Departments

Decisions in Brief

By John C. Gatz

Published in Landslide Vol. 11 No. 3, ©2019 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.

Copyrights

A Magical License to Download

Disney Enterprises, Inc. v. Redbox Automated Retail, LLC, 127 U.S.P.Q.2d 1810 (C.D. Cal. 2018). Plaintiff Disney sells “combo packs,” which contain a DVD and/or Blu-ray disc version of a particular Disney movie and a piece of paper containing an alphanumeric code. The code can be input or redeemed online to allow a user to stream and/or download the same Disney movie contained on the physical discs. Defendant Redbox rents and sells movies to consumers via automated kiosks, and also began offering combo pack download codes for individual sale at Redbox kiosks. Disney sued and previously sought a preliminary injunction enjoining Redbox from offering standalone Disney codes for sale, based on theories of contributory copyright infringement and breach of contract (which Redbox enters when it purchases combo packs). The district court had denied Disney’s motion for a preliminary injunction, concluding that in light of the specific contract language printed on combo pack boxes and used within the redemption sites’ terms of use, Disney could not show a likelihood of success on the merits of its breach of contract or contributory copyright infringement claims.

Disney subsequently changed the language on its combo pack boxes, changed the download sites’ terms of use, and amended its complaint. The back of the boxes state: “Digital code redemption requires prior acceptance of license terms and conditions. Codes only for personal use by recipient of this combination package or family member. Digital movie code . . . subject to expiration after May 15, 2023.” The packaging also stated: “The digital code contained in this package may not be sold separately and may be redeemed only by the recipient of this combination package or a family member. Visit MoviesAnywhere.com, RedeemDigitalMovie.com, and disneytermsofuse.com for code redemption and other applicable terms and conditions.”

The district court ruled in favor of Disney on its subsequent motion for a preliminary injunction, based on the new language on the packaging. The district court found that the contract was closer to a shrinkwrap or boxtop agreement, for example, as opposed to a clickwrap agreement, which requires a positive manifestation of assent. The notice on the packaging was sufficiently definite and clear, was readable prior to purchasing a combo pack, and gave the purchaser notice of the existence of a license and its key conditions. Further details of the license were also available prior to purchase from the download websites. Additionally, because the new terms did not restrict a purchaser’s use and disposal of the physical discs, Redbox’s arguments regarding copyright misuse were not persuasive. Therefore, the district court granted Disney’s motion for a preliminary injunction.

Oracle Still Entitled to Injunction and Attorney Fees after Remand

Oracle USA, Inc. v. Rimini Street, Inc., 324 F. Supp. 3d 1157 (D. Nev. 2018). Oracle sued Rimini Street for copyright infringement and violation of California and Nevada computer access laws for Rimini Street’s after-license software support to customers who had licensed Oracle software. A jury found that Rimini Street was liable for copyright infringement and violations of the states’ computer access laws while providing this support. The district court granted Oracle a permanent injunction and awarded attorney fees to Oracle. Rimini Street appealed. The Ninth Circuit upheld the copyright infringement decision, but overturned the findings on the computer access laws, and remanded the case back to the district court to determine if a permanent injunction against Rimini Street was still justified and if Oracle still deserved attorney fees.

On remand, the district court issued a permanent injunction and awarded Oracle attorney fees. Starting with the permanent injunction, the district court determined that all four factors the U.S. Supreme Court provided in eBay, Inc. v. MercExchange, LLC, 547 U.S. 388 (2006), for determining whether a permanent injunction is proper in a copyright case favored Oracle. The jury found that Rimini Street infringed 93 of Oracle’s copyrights, and this weighed heavily in the district court’s finding that Oracle suffered an irreparable injury and that monetary damages were inadequate.

Turning to the award of attorney fees, the district court determined that Oracle should be entitled to fees based on factors the Supreme Court enumerated in Fogerty v. Fantasy, Inc., 510 U.S. 517 (1994), for an award of attorney fees in a copyright case. The district court focused extensively on Oracle having a great deal of success at trial by proving Rimini Street had infringed many Oracle copyrights, and the fact that Rimini Street had acted unreasonably by completely changing the basis of its defense during the case, requiring Oracle to spend more resources to prove copyright infringement.

