Consumer Health argued that the suit was still valid under the separate-accrual rule, in which each separate act of infringement starts a new limitations period. The district court cited a Ninth Circuit decision stating that the separate-accrual rule pertaining to infringement does not apply to ownership claims, which accrue at the time that the ownership dispute becomes explicit. The Seventh Circuit agreed with the district court, stating disputes about copyright ownership accrue only once.

Court Examines DMCA Safe Harbor Provision for Celebrity Photos

BWP Media USA, Inc. v. Clarity Digital Grp., LLC, 820 F.3d 1175, 118 U.S.P.Q.2d 1433 (10th Cir. 2016). BWP owns the copyright to many photographs of celebrities, including photos that were posted without permission on the Examiner.com website that is operated by the defendant AXS. AXS sought protection of the safe harbor provision for ISPs of the DMCA as provided in 17 U.S.C. § 512(c). AXS utilizes independent contractors to provide all the content for the Examiner.com website, and argued that this made AXS an ISP who could utilize the safe harbor provision of the DMCA. The district court ruled that AXS was an ISP entitled to the protection of the safe harbor provision of the DMCA. BWP appealed.

The Tenth Circuit affirmed. The Tenth Circuit first interpreted the term user in § 512 should have its plain meaning as “a person or entity who avails itself of the service provider’s system or network to store material.” The Tenth Circuit rejected BWP’s argument that a user should exclude anyone compensated by an ISP, such as the independent contractors that provided content to AXS for use on the Examiner.com. The Tenth Circuit found that the key limitation to the safe harbor is that the ISP must not direct the storage of the infringing content, and if an ISP encourages infringement by urging users to upload and download copyrighted works, the safe harbor provisions of the DMCA will not apply. The Tenth Circuit found that AXS did not direct the independent contractors to post copyrighted materials, as the contracts specifically prohibited this behavior, and AXS had licensed celebrity photos available for use by the contractors. The Tenth Circuit also found that AXS did not have actual or circumstantial knowledge of the infringement, so the safe harbor provision of the DMCA was available to AXS as an ISP.

PATENTS

Claim Construction

Clare v. Chrysler Grp. LLC, 819 F.3d 1323, 118 U.S.P.Q.2d 1424 (Fed. Cir. 2016). The Federal Circuit affirmed the district court’s grant of summary judgment of non-infringement. The Federal Circuit agreed with the district court’s claim construction and conclusion that no reasonable juror could have found infringement.

PPC Broadband, Inc. v. Corning Optical Communications RF, LLC, 815 F.3d 747, 118 U.S.P.Q.2d 1056 (Fed. Cir. 2016). The Federal Circuit vacated and remanded the PTAB’s finding of obviousness in an IPR due to an erroneous claim construction of the term “reside around”. In giving the claims their broadest reasonable interpretation, the PTAB simply referenced dictionary definitions without considering the claims in light of the specification.

SimpleAir, Inc. v. Sony Ericsson Mobile Communications. AB, 820 F.3d 419, 118 U.S.P.Q.2d 1451 (Fed. Cir. 2016). The Federal Circuit held that the district court erred in constructing the phrases “a data channel” and “whether said devices are online or offline from a data channel associated with each device” and concluded no reasonable jury could find infringement under the correct constructions. The jury verdict was vacated and remanded.

Claim Construction/Assignee Estoppel

MAG Aero. Indus. v. B/E Aero., Inc., 816 F.3d 1374, 118 U.S.P.Q.2d 1378 (Fed. Cir. 2016). The Federal Circuit affirmed the district court’s summary judgment of noninfringement and that the doctrine of assignor estoppel barred defendant from arguing that the asserted patents were invalid. Regarding assignor estoppel, the district court found that the defendant (1) hired one of the inventors of the patent specifically to design the accused products; (2) used his knowledge to conduct the relevant activities, and (3) this inventor he was a vice president of the division who manufactured the product.

