Decisions in Brief

Decisions in Brief

John C. Gatz

©2016. Published in Landslide, Vol. 9, No. 2, November/December 2016, 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

Court Examines DMCA Safe Harbor Provision for Sound Recordings used in Videos

Capitol Records, LLC v. Vimeo, LLC, 119 U.S.P.Q.2d 1110 (2nd Cir. 2016). Vimeo operates a website that allows users to post videos that are then viewable over the internet. Vimeo’s terms of service prohibits users from posting content that infringe on the rights of third parties. Capitol Records sued Vimeo for copyright infringement based on videos posted on Vimeo’s website that contained musical recordings for which Capitol owned the copyright. Vimeo sought the protection of the safe harbor provisions of the DMCA for ISPs in 17 U.S.C. § 512(c). Both sides moved for summary judgment at the district court, and the court granted summary judgment to Capitol on all pre-1972 recordings, ruling that the safe harbor provisions of the DMCA did not apply to those works because they are covered by state copyright laws, not federal copyright laws. The district court granted summary judgment to Vimeo on certain videos where no evidence was presented that any Vimeo employees had viewed the videos, and the district court denied summary judgment to either side on videos where a dispute existed over whether Vimeo had “red flag” knowledge of likely infringement. An interlocutory appeal was granted by the Second Circuit to decide three issues: (1) does the safe harbor provision of 17 U.S.C. § 512(c) apply to pre-1972 sound recordings; (2) does evidence of some viewing of a video that contains a copyrighted sound recording satisfy red flag knowledge to prevent an ISP from qualifying for the safe harbor provisions of the DMCA; and (3) does Vimeo have a general policy of willful blindness for copyright infringement on sound recordings.

As to the first question, the Second Circuit found that to construe § 512(c) as leaving service providers subject to liability under state copyright laws for pre-1972 recordings in postings by users of which the service providers were unaware would defeat the very purpose Congress sought to achieve in passing the statute.

Next, the Second Circuit examined whether Vimeo had red flag knowledge of infringement. The Second Circuit determined that even if a Vimeo employee briefly viewed a video, it would not be obvious that the work infringed the copyright of a sound recording, as the work could be a parody or the recording might be licensed. Notably, an ordinary person is not endowed with specialized knowledge or expertise concerning music or the laws of copyright, and the DCMA makes clear that a service provider’s personnel are under no duty to affirmatively seek indications of infringement. Therefore, Vimeo did not have red flag notice of copyright infringement for any sound recordings based on the record of this case.

The Second Circuit determined that Vimeo’s policies did not demonstrate that it showed willful blindness to the copyright infringement of sound recordings by merely looking at the video content of the posted videos, as an ISP is not required to monitor for infringing activity under 17 U.S.C. § 512(m).

The Second Circuit also qualified that proper allocation of the burden of proof will necessarily have an important bearing on determining entitlements to summary judgment. The Second Circuit agreed that a defendant should, in the first instance, show entitlement to the safe harbor defense by demonstrating its status as a service provider that stores users’ material on its system, that the allegedly infringing matter was placed on its system by a user, and that it has performed precautionary, protective tasks required by § 512 as conditions of eligibility. On the issue of disqualifying knowledge, however, the burden falls on the copyright owner to demonstrate that the service provider acquired knowledge of the infringement, or of facts and circumstances from which infringing activity was obvious, and failed to promptly take down the infringing matter, thus forfeiting its right to the safe harbor.

Supreme Court Evaluates Attorney Fee Decisions in Copyright Case

Kirtsaeng v. John Wiley & Sons, Inc., 136 S.Ct. 1979, 118 U.S.P.Q.2d 1770 (US 2016). Kirtsaeng discovered while a student in the United States. that John Wiley sold English-language textbooks in Thailand that were nearly identical to the U.S.-sold versions but at far lower prices. He began a business by buying Wiley books in Thailand and selling them in the United States. Arguing that this activity violated its right to distribute its books, Wiley sued Kirtsaeng for copyright infringement. The Supreme Court ruled that Kirtsaeng’s actions were allowed by the first-sale doctrine. Kirtsaeng then argued at the district court level that he was owed more than $2 million in attorney fees. The district court and the Second Circuit ruled that Kirtsaeng was not owed attorney fees, mostly because Wiley’s defense was deemed objectively reasonable (given that several Courts of Appeals agreed with Wiley’s position).

