihood of Confusion

In re Integrated Embedded, 120 U.S.P.Q.2d 1504 (TTAB 2016). Integrated Embedded appealed the refusal of registration of its application for the mark BARR GROUP for computer hardware and software design services. The examining attorney refused registration based on grounds that the mark was primarily a surname and that the mark was likely to cause confusion with a registration for “BARR” in connection with computer and consulting and design services.

During prosecution, the examining attorney for the BARR GROUP application provided evidence regarding Mr. Barr, the co-founder of Integrated and its current CTO. The evidence indicated that Mr. Barr was an active participant in Integrated’s activities, his name appeared in several places on Integrated’s web site, and that consumers were likely to view “BARR” as a surname. With regard to third-party registrations including “BARR,” the TTAB noted that those marks were registered on the Supplemental Register, had claims of acquired distinctiveness or included additional wording or designs that, as a whole, would not be perceived as primarily a surname. Moreover, the addition of the term “GROUP” did not change the surname significance as a whole, and as such the BARR GROUP mark was primarily perceived as a surname.

With regards to the likelihood of confusion refusal, the TTAB determined that while the cited mark for BARR appeared to be a surname and was registered with a claim of acquired distinctiveness, the evidence did not show that the scope of protection was so narrow as to permit registration of a similar mark for related services. After considering the du Pont likelihood of confusion factors, the TTAB determined that the services were largely identical or otherwise related, and would be readily perceived by consumers as being sufficiently related to be offered by a single business. Moreover, the channels of trade, classes of consumers and similarity of the marks in appearance, sound, connotation, and overall commercial impression lead to the conclusion that the BARR GROUP mark was likely to cause confusion with the BARR mark.

Accordingly, the refusal to register the BARR GROUP mark was affirmed.

Use In Commerce Requirement

Christian Faith Fellowship Church v. Adidas AG, 841 F.3d 986, 120 U.S.P.Q.2d 1640 (Fed. Cir. 2016). Christian Faith Fellowship Church appealed the decision of the TTAB cancelling its ADD A ZERO marks on the ground that the Church’s sale of two hats to an out-of-state resident was de minimis and, therefore, did not constitute use in commerce under Lanham Act. The Federal Circuit reversed and remanded.

The Church is located in Illinois and within five miles of the Illinois-Wisconsin border. The Church sold “ADD A ZERO”-marked apparel as part of a fundraising campaign and sold the apparel in its bookstore. In 2005, relying on actual use in commerce, the Church filed two clothing-based trademark applications, which were then registered. In 2009, Adidas sought a clothing trademark for the phrase “ADIZERO,” but the Trademark Office refused the application based on a likelihood of confusion with the Church’s “ADD A ZERO” marks.

Adidas brought an action before the TTAB to cancel the Church’s marks. The TTAB agreed with Adidas’s argument, finding that a cancelled check pre-printed with a Wisconsin home address for the sale of two “ADD A ZERO”-marked hats before the Church applied for its marks did constitute use in commerce, but were de minimis. The Federal Circuit found that the sale of two “ADD A ZERO”-marked hats to an out-of-state resident and, therefore, constitutes “use in commerce” under the Lanham Act. Thus, the Federal Circuit reversed the TTAB’s cancellation of the Church’s “ADD A ZERO” marks and remanded to the TTAB to address Adidas’s other cancellation grounds.

John C. Gatz

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

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