Equitable Estoppel

High Point SARL v. Sprint Nextel Corp., 817 F.3d 1325, 118 U.S.P.Q.2d 1365 (Fed. Cir. 2016). The Federal Circuit affirmed the district court’s grant of summary judgment that equitable estoppel barred the lawsuit. Three elements must be established to find equitable estoppel: (1) the patentee, through misleading conduct (or silence), leads the alleged infringer to reasonably infer that the patentee does not intend to enforce its patent against the alleged infringer; (2) the alleged infringer relies on that conduct; and (3) the alleged infringer will be materially prejudiced if the patentee is allowed to proceed with its claim. The alleged infringer met all of these elements.

Estoppel

HP Inc. v. MPHJ Tech. Invs., LLC, 817 F.3d 1339, 118 U.S.P.Q.2d 1438 (Fed. Cir. 2016). The Federal Circuit affirmed its earlier holdings that noninstituted grounds considered to be redundant in an IPR petition are not considered as having been raised in the IPR, and thus, estoppel under 35 U.S.C. § 315(e)(1) does not attach to those noninstituted grounds. The decision to not institute grounds is not reviewable.

Indefiniteness

UltimatePointer, LLC v. Nintendo Co., 816 F.3d 816, 118 U.S.P.Q.2d 1125 (Fed. Cir. 2016). The Federal Circuit upheld the judgment of noninfringement and reversed the determination of indefiniteness. Regarding indefiniteness, the Federal Circuit agreed with the patentee that certain claims were not invalid as indefinite, as the claims reflected the capability of the claimed apparatus and do not reflect activities of the user.

Inequitable Conduct

The Ohio Willow Wood Co. v. Alps South, LLC, 813 F.3d 1350, 118 U.S.P.Q.2d 1094 (Fed. Cir. 2016). The Federal Circuit affirmed the district court’s finding of inequitable conduct as to the second reexamination, but not the first. During the second reexamination, the patentee’s director of R&D knew of evidence that was not submitted to the PTO. Although this evidence may not have proven that a prior art device was on-sale before the bar date, it would have corroborated testimony to that fact and was therefore material to patentability. The PTAB (during reexamination) found corroboration to be the dispositive issue.

Infringement

Eon Corp. IP Holdings LLC v. Silver Spring Networks, Inc., 815 F.3d 1314, 118 U.S.P.Q.2d 1013 (Fed. Cir. 2016). The Federal Circuit agreed with the defendant and reversed the district court for failing to interpret the terms “portable” and “mobile”, which impermissibly delegated a disputed claim construction issue to the jury. Interpreted properly, no reasonable jury could have found infringement.

Infringement/Validity/Claim Construction

Apple Inc. v. Samsung Elecs. Co., 816 F.3d 788, 118 U.S.P.Q.2d 1168 (Fed. Cir. 2016). In the third appeal, the Federal Circuit reversed the district court’s denial of Samsung’s JMOL of non-infringement, finding that Apple failed to prove infringement for one of its five asserted patents. The Federal Circuit also reversed the district court’s denial of Samsung’s JMOL of invalidity, finding that two of Apple’s asserted patents would have been obvious. The Federal Circuit noted that “mere disclosure of more than one alternative” in the prior art does not amount to teaching away, particularly when the prior art does not criticize, discredit, or otherwise discourage the solution presented, and also that a motivation to use the teachings of a particular prior art reference need not be supported by a finding that the feature is preferred, or the most desirable. The Federal Circuit affirmed the non-infringement rulings for the remaining two Apple patents and the non-infringement ruling for one of Samsung’s two asserted patents. The Federal Circuit also affirmed the judgment that Samsung’s remaining asserted patent was infringed.

Inter Partes Review/Jurisdiction

Dell v. Acceleron, LLC, 818 F.3d 1293, 118 U.S.P.Q.2d 1353 (Fed. Cir. 2016). The Federal Circuit addressed three PTAB IPR findings. First, the Federal Circuit affirmed various findings of no invalidity, indicating that Acceleron’s expert explained that a prior art reference failed to disclose the act of booting web server cards either from a network attached storage or through use of that storage to boot those server cards. The PTAB had no contrary evidence. Second, in reversing one of the PTAB’s claim constructions, the Federal Circuit commented how the PTAB failed to give any substantial meaning to the phrase “remotely pull” and that this ran afoul of claim construction principles requiring that all claim terms be afforded meaning and of supporting sections in the specification. Third, the Federal Circuit reversed an anticipation finding because Dell did not identify the relied-upon structure of the prior art reference as meeting the determinative claim limitation until oral argument before the PTAB. This denied Acceleron its procedural rights.