Here, in its evaluation of Section 505 of the Copyright Act, which addresses awards of attorney fees, the Supreme Court reiterated that the decision to award fees involves a “particularized case-by-case assessment,” and that a district court may not award fees as a matter of course. The Court evaluated Wiley’s position that a party with an objectively reasonable position should not be penalized by an attorney fee decision as opposed to Kirtsaeng’s position that “special consideration” should be given to “whether a lawsuit resolved an important and close legal issue and thus ‘meaningfully clarified’ copyright law” (citing Kirtsaeng’s brief). The Court ultimately appeared to side with Wiley’s position, and sent the case back to the district court with the instruction that the court should give “substantial weight to the reasonableness of Wiley’s litigating position, but also tak[e] into account all other relevant factors.”

PATENTS

Claim Construction

Howmedica Osteonics Corp. v. Zimmer, Inc., 822 F.3d 1312, 119 U.S.P.Q.2d 1290 (Fed. Cir. 2016). The Federal Circuit affirmed the final judgment of noninfringement from the district court. The Federal Circuit agreed with the claim constructions of the district court, and because the parties and the district court appeared to be in agreement that the construction of the terms on appeal was dispositive, the Federal Circuit affirmed.

Indacon, Inc. v. Facebook, Inc., ______, 118 U.S.P.Q.2d 1780 (Fed. Cir. 2016). The Federal Circuit affirmed the district court’s construction of four terms. Relying on an express definition in the specification, the Federal Circuit found that the term “alias” did not encompass graphical expression but was limited to textual expression. Finding that the remaining three terms lacked an ordinary meaning in the art, the Federal Circuit refused to construe these terms broader than the disclosure in the specification.

In re Man Mach. Interface Techs. LLC, 822 F.3d 1282, 118 U.S.P.Q.2d 1615 (Fed. Cir. 2016). The Federal Circuit rejected the PTAB’s claim construction for a narrower construction. The Federal Circuit also reversed the PTAB’s finding of anticipation based on the narrower construction. However, even with the narrower construction, the Federal Circuit upheld the PTAB’s finding of obviousness.

Ruckus Wireless, Inc. v. Innovative Wireless Sols., LLC, 824 F.3d 999, 118 U.S.P.Q.2d 1735 (Fed. Cir. 2016). The Federal Circuit affirmed the district court’s claim constructions and final judgment of noninfringement based thereon.

SAS Inst., Inc. v. ComplementSoft, LLC, _____, 119 U.S.P.Q.2d 1031 (Fed. Cir. 2016). The Federal Circuit affirmed some of the PTAB’s claim construction rulings, but disagreed with the PTAB’s approach in one claim construction, arguing that the PTAB changed theories midstream and that the new claim construction did not give the parties proper notice as to the final construction and, thus, this determination to one of the claims was vacated and remanded.

Claim Construction/Summary Judgment

Profectus Tech. LLC v. Huawei Techs. Co., 823 F.3d 1375, 119 U.S.P.Q2d 1188 (Fed. Cir. 2016). The Federal Circuit affirmed the district court’s claim construction of the term “mountable” and subsequent summary judgment of non-infringement.

Design Patents

Sport Dimension, Inc. v. Coleman Co., _____, 118 U.S.P.Q.2d 1607 (Fed. Cir. 2016). The Federal Circuit vacated the district court’s claim construction, finding that the construction should not have entirely eliminated certain features of the design. Even though those features may be functional, they may still have ornamental aspects within them. The Federal Circuit upheld the district court’s exclusion of an expert witness based upon his lack of expertise with the devices in suit.

Divided Infringement

Mankes v. Vivid Seats Ltd., 820 F.3d 1316, 119 U.S.P.Q.2d 1247 (Fed. Cir. 2016). The Federal Circuit vacated and remanded the district court’s granting of the defendants’ motions for judgment on the pleadings, which were based on prevailing divided infringement law. During the plaintiff’s appeal, the en banc Federal Circuit vacated its decision in Akamai Techs., Inc. v. Limelight Networks, Inc., and rendered a new decision that, in effect, expanded joint direct infringement.

Doctrine of Equivalents

Akzo Nobel Coatings, Inc. v. Dow Chem. Co., 811 F.3d 1334, 119 U.S.P.Q.2d 1013 (Fed. Cir. 2016). The Federal Circuit affirmed the district court’s finding of noninfringement and determination that the claims are not indefinite. After affirming the district court’s claim construction, the Federal Circuit found no infringement.