Copyright Suit against Empire Show Creators Fizzles Out

Tanksley v. Daniels, 902 F.3d 165, 127 U.S.P.Q.2d 1802 (3d Cir. 2018). In 2005, plaintiff Tanksley wrote Cream, a three-episode pilot focusing on an African American–owned hip hop label, which he also starred in and directed. In 2008, Tanksley spoke with Lee Daniels about Cream, and also gave Daniels a Cream DVD and script. Daniels later created Empire, a show about an African American–run record label, which debuted on Fox in 2015. Based on his perception of similarities between the shows, Tanksley sued Daniels, Fox, and others for copyright infringement. The district court granted the defendants’ motion to dismiss, based on a finding that the shows were not substantially similar as a matter of law.

Despite superficial similarities between the shows, the Third Circuit affirmed the district court’s decision. On the question of the plots of the shows, the Third Circuit found that “the similarities between the shows . . . extend no farther than the bare abstraction of an African-American, male record executive.” With respect to the characters, the Third Circuit determined that, even given an assumption that an unprotectable idea gave rise to similar characters, the particular expressions of this idea are not substantially similar.

Patents

Anticipation

Eli Lilly & Co. v. Los Angeles Biomedical Research Institute at Harbor-UCLA Medical Center, 849 F.3d 1073, 127 U.S.P.Q.2d 1434 (Fed. Cir. 2017). The Federal Circuit affirmed the Patent Trial and Appeal Board’s (PTAB’s) finding that the patent was not invalid as anticipated by the prior art.

Attorney Fees

Nantkwest, Inc. v. Iancu, 898 F.3d 1177, 127 U.S.P.Q.2d 1497 (Fed. Cir. 2018). The Federal Circuit affirmed the district court’s denial of the U.S. Patent and Trademark Office’s (USPTO’s) request for reimbursement of attorney fees. The Federal Circuit recognized that the general rule in the United States is that each party pays for its own attorneys. To deviate from the status quo, the Federal Circuit noted that Congress must draft legislation demonstrating its intent to make the award of attorney fees available under that statute. The Federal Circuit found that awarding all the expenses was not presented in the statute. Thus, the Federal Circuit affirmed the judgment of the district court.

Claim Construction

Intellectual Ventures I LLC v. T-Mobile USA, Inc., 902 F.3d 1372, 127 U.S.P.Q.2d 1697 (Fed. Cir. 2018). The Federal Circuit vacated and remanded the district court’s summary judgment ruling that T-Mobile did not infringe an Intellectual Ventures patent because of an erroneous claim construction.

TF3 Ltd. v. Tre Milano, LLC, 894 F.3d 1366, 127 U.S.P.Q.2d 1349 (Fed. Cir. 2018). The Federal Circuit reversed the PTAB’s finding of invalidity based on an erroneous claim construction. Specifically, the Federal Circuit found that the PTAB broadened the meaning of the claim term beyond the scope of the description.

Damages

Power Integrations, Inc. v. Fairchild Semiconductor International, Inc., 894 F.3d 1258, 127 U.S.P.Q.2d 1355 (Fed. Cir. 2018). The Federal Circuit affirmed the district court’s finding of infringement, but vacated the damages award and remanded for further proceedings. The Federal Circuit found that the accused infringer did not raise an issue of claim construction during either the Markman hearing or the trial phase and therefore could not raise it on appeal. The Federal Circuit reversed the awards of damages, finding that the entire market rule did not apply since there were other features in the devices that would lead to a consumer purchasing the item.

Design Patent

Advantek Marketing, Inc. v. Shanghai Walk-Long Tools Co., Ltd., 898 F.3d 1210, 127 U.S.P.Q.2d 1615 (Fed. Cir. 2018). The Federal Circuit held that a design patentee’s infringement claim was not barred by prosecution history estoppel. In response to a restriction requirement during prosecution, the applicant elected an embodiment directed to an animal kennel with a cover, withdrawing a claim directed to an embodiment of the kennel without a cover. While the accused product did not include a cover, the Federal Circuit held that the accused product could infringe regardless of extra features, including a cover.