Harmonic Inc. v. Avid Tech., Inc., 815 F.3d 1356, 118 U.S.P.Q.2d 1198 (Fed. Cir. 2016). The Federal Circuit affirmed the PTAB’s finding of non-obviousness for certain claims and determined that it lacked jurisdiction to address the PTAB’s decision not to institute based on redundancy. With the finding of non-obviousness, the petitioner wanted its other grounds considered, but the Federal Circuit found that it does not have jurisdiction to decide the issue of whether it was proper for the PTAB not to institute based on redundancy.

Shaw Indus. Grp., Inc. v. Automated Creel Sys., Inc., 817 F.3d 1293, 118 U.S.P.Q.2d 1316 (Fed. Cir. 2016). The notable issues were: (1) whether the PTAB erred in denying, as redundant, one of fifteen grounds of rejection presented in Shaw’s IPR petition; and (2) whether the PTAB should have barred an IPR under 35 U.S.C. § 315(b). While noting that it did not necessarily agree with the PTAB’s handling of the issue, the Federal Circuit found that it lacked jurisdiction to review the redundancy decision. The Federal Circuit explained that it lacked jurisdiction to review the PTAB’s decision that Shaw’s IPR petition was not barred under § 315(b), reasoning that it was precluded from reviewing the issue under § 314(d) as a PTAB decision on whether to institute IPR.

Obviousness

In re Cree, Inc., 818 F.3d 694, 118 U.S.P.Q.2d 1253 (Fed. Cir. 2016). The Federal Circuit affirmed the PTAB’s holding that various claims were obvious. The Federal Circuit found substantial evidence supported the PTAB’s conclusion. The Federal Circuit also found that the PTAB did not improperly reject the secondary evidence of non-obviousness. Praise from researchers about their own work did not have the same reliability as praise from a competitor. Evidence of licensing that lacked a sufficient nexus to the patent did not support a finding of non-obviousness.

PPC Broadband, Inc. v. Corning Optical Communications RF, LLC, 815 F.3d 734, 118 U.S.P.Q.2d 1062 (Fed. Cir. 2016). The Federal Circuit affirmed the PTAB’s decision that certain claims were obvious, but vacated on other claims, thus remanding the case for further proceedings.

Pride Mobility Prods. Corp. v. Permobil, Inc., 818 F.3d 1307, 118 U.S.P.Q.2d 1549 (Fed. Cir. 2016). The Federal Circuit reversed-in-part and affirmed-in-part the PTAB’s cancellation of all challenged claims for obviousness. The Federal Circuit found that the PTAB’s sole basis for its claim construction did not reasonably support a departure from the claim language and specification. Thus, the Federal Circuit reversed the PTAB’s cancellation of the claim. As to all the other claims, the Federal Circuit affirmed the PTAB’s decision, and found sufficient evidence supported the obviousness determination.

Patent Agent Privilege

In re Queen’s Univ., 820 F.3d 1287, 118 U.S.P.Q.2d 1221 (Fed. Cir. 2016). The Federal Circuit granted the writ of mandamus directing the district court to withdraw its order compelling production of Queen’s University’s communications with its non-attorney patent agents on the grounds that the communications were privileged. The Federal Circuit concluded that mandamus review of the district court’s discovery order appeared appropriate, as Queen’s University failed to produce documents containing communications with its patent agents on the assertion of privilege. The Federal Circuit recognized the existence of a privilege between a patent agent and the client.