Intendis GmbH v. Glenmark Pharm. Inc., 822 F.3d 1355, 119 U.S.P.Q.2d 1200 (Fed. Cir. 2016). The Federal Circuit affirmed the district court’s judgment of validity and infringement under the doctrine of equivalents. For the doctrine of equivalents analysis, the Federal Circuit rejected an argument that the function in the function-way-result test must be in the intrinsic record. Rather, the relevant inquiry is what the function is to one skilled in the art, and extrinsic evidence can be used in that analysis.

Enhanced Damages

Halo Elecs., Inc. v. Pulse Elecs., Inc., 136 S.Ct. 1923, 118 U.S.P.Q.2d 1761 (U.S. 2016). The Supreme Court overturned the Federal Circuit’s two-part test under In re Seagate Technology, LLC, 497 F.3d 1360 (Fed. Cir. 2007), for awarding enhanced damages for willful infringement pursuant to 35 U.S.C. § 284. Section 284 provides that, in a case of infringement, courts “may increase the damages up to three times the amount found or assessed.” To obtain enhanced damages under Seagate, a patent owner first had to “show by clear and convincing evidence that the infringer acted despite an objectively high likelihood that its actions constituted infringement of a valid patent,” and then, also by clear and convincing evidence, demonstrate that the risk of infringement “was either known or so obvious that it should have been known to the accused infringer.” Overruling the Seagate test as inconsistent with Section 284, the Court held that, in deciding whether to award enhanced damages, and in what amount, courts must exercise their discretion, “tak[ing] into account the particular circumstances of each case,” and should generally reserve enhancement “for egregious cases typified by willful misconduct.”

Induced Infringement

Warsaw Orthopedic, Inc. v. NuVasive, Inc., _____, 118 USPQ2d 1792 (Fed. Cir. 2016). Following the Supreme Court’s vacatur and remand subsequent to its decision in Commil USA, LLC v. Cisco Systems, Inc., the Federal Circuit reaffirmed the district court’s judgment of Medtronic’s induced infringement of a patent directed to a method for detecting the presence of and measuring the distance to a nerve during surgery. Characterizing Medtronic’s arguments as a request for a revised claim construction that it never sought, the Federal Circuit found that the undisputed evidence showed Medtronic’s non-infringement position to be objectively unreasonable in view of the district court’s claim constructions. Thus, Medtronic must have known that doctors using its accused device, as directed by Medtronic, satisfied the limitations of the asserted patent’s claims.

Infringement

David Netzer Consulting Eng’r LLC v. Shell Oil Co., 824 F.3d 989, 118 U.S.P.Q.2d 1701 (Fed. Cir. 2016). The Federal Circuit affirmed the district court’s grant of summary judgment of noninfringement after affirming the claim construction and that Shell’s process did not literally meet the claim limitations.

Inter Parte

Genzyme Therapeutics Prods. LP v. Biomarin Pharm. Inc., _____, 119 U.S.P.Q.2d 1022 (Fed. Cir. 2016). The Federal Circuit affirmed the PTAB’s decision that challenged claims would have been obvious. The patentee argued the PTAB’s decision violated the requirements of notice in an inter partes review because the PTAB relied upon references not cited in the original institutional decisions. The Federal Circuit disagreed, stating “the introduction of new evidence in the course of the trial is to be expected in inter partes review trial proceedings and, as long as the opposing party is given notice of the evidence and an opportunity to respond to it, the introduction of such evidence is perfectly permissible under the APA.”

In re Aqua Prods., Inc., 823 F.3d 1369, 118 U.S.P.Q.2d 1776 (Fed. Cir. 2016). The Federal Circuit affirmed the PTAB’s denial of Aqua’s motion to amend during inter partes review. First, the Federal Circuit rejected Aqua’s argument that placing the burden on the patentee for a motion to amend was unsupported by statute, stating that prior Federal Circuit cases had already upheld the present burden placement for motions to amend as complying with the AIA’s statutory framework. Second, the Federal Circuit upheld the PTAB’s disregard of Aqua’s arguments in support of its amended claims, because Aqua based these arguments on mere passing references to arguments Aqua had made in other filings, and that Aqua’s motion to amend, instead, should have featured all arguments Aqua intended to raise related to its proposed amendments.