In re Maatita, 900 F.3d 1369, 127 U.S.P.Q.2d 1640 (Fed. Cir. 2018). A two-dimensional plan-view drawing of a three-dimensional feature in a design patent was sufficient to meet the enablement and definiteness requirements. The Federal Circuit held that “a design patent is indefinite under § 112 if one skilled in the art, viewing the design as would an ordinary observer, would not understand the scope of the design with reasonable certainty based on the claim and visual disclosure.”

Enablement

Trustees of Boston University v. Everlight Electronics Co., Ltd., 896 F.3d 1357, 127 U.S.P.Q.2d 1609 (Fed. Cir. 2018). The Federal Circuit held that the asserted claim was not enabled. The Federal Circuit noted that the district court’s claim constructions gave rise to six permutations for the relationships between certain claim elements. Because the evidence showed that one permutation was impossible to create, the Federal Circuit found that the full claim scope was not enabled. The Federal Circuit also rejected the patentee’s evidence that others could make such a device because those results were not achieved using the specification’s teachings.

Exceptional Case/Damages

In re Rembrandt Technologies LP Patent Litigation, 899 F.3d 1254, 127 U.S.P.Q.2d 1826 (Fed. Cir. 2018). The Federal Circuit affirmed the district court’s determination of an exceptional case, but vacated the district court’s fee award. The Federal Circuit found that the district court did not abuse its discretion when it found this to be an exceptional case because Rembrandt had paid fact witnesses contingent on the outcome of the litigation, allowed certain key documentation to be destroyed, and should have known that two of the asserted patents had been revived improperly and were therefore unenforceable. However, the Federal Circuit disagreed with the $51 million fee award because the district court did not properly establish a causal connection between Rembrandt’s misconduct and the fees awarded. Since the litigation included nine patents, multiple issues, and several different defendants, the district court was required to determine the fees based on an explicit causal connection.

Implied Waiver

Core Wireless Licensing S.A.R.L. v. Apple Inc., 899 F.3d 1356, 127 U.S.P.Q.2d 1773 (Fed. Cir. 2018). The Federal Circuit reversed and remanded a district court’s decision that Apple infringed a Core Wireless patent. Although the Federal Circuit affirmed the district court’s determination that Apple infringed the patent, it remanded based on Nokia’s (the former patent owner’s) conduct during the European Telecommunications Standards Institute’s (ETSI’s) consideration of standards relating to the patented technology during the standards-setting process. During this process, Nokia proposed an industry standard to ETSI and simultaneously failed to disclose that it had filed a Finnish patent application. The Federal Circuit has previously held that failure to disclose a patent filing was an example of implied waiver where the applicant had a duty to disclose the filing with the standard-setting organization and breached that duty. The Federal Circuit remanded rather than reverse the district court because the Nokia proposal was ultimately not implemented, and the district court did not make a definitive determination regarding any inequitable consequence. The Federal Circuit reasoned that implied waiver requires that the misconduct result in an unfair benefit, which was not proven here.

Inter Partes Review (IPR)

Click-to-Call Technologies, LP v. Ingenio, Inc., 899 F.3d 1321, 127 U.S.P.Q.2d 1747 (Fed. Cir. 2018). The Federal Circuit vacated the PTAB’s decision in an IPR proceeding, holding that the PTAB committed legal error in rendering its § 315(b) determination because it lacked jurisdiction to institute the IPR due to the one-year time bar. The PTAB instituted the IPR proceedings despite the fact that the infringer had been served with a complaint more than one year before the IPR was petitioned for, reasoning that the case had been dismissed without prejudice in that instance.