Patentability

Blue Calypso, LLC v. Groupon, Inc., 815 F.3d 1331, 118 U.S.P.Q.2d 1035 (Fed. Cir. 2016). The Federal Circuit affirmed-in-part and reversed-in-part the PTAB decision regarding whether Blue Calypso’s patents are “covered business method” patents and obvious in view of the prior art. The Federal Circuit affirmed that the claims are directed to methods in which advertisers financially induce subscribers to assist their advertising efforts, and thus, found the PTAB’s reasoning was not arbitrary or capricious and was supported by substantial evidence. The Federal Circuit further found that the PTAB’s finding on anticipation was supported by substantial evidence. However, the Federal Circuit reversed on the finding of invalidity on written description grounds.

Genetic Techs. Ltd. V. Merial L.L.C., 818 F.3d 1369, 118 U.S.P.Q.2d 1541 (Fed. Cir. 2016). The Federal Circuit affirmed the district court’s grant of appellees’ motions to dismiss for failure to state a claim because the claims related to methods of detecting genetic variations that were ineligible for patenting under 35 U.S.C. § 101. The Federal Circuit found that the claim was directed to a law of nature, and that the additional elements of the claim were insufficient to provide the inventive concept necessary to render the claim patent-eligible.

In re Smith, 815 F.3d 816, 118 U.S.P.Q.2d 1245 (Fed. Cir. 2016). The Federal Circuit affirmed the PTAB’s rejection of claims for claiming patent-ineligible subject matter under 35 U.S.C. § 101.

Personal Jurisdiction

Acorda Therapeutics Inc. v. Mylan Pharm. Inc., 817 F.3d 755, 118 U.S.P.Q.2d 1304 (Fed. Cir. 2016). The Federal Circuit affirmed the district court’s finding that Delaware could exercise specific personal jurisdiction over the defendant (Mylan), who filed an ANDA seeking approval to market a generic-version drug in, among other places, Delaware. The jurisdictional dispute centered on whether Mylan had certain minimum contacts with Delaware such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice. The Federal Circuit reasoned that “the magnitude and costs of the work required before the ANDA is filed soundly link the ANDA filing to the filer’s entry into the market to compete with the brand-name manufacturer if approval is obtained.” Mylan failed to sufficiently demonstrate that other considerations rendered jurisdiction unreasonable because, for example, Mylan had initiated ANDA lawsuits in Delaware in the past. In effect, the Federal Circuit’s holding ensures that a company’s ANDA filing subjects that company to personal jurisdiction in any state where the company will market the drug.

Procedure

Cardpool, Inc. v. Plastic Jungle, Inc., 817 F.3d 1316, 118 U.S.P.Q.2d 1444 (Fed. Cir. 2016). The parties mutually agreed to discontinue the present litigation because the accused activities had been voluntarily terminated by Plastic Jungle following reexamination. The appeal arose from concern by Cardpool that it not be estopped from acting in the future against any infringement upon the newly reexamined claims. The district court correctly deemed it inappropriate to advise on the new claims and thus did not abuse its discretion in denying the motion to vacate its earlier judgment or the finality thereof.

Reexamination

In re Varma, 816 F.3d 1352, 118 U.S.P.Q.2d 1342 (Fed. Cir. 2016). In a combined appeal of two ex parte reexamination decisions of the PTAB, the Federal Circuit found that the PTAB erred in canceling two sets of claims in Varma’s patent because its decisions were based on incorrect claim constructions. Thus, the Federal Circuit reversed the PTAB’s cancelation of 18 claims that either contained or depended from a claim that contained the first claim phrase, and the Federal Circuit vacated the cancelation of six additional claims that either contained or depended from a claim that contained the second claim phrase and remanded.

Request for New Trial

Rembrandt Vision Techs., LP v. Johnson & Johnson Vision Care, Inc., 818 F.3d 1320, 118 U.S.P.Q.2d 1523 (Fed. Cir. 2016). The Federal Circuit reversed and remanded the district court’s denial of Rembrandt’s motion for a new trial. Both parties did not dispute that JJVC’s expert testified falsely after trial. The Federal Circuit found that the district court clearly erred in finding that Rembrandt had a full and fair opportunity to present its infringement case. Moreover, the Federal Circuit found that while the district court gave thoughtful consideration to Rembrandt’s motion and the integrity of the judicial process, the district court erred in requiring complicity and summarily dismissing Rembrandt’s separate allegation of misconduct. Thus, the district court abused its discretion in denying Rembrandt’s motion for a new trial.