Jurisdiction

In re Arunachalam, 824 F.3d 987, 118 U.S.P.Q.2d 1640 (Fed. Cir. 2016). The Federal Circuit dismissed the appeal for lack of jurisdiction. Under 28 U.S.C. §1295(a)(4)(A), the Federal Circuit has exclusive jurisdiction over an appeal from a “decision” of the PTAB. The Federal Circuit lacks jurisdiction to hear a nonfinal appeal from the PTO where the last action was a final rejection by the examiner in a reexamination proceeding.

Cuozzo Speed Techs., LLC v. Lee, 136 S.Ct. 2131, 119 U.S.P.Q.2d 1065 (U.S. 2016). The Supreme Court held that 35 U.S.C. § 314(d) bars Cuozzo’s challenge to the PTO’s decision to institute inter partes review. The Court further held that the PTO’s regulation requiring the PTAB to apply the broadest reasonable construction standard to interpret patent claims is a reasonable exercise of the rulemaking authority granted to the PTO by statute.

Laches

Lismont v. Alexander Binzel Corp., 813 F.3d 998, 119 U.S.P.Q.2d 1105 (Fed. Cir. 2016). The Federal Circuit affirmed the district court’s conclusion that the presumption of laches applies against Mr. Lismont’s claim that he was an inventor of the patent, where the inventorship claim was filed 10 years after the patent issued.

Obviousness

Allied Erecting & Dismantling Co. v. Genesis Attachments, LLC, 119 U.S.P.Q.2d 1132 (Fed. Cir. 2016). The Federal Circuit affirmed the PTAB’s decision that the asserted claims lacked novelty and were obvious. The Federal Circuit determined that substantial evidence supported the PTAB’s finding of a motivation to combine the references used to find obviousness even though the suggested modification to the one reference would entail design and structural changes.

Black & Decker, Inc. v. Positec USA, Inc., 118 U.S.P.Q.2d 1717 (Fed. Cir. 2016). The Federal Circuit affirmed-in-part and reversed-in-part the PTAB’s finding that certain claims were not obvious, and that others were obvious, respectively. Substantial evidence supported the PTAB’s finding that the applied reference did not disclose the claim limitation and therefore the PTAB’s finding of nonobviousness with respect to certain claims was affirmed. Substantial evidence, however, did not support the PTAB’s finding of obviousness with respect to the other claims and, thus, all claims at issue were determined not to be obvious.

Obviousness/Inter partes review

Intelligent Bio-Sys., Inc. v. Illumina Cambridge Ltd., 821 F.3d 1359, 119 U.S.P.Q.2d 1171 (Fed. Cir. 2016). The Federal Circuit affirmed the PTAB’s finding that IBS failed to demonstrate, by a preponderance of the evidence, the obviousness of claims for labeling DNA nucleotides. First, the Federal Circuit affirmed the PTAB’s finding of no motivation to combine the references because the proposed combination would have performed inefficiently, thereby further diminishing any motivation to combine. Second, the Federal Circuit affirmed the PTAB’s disregard for a new argument IBS included in its reply brief, explaining how the expedited nature of inter partes review obligated petitioners to make their full case in their petitions, and how petitioners should avoid relying on new arguments on reply.

On-Sale Bar

Merck & Cie v. Watson Labs., Inc., 822 F.3d 1347, 118 U.S.P.Q.2d 1562 (Fed. Cir. 2016). The Federal Circuit reversed the district court’s holding that the claim was not invalid under the on-sale bar. The Federal Circuit reiterated the standards for determining when the on-sale bar is triggered – when the invention is: (1) ready for patenting; and (2) the subject of a commercial offer for sale prior to the critical date. Based on the actions of the patentee and the third party purchaser, a fax qualified as an offer for sale. An offer for sale is sufficient to raise the on-sale bar, even if the sale is never consummated.

Patent-Eligible Subject Matter

BASCOM Glob. Internet Servs. V. AT&T Mobility, LLC, ______, 119 U.S.P.Q.2d 1236 (Fed. Cir. 2016). The Federal Circuit vacated and remanded the district court’s granting of the motion to dismiss for failure to state a claim on the ground that the claims were invalid under 35 U.S.C. § 101. Although the Federal Circuit agreed that the claims were directed to an abstract idea, the Federal Circuit found that BASCOM adequately alleged that the claims had been transformed into patent-eligible subject matter.