Ericsson Inc. v. Intellectual Ventures I LLC, 901 F.3d 1374, 127 U.S.P.Q.2d 1724 (Fed. Cir. 2018). The Federal Circuit vacated a PTAB decision in an IPR that upheld several claims in an Intellectual Ventures patent. The Federal Circuit held that the PTAB improperly declined to consider arguments made in Ericsson’s reply brief that stemmed directly from arguments raised in the petition regarding obviousness. After institution, the PTAB agreed with Intellectual Ventures that the claims should be interpreted under the Phillips standard rather than the broadest reasonable interpretation standard used in Ericsson’s initial claim interpretation arguments. The PTAB struck part of Ericsson’s reply brief, stating that it raised new theories of obviousness not addressed in its petition. The Federal Circuit disagreed and held that there was no new evidence in the reply brief but only an expansion of a previously argued rationale as to the obviousness of the challenged claims in light of the prior art disclosures.

In re Power Integrations, Inc., 899 F.3d 1316, 127 U.S.P.Q.2d 1666 (Fed. Cir. 2018). The Federal Circuit denied three mandamus petitions, rejecting a claim that the PTAB did not adequately explain why three references did not qualify as printed publication prior art in its denial of institution decisions. A petitioner cannot circumvent the bar on appellate review of institution decisions by filing a petition for a writ of mandamus.

Luminara Worldwide, LLC v. Iancu, 899 F.3d 1303, 127 U.S.P.Q.2d 1637 (Fed. Cir. 2018). On appeal from three IPR decisions, the Federal Circuit upheld the PTAB’s obviousness determinations on two of the three challenged patents. The Federal Circuit vacated the PTAB’s decision as to the third patent, finding that the petition was time-barred because 35 U.S.C. § 315(b) applies where a first infringement compliant was voluntarily dismissed without prejudice.

Worlds Inc. v. Bungie, Inc., 903 F.3d 1237, 127 U.S.P.Q.2d 1818 (Fed. Cir. 2018). The Federal Circuit vacated the PTAB’s finding that three patents were invalid because the Federal Circuit found that the PTAB erred in its real-party-in-interest analysis under 35 U.S.C. § 312(a)(2). Bungie filed six petitions for IPR challenging claims of Worlds’ three patents. Bungie, however, was a party to a software publishing and development agreement with a third party (Activision), which Worlds had previously sued for infringing the same three patents. Bungie’s IPR petitions were filed more than one year after Worlds served its infringement complaint on Activision. The PTAB denied Worlds’ request for discovery regarding the relationship between Bungie and Activision, and whether Activision should have been named as a real party in interest to the IPR proceedings, which would have made the petitions time-barred under 35 U.S.C. § 315(b). The PTAB instituted the IPR proceedings after finding that Worlds had not demonstrated that Activision was an unnamed real party in interest. Once the patent owner raises the issue, the burden of persuasion lies with the petitioner to demonstrate that its petition is not time-barred. Here, Worlds properly raised the issue, yet the Federal Circuit found that the PTAB failed to properly address it and seemingly misplaced the burden of persuasion on the patent owner, Worlds. As such, the Federal Circuit vacated and remanded to the PTAB.

Invalidity

Endo Pharmaceuticals Solutions, Inc. v. Custopharm Inc., 894 F.3d 1374, 127 U.S.P.Q.2d 1409 (Fed. Cir. 2018). The Federal Circuit upheld the district court’s finding that the claims were not invalid. The Federal Circuit found that the district court’s reasoning was reasonable. Claim limitations related to dosage were not taught in the prior art. While there was some teaching that a lower dose might be preferable, there were other teachings that disputed lowering the dose, and the accused infringer did not give evidence as to why one skilled in the art would prefer the lower dose.

Noninstituted IPR Claims

Biodelivery Sciences International, Inc. v. Aquestive Therapeutics, Inc., 898 F.3d 1205, 127 U.S.P.Q.2d 1605 (Fed. Cir. 2018). The Federal Circuit remanded to the PTAB to consider noninstituted claims and noninstituted grounds in accordance with the Supreme Court’s recent decision in SAS Institute, Inc. v. Iancu, 138 S. Ct. 1348 (2018). The Federal Circuit rejected Aquestive’s arguments that waiver applied as Biodelivery made its remand request nine days after SAS. The Federal Circuit also rejected Aquestive’s argument that Biodelivery’s remand request was untimely. Thus, the Federal Circuit granted Biodelivery’s remand request.