Standing

Luminara Worldwide, LLC v. Liown Elecs. Co., 814 F.3d 1343, 118 U.S.P.Q.2d 1148 (Fed. Cir. 2016). The Federal Circuit vacated and remanded the district court’s denial of defendant’s motion to dismiss and granting of plaintiff’s motion for preliminary injunction. The Federal Circuit found that the plaintiff had exclusionary rights sufficient for standing in a patent suit. Although the patent owner retained rights to license to an affiliate, those rights were limited and it was clear through amendments to the license agreement that the patent owner intended to grant rights to the plaintiff. Because the patent owner did not retain the right to sue, the plaintiff did not have to join the patent owner in the present suit. Regarding the preliminary injunction, the Federal Circuit found there was a substantial question of validity based upon an initial claim construction.

Subject Matter Jurisdiction

Microsoft Corp. v. GeoTag, Inc., 817 F.3d 1305, 118 U.S.P.Q.2d 1405 (Fed. Cir. 2016). The Federal Circuit affirmed the district court’s assertion of subject matter jurisdiction and summary judgment of noninfringement. The Federal Circuit found “where a complaint and a counterclaim both raise issues arising under federal patent law, the district court may retain subject matter jurisdiction over the counterclaim pursuant to 28 U.S.C. § 1338(a), even if the district court later dismisses or finds a defect in the complaint that raises a question arising under federal patent law.”

Written Description

Bamberg v. Dalvey, 815 F.3d 793, 118 U.S.P.Q.2d 1216 (Fed. Cir. 2016). The Federal Circuit affirmed the PTAB’s finding that claims used to provoke an interference lacked written description support. Bamberg provoked an interference with Dalvey’s claims. The Federal Circuit affirmed the PTAB’s finding that the copied claims recite a white layer that melts at a wide range of temperatures, while Bamberg’s specification discloses only a white layer that does not melt below 220° C (not a wide range of temperatures).

TRADE SECRETS

Allied Waste Servs. of N. Am., LLC v. Tibble, 2016 WL 1441449, 2016 U.S. Dist. LEXIS 47447 (N.D. Ill. 2016). The district court was not convinced that the Illinois Supreme Court would adopt the state appellate courts’ bright-line approach. Illinois courts have generally held that continued employment for two years or more constitutes adequate consideration. But, saying that Illinois courts have generally found this to be sufficient is very different than saying that anything less than two years is automatically insufficient. The point of requiring adequate consideration for a restrictive covenant is to prevent an employer from locking an at-will employee into a restrictive covenant and then firing that employee shortly thereafter, rendering the consideration of future employment illusory.

Am. Ctr. for Excellence in Surgical Assisting, Inc. v. Cmty. College Dist. 502, 2016 WL 3165763, 2016 U.S. Dist. LEXIS 73795 (N.D. Ill. 2016). The Illinois Trade Secrets Act (ITSA) preempts only claims that rest on misappropriation of trade secrets, not other common law claims that would lie even if no trade secrets were at issue. This is the same principle that the ITSA preempts unjust enrichment claims that are based on misappropriation of a trade secret.

Capricorn Mgmt. Sys. v. Gov’t Emples. Ins. Co., 2016 WL 1370937, 2016 U.S. Dist. LEXIS 46584 (E.D.N.Y. 2016). With respect to efforts to maintain secrecy, GEICO asserted that the mere existence of an NDA does not establish the requisite secrecy and faults the complaint for not covering the wide array of factors that Maryland courts consider in determining whether the information sought to be protected is the subject of efforts to maintain its secrecy. The plaintiff’s burden is not to establish reasonable efforts to maintain secrecy but just to allege facts that make that claim plausible. The existence of an NDA easily satisfies the second part of the trade secret definition for the purposes of a Rule 12(b)(6) motion.