Enfish, LLC v. Microsoft Corp., 822 F.3d 1327, 118 U.S.P.Q.2d 1684 (Fed. Cir. 2016). The Federal Circuit provided additional clarification in determining whether a claim has patent-eligible subject matter. In holding claims to a self-referential table for a computer database were eligible, the Federal Circuit found it relevant to ask whether the claims are directed to an improvement to computer functionality versus being directed to an abstract idea, even at the first step of the Alice analysis. Because the claims improve upon and function differently from conventional database structures, the Federal Circuit did not proceed to the second step of Alice.

TLI Communications LLC 2 v. AV Auto., LLC, 823 F.3d 607, 118 U.S.P.Q.2d 1744 (Fed. Cir. 2016). The Federal Circuit affirmed the district court’s dismissal of the complaint on the ground that the patent failed to claim patent-eligible subject matter under 35 U.S.C. § 101. The Federal Circuit agreed with the district court that the patent claims no more than the abstract idea of classifying and storing digital images in an organized manner.

Priority

Immersion Corp. v. HTC Corp., _____, 119 U.S.P.Q.2d 1083 (Fed. Cir. 2016). The Federal Circuit reversed the district court’s holding and remanded the case for further interpretation of 35 U.S.C. § 120. The Federal Circuit held an application may be “filed before the patenting” of an earlier application when both legal acts, filing and patenting, occur on the same day. Thus, the filed patent application was deemed to be a continuation of the earlier application, and has the earlier application’s filing date.

Standing

Agilent Techs., Inc. v. Waters Techs. Corp., 811 F.3d 1326, 119 U.S.P.Q.2d 1089 (Fed. Cir. 2016). The Federal Circuit dismissed Aligent’s appeal for lack of standing. Aligent sought review of a final decision of the PTAB in an inter partes reexamination. While Aligent may have been a privy of the third-party requester, 35 U.S.C. § 141 confers a right to appeal only to the patent owner and third-party requester of the reexamination, not privies of third-party requesters.

Diamond Coating Techs., LLC v. Hyundai Motor Am., 823 F.3d 615, 119 U.S.P.Q.2d 1196 (Fed. Cir. 2016). Under a de novo standard of review, the Federal Circuit affirmed the district court’s finding that the plaintiff Diamond did not have patentee status and thus lacked standing. The Federal Circuit found that Sanyo’s assignment of the asserted patents to Diamond failed to convey all substantial rights in the asserted patents because: (1) Diamond did not have the right to practice the asserted patents; and (2) Sanyo retained significant control over Diamond’s enforcement and litigation activities relating to the asserted patents. The Federal Circuit also held that Diamond’s attempt to cure the assignment deficiencies through a nunc pro tunc agreement with Sanyo were not sufficient to confer retroactive patentee status.

Venue

In re TC Heartland LLC, 821 F.3d 1338, 118 U.S.P.Q.2d 1591 (Fed. Cir. 2016). The Federal Circuit denied the accused patent infringer’s writ of mandamus to either dismiss infringement action or transfer it to another district court.

TRADE SECRETS

Allied Waste Servs. of N. Am., LLC v. Tibble, 2016 U.S. Dist. LEXIS 47447, 2016 WL 1441449 (N.D. Ill. 2016). In seeking to dismiss the trade secret misappropriation claim, Tibbie argued that Allied must plead something more than its mere fear of disclosure of confidential information. Under a theory of inevitable disclosure, however, a plaintiff need not point to concrete evidence of misappropriation. A plaintiff must merely allege that the employee cannot operate without inevitably disclosing the confidential information. Allied did at least this much. Therefore, the district court declined to dismiss Allied’s claim.

Babcock & Wilcox Co. v. Areva NP, Inc, 2016 Va. LEXIS 103, 2016 WL 3610784 (Va. 2016). Under the UTSA, misappropriation is a defined term and includes unauthorized acquisition, use, and disclosure. Thus, by definition, misappropriation of a trade secret can only occur when acquisition, disclosure, or use is not authorized.

Capricorn Mgmt. Sys. v. Gov’t Emples. Ins. Co., 2016 U.S. Dist. LEXIS 46584, 2016 WL 1370937 (E.D.N.Y. 2016). Finally, contrary to GEICO’s assertions, to the extent the software implements well-known and common requirements of the insurance industry, it does have economic value. The fact that the requirements are well-known is not the relevant benchmark. It is the software’s proprietary methods for processing large amounts of data required to be processed by those well-known and common requirements that provides economic value.