Obviousness

ZUP, LLC v. Nash Manufacturing, Inc., 896 F.3d 1365, 127 U.S.P.Q.2d 1423 (Fed. Cir. 2018). The Federal Circuit upheld the district court’s finding that the claims were invalid as obvious. The issues were whether (1) a skilled person in the art would be motivated to combine the references, and (2) the district court properly evaluated the secondary considerations. The Federal Circuit found that all the claim elements were present in the prior art references and the goal of the patent was mentioned in the prior art, and thus there was a motivation to combine.

Patent-Eligible Subject Matter

BSG Tech LLC v. BuySeasons, Inc., 899 F.3d 1281, 127 U.S.P.Q.2d 1688 (Fed. Cir. 2018). The Federal Circuit held that several patents directed to systems and methods for indexing information were invalid under § 101. After agreeing with the district court that the claims were directed to an abstract idea under the first step of the Alice analysis, the Federal Circuit held that an unconventional feature that restates what has been identified as the abstract idea does not satisfy the second step of the Alice analysis.

Interval Licensing LLC v. AOL, Inc., 896 F.3d 1335, 127 U.S.P.Q.2d 1553 (Fed. Cir. 2018). The Federal Circuit affirmed the district court’s determination that the claims recited patent-ineligible subject matter. The Federal Circuit found that the claims were directed to an abstract idea because they consisted of generic and conventional information acquisition and organization steps that were connected to, but did not convert, the abstract idea—displaying a second set of data without interfering with a first set of data—into a particular conception of how to carry out that concept.

SAP America, Inc. v. InvestPic, LLC, 898 F.3d 1161, 127 U.S.P.Q.2d 1597 (Fed. Cir. 2018). The Federal Circuit affirmed the district court’s holding that all claims were patent ineligible under 35 U.S.C. § 101 and thus invalid. The Federal Circuit found that the claimed subject matter was nothing but a series of mathematical calculations based on selected information and the presentation of the results of those calculations.

Printed Publication

GoPro, Inc. v. Contour IP Holding LLC, 898 F.3d 1170, 127 U.S.P.Q.2d 1418 (Fed. Cir. 2018). The Federal Circuit vacated and remanded the PTAB’s decision that the claims were not obvious. The Federal Circuit found that the PTAB incorrectly concluded that GoPro’s evidence was not accessible. The Federal Circuit found that the prior art was a printed publication because it was available at a trade show. Although the trade show was not open to the public, there would be people of ordinary skill in the art there and the material was disseminated with no restrictions and was intended to reach the general public.

Jazz Pharmaceuticals, Inc. v. Amneal Pharmaceuticals, LLC, 895 F.3d 1347, 127 U.S.P.Q.2d 1485 (Fed. Cir. 2018). The Federal Circuit affirmed the PTAB’s conclusion that the claims were obvious. The primary issue on appeal was whether the references were sufficiently accessible to the public to constitute prior art. The Federal Circuit found that the record demonstrated that the materials were widely disseminated to persons of ordinary skill for a substantial time with no reasonable expectation of confidentiality. Thus, they were in possession of the public.

Standing

JTEKT Corp. v. GKN Automotive Ltd., 898 F.3d 1217, 127 U.S.P.Q.2d 1581 (Fed. Cir. 2018). The Federal Circuit found that JTEKT failed to establish an actual injury sufficient to confer Article III standing, and dismissed the appeal. JTEKT initiated an IPR, wherein the PTAB found the claims not unpatentable. JTEKT appealed. The Federal Circuit found that where the party relies on potential infringement liability as a basis for injury in fact but is not currently engaging in infringing activity, it must establish that it has concrete plans for future activity that creates a substantial risk of future infringement or likely will cause the patentee to assert a claim of infringement. Although JTEKT submitted two declarations in support of its standing, JTEKT’s problem was that these declarations did not establish that its