Excel Mfg. v. Wondrow, 2016 WL 1551674, 2016 Minn. App. Unpub. LEXIS 385 (Minn. Ct. App. 2016). Excel presented a laundry list of items in its trade secret allegations. These items included design prints, product specifications, pricing information, marketing plans, and potential customers. General categories of information are not sufficiently specific to qualify as trade secrets under the statute. Moreover, to constitute a trade secret, information must not be generally known or readily ascertainable. Thus, summary judgment dismissing the trade secret misappropriation claim was appropriate.

Fidelitad, Inc. v. Insitu, Inc., 2016 WL 1611469, 2016 U.S. Dist. LEXIS 53796 (E.D. Wash. 2016). Fidelitad failed to establish the existence of novel trade secrets that are not readily ascertainable from another source. In other words, Insitu’s former employees’ collective knowledge of what they learned while working for Insitu cannot now form the basis of Fidelitad’s trade secrets. Fidelitad repeatedly argued that Insitu failed to provide any evidence that the information at issue was known by Insitu personnel or anyone within the industry. Even if true, it is Fidelitad, not Insitu, who has the burden of establishing the evidence to demonstrate the existence of trade secrets.

XTec, Inc. v. Hembree Consulting Servs., 2016 WL 1702223, 2016 U.S. Dist. LEXIS 56657 (S.D. Fla. 2016). A software compilation can be a trade secret and the plaintiff’s production of its source code was an acceptable method of identifying the trade secret. Case law supports the proposition that the overall design of a software program may be protectable as a trade secret even if the individual components of that program are common knowledge in the programming industry.

TRADEMARKS

Abandonment/Use by Related Company

Noble House Home Furnishings, LLC v. Floorco Enters., 118 U.S.P.Q.2d 1413 (TTAB 2016). The TTAB granted the petition on the ground of abandonment on Noble House’s petition for cancellation of a registration for NOBLE HOUSE owned by Floorco. Floorco owned a registration for NOBLE HOUSE in connection with furniture. The issue was whether use of the NOBLE HOUSE mark by Floorco’s parent company (Furnco), inured to the benefit of Floorco. The two elements to an abandonment claim are: (1) non-use of the mark and (2) intent not to resume use. Three consecutive years of nonuse of a mark establishes a prima facie showing of abandonment, creating a presumption that the owner has abandoned the mark without intent to resume. However, nonuse due to lack of demand may not constitute abandonment if the owner continues its marketing efforts. Floorco asserted that while the last sale of furniture under the NOBLE HOUSE mark was in 2009, it had been marketing and advertising NOBLE HOUSE furniture as available for sale.

The TTAB noted that despite Floorco’s assertions, Furnco marketed and advertised the NOBLE HOUSE products. Moreover, Furnco had controlled the nature and quality of the NOBLE HOUSE furniture prior to the period of non-use. The TTAB also noted that no agreements were entered into between Floorco and Furnco regarding the NOBLE HOUSE mark. Under these facts, use of the mark by Furnco did not inure to the benefit of Floorco where Furnco (1) used the NOBLE HOUSE mark, (2) controlled Floorco (and not vice-versa), (3) had no agreements with Floorco concerning the mark, and (4) controlled the nature and quality of the goods. Thus, Furnco’s use of the mark in its advertising and marketing materials could not be deemed use by Floorco, and thus Floorco had abandoned the NOBLE HOUSE mark due to its three year period of nonuse with no intent to resume use.

Damages

Romag Fasteners, Inc. v. Fossil, Inc., 817 F.3d 782, 118 U.S.P.Q.2d 1371 (Fed. Cir. 2016). The Federal Circuit affirmed the district court’s holding that Romag was not entitled to an award of Fossil’s profits for non-willful trademark infringement. In 2002, Fossil and Romag entered into an agreement to use ROMAG’s magnetic snaps in Fossil’s products including handbags and small leather goods. In 2010, the founder and president of Romag discovered that certain Fossil handbags contained counterfeit fasteners. In response, Romag sued Fossil, alleging, inter alia, trademark infringement.