Hipcricket, Inc. v. mGage, LLC, 2016 Del. Ch. LEXIS 105, 2016 WL 3910837 (Del. Ch. 2016). The proper remedy for the defendants’ trade secret misappropriation is the entry of a permanent injunction that bars the defendants from making any further use of the plaintiff’s trade secrets under the Washington UTSA. The parties were directed to confer on an appropriate form of implementing an order that addresses all protected trade secrets without infringing on the defendant’s ability to compete in the ordinary course of business. The defendants may apply to the court for termining the injunction when the relevant trade secrets cease to exist.

USA Power, LLC v. PacifiCorp, 235 P.3d 749 (Utah 2016). Under the Utah UTSA, if willful and malicious misappropriation exists, the court may award reasonable attorneys’ fees to the prevailing party. As with an award of exemplary damages, the permissive language of the statute allows a court to award fees in its discretion. The court may use its discretion to determine both whether an award of attorney fees should be made and, if so, what the amount should be. Thus, as with exemplary damages, a trial court’s conclusion as to what constitutes a reasonable attorney fee award is reviewed for an abuse of discretion so long as the trial court has employed the proper standard.

WebDiet, Inc. v. NutriSystem, Inc., 2016 Phila. Ct. Com. Pl. LEXIS 133 (Pa. C.P. 2016). This case involved allegations of breach of contract and misappropriation of trade secrets by WebDiet. The defendant, NutriSystem, moved for summary judgment on the ground that the trade secret misappropriation claim was barred by the statute of limitations. The dispositive fact was the introduction of NutriSystem’s diet app (working with another vendor in February 2010 more than three years before the lawsuit was filed). Website failed to exercise reasonable diligence. The motion for summary judgment was granted because WebDiet’s claims were time-barred.

TRADEMARKS

Genericness

In re Cordua Rests., Inc., 823 F.3d 594, 118 U.S.P.Q.2d 1632 (Fed. Cir. 2016). Cordua appealed the TTAB’s ruling refusing registration of the stylized mark, CHURRASCOS, for “bar and restaurant services; catering” on the basis that the mark was merely descriptive and generic for the applied-for services.

Finding that an existing registration owned by Cordua for the CHURRASCOS word mark did not preclude a finding that the stylized form of the mark was generic, the Federal Circuit applied the two-step test for genericness. First, the Federal Circuit determined that the genus of services was the services set forth in the application, as understood by the restaurant-going public, not Cordua’s own restaurants. Thus, “restaurant services” was the relevant genus.

Next, the Federal Circuit addressed whether the term “churrascos” was generic for restaurant services generally. The TTAB found that, because the term “churrascos” was a generic term for a type of cooked meat, “churrascos” was a generic term for a restaurant featuring churassco steaks. While Cordua tried to argue that “churrascos” referred to a style of grilling meat and not to restaurant services, the Federal Circuit found that the restaurant-going public understood the term “churrascos” to refer to a type of restaurant (featuring churrasco steaks) as well as a dish. Moreover, the addition of the letter “S” at the end of CHURRASCOS did not make the term nongeneric, nor did the display of Cordua’s mark in stylized letters make the applied-for mark registrable, since the stylized mark did not create a separate commercial impression apart from the generic term “churrascos.”

Thus, the Federal Circuit affirmed the refusal of registration based on genericness, and did not reach the alternate issue of descriptiveness.

Likelihood of Confusion

Oakville Hills Cellar, Inc. v. Georgallis Holdings, LLC, 119 U.S.P.Q.2d 1286 (Fed. Cir. 2016). Oakville appealed from the TTAB’s decision dismissing the opposition of an application filed by Georgallis to register its MAYARI mark for use on wine on the ground that the applicant’s MAYARI mark is sufficiently dissimilar to the opposer’s registered MAYA mark, also for use on wine. Finding that substantial evidence supported the TTAB’s finding that the marks are sufficiently dissimilar, the Federal Circuit affirmed.

The TTAB found that the DuPont factors of (1) the similarity of the goods; (2) the similarity of trade channels; and (3) the conditions under which and buyers to whom sales are made favored a likelihood of confusion. The TTAB, however, found that the DuPont factor of the similarity of the marks favored a finding of no likelihood of confusion and the remaining factors were neutral. The Federal Circuit concluded that substantial evidence supported the TTAB’s finding that the marks were sufficiently dissimilar as to appearance, sound, meaning, and commercial impression. It agreed with the TTAB’s determination that there was insufficient evidence that consumers would perceive MAYARI as MAYA – and – RI. It also found that the TTAB did not err in finding that there was no evidence that the marks would be pronounced alike. Furthermore, the Federal Circuit noted that substantial evidence supported the TTAB’s finding that MAYA is a familiar word, whereas MAYARI has no recognized meaning to U.S. consumers.

The Federal Circuit thus concluded that the TTAB did not err in balancing all relevant DuPont factors and in determining that the dissimilarity of the marks was sufficient to preclude a likelihood of confusion.

Nonuse

Ashland Licensing & Intellectual Prop. LLC v. Sunpoint Int’l Grp. USA Corp., 119 U.S.P.Q.2d 1125 (TTAB 2016). The TTAB found that a petition to cancel a trademark registration filed when the subject registration was less than five years old tolled the five-year bar set forth in Trademark Act Section 14, 15 U.S.C. § 1064, for the purpose of amending the petition.

Within five years of issuance of the respondent’s two trademark registrations, the petitioner filed a petition to cancel the registrations on the grounds of likelihood of confusion and abandonment. Later, after the five year post-registration window for the respondent’s registrations had passed, the petitioner filed a renewed motion to amend by adding a claim for nonuse. The respondent opposed the motion, contending that Section 14 bars adding the proposed new claim of nonuse against its registrations, which issued more than five years ago at the time the motion to amend was filed.

The TTAB applied the standard for adding counterclaims in an opposition proceeding, finding that so long as the cancellation proceeding commenced within five years of the date of registration, the five-year limitation under Trademark Act Section 14 is tolled for the purpose of adding claims against the registration by that petitioner. It held that a petitioner who learns of further grounds for cancellation and acts without undue delay may seek to add those grounds, even if the subject registration has passed its fifth anniversary during the pendency of the cancellation proceeding. The TTAB also found that the petitioner did not unduly delay the bringing of its motion to amend the petition to cancel and that its claim (though legally insufficient) was not legally futile.

Thus, the TTAB granted the petitioner’s motion to amend the consolidated petition to add the nonuse claim to the extent that the petitioner was allowed to replead its claim.

Specimen of Use

In re WAY Media, Inc., 118 U.S.P.Q.2d 1697 (TTAB 2016). WAY Media appealed the refusal of registration of its application for the mark WORLD’S BIGGEST SMALL GROUP for, among other services, “radio broadcasting services; radio broadcasting; radio program broadcasting; internet broadcasting services; broadcasting radio programs via the internet; broadcasting of music via the internet, namely, delivery of digital music by electronic transmission; streaming of audio material on the internet; providing a website over a global computer network featuring information on radio broadcasting.” The examining attorney refused registration for the broadcasting services based on the failure of the specimen to show use of the mark in connection with the broadcasting services.

WAY Media provided separate submissions of specimens, including pages from the WAY Media web site and a screen capture from You Tube, as advertisements of its broadcasting services and as use of the mark in the course of rendering broadcasting services. The applicant argued that the specimens specified (1) the radio’s call letters, WAY-FM; (2) the ability to listen to the radio broadcast live or by streaming; and (3) images of the radio broadcasting occurring. Moreover, the You Tube screen capture showed the image of a broadcast booth environment.

Finding that none of the specimens submitted explicitly referenced broadcasting services, the TTAB determined that there was a lack of association between the WORLD’S BIGGEST SMALLEST GROUP mark and the applied-for services. In particular, the TTAB found that consumers would associate the list of “Menu Options,” including to “Listen,” positioned under the WAY-FM call letters, with the call letters rather than the WORLD’S BIGGEST SMALLEST GROUP mark. Also, the TTAB found that the mark appeared to refer to a program involving bible reading, and not the broadcasting services. Regarding the You Tube specimen, neither the use of the mark as a caption to a video, nor the presence of a microphone in the background of a screen capture, constituted a sufficient reference to broadcasting services. Thus, the TTAB affirmed the refusal to register WAY Media’s mark for broadcasting services.

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; Michael N. Spink, Brinks, 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.