The district court held that Romag was not entitled to Fossil’s profits because it did not prove Fossil acted willfully. On appeal, Romag argued that willfulness was not a prerequisite to recovery of monetary relief for trademark infringement because the 1999 amendment to the Lanham Act added the word “willful” with respect to monetary relief for trademark dilution but not with respect to monetary relief for trademark infringement. The Federal Circuit rejected this argument. Thus, Romag was not entitled to recover Fossil’s profits since Romag did not prove that Fossil infringed willfully.

Likelihood of Confusion

Mini Melts, Inc. v. Reckitt Benckiser LLC, 118 U.S.P.Q.2d 1464 (TTAB 2016). Mini-Melts (opposer) opposed Reckitt Benckister (applicant) application for registration of “Minimelts” and “Mini-Melts” for over-the-counter expectorant preparation on grounds of a likelihood of confusion with Opposer’s “Mini-Melts” mark for ice-cream and of mere descriptiveness without acquired distinctiveness. The TTAB dismissed the notice of opposition based on the lack of likelihood of confusion.

The TTAB weighed the Du Pont factors in determining whether a likelihood of confusion existed between the applicant’s and the opposer’s marks. The TTAB found that the virtual identity of the sight and sound of the respective marks weighed heavily in favor of a likelihood of confusion, but the dissimilarity of the respective goods weighed heavily against a finding of a likelihood of confusion. Although the opposer’s ice cream was not actually sold in drug stores and grocery stores (like the applicant’s pharmaceutical preparations), since there was no explicit restriction in the opposer’s registration, the TTAB had to assume that the opposer’s “ice cream” included all types, including those that could travel in the same channels of trade as the applicant’s pharmaceutical preparations, which weighed somewhat in the opposer’s favor. Although both products could be purchased by parents, the TTAB noted that parents would likely exercise more care in purchasing medication for their children. Thus, the conditions of sale weighed against a likelihood of confusion. The TTAB also found that the opposer failed to establish that its mark was strong, which weighed against a finding of likelihood of confusion. The applicant’s survey evidence showed only a de minimis level (7-8.5%) of a likelihood of confusion, supporting the applicant’s position of no likelihood of confusion. Finally, the TTAB found, in view of the degree of descriptiveness of its mark, the applicant had not adequately established acquired distinctiveness. The notice of opposition based on the failure to prove acquired distinctiveness was sustained, and registration was refused on that basis only.

Substantially Exclusive Use

Ayoub, Inc. v. ACS Ayoub Carpet Serv., 118 U.S.P.Q.2d 1392 (TTAB 2016). The TTAB sustained Ayoub’s opposition to a trademark application filed by ACS for AYOUB in connection with “retail carpeting and rug stores” and “carpet and rug cleaning services.” The issue before the TTAB was whether the AYOUB mark had acquired distinctiveness necessary for trademark protection. During prosecution, ACS sought protection on the Supplemental Register based on its alleged substantially exclusive use of the mark for at least five years. ACS asserted that “Ayoub” was a very powerful name dating back five or six decades, and that it had bought all of the assets of Ayoub Rug Cleaning Co., a carpet, rug, and repair business in the Washington D.C. metropolitan area, owned by Ayoub’s uncle, including the trade name, the goodwill associated with the business, and customer lists.

The TTAB, however, determined that because ACS was not able to show that it had made substantially exclusive use of the mark, it could not establish that the mark had acquired distinctiveness. In particular, the TTAB found that the use of the identical surname by opposer Ayoub and other third parties, for identical or related services, demonstrated a lack of substantially exclusive use. Ayoub introduced evidence of third party use in telephone directory listings, telephone directory display advertisements, and Internet web site printouts. Moreover, on its own web site, ACS placed information explaining that the owners of Ayoub-named businesses in the Washington D.C. area were wholly separate unaffiliated business entities, even though some were related. The TTAB found this to be an admission by ACS that the use of AYOUB was not substantially exclusive. Thus, the TTAB determined that the public had been exposed to many uses incorporating the name AYOUB in connection with carpet/rug cleaning and repair businesses, and that while absolute exclusivity is not required, such widespread use by unaffiliated businesses is not consistent with ACS’s claim of acquired distinctiveness and registration was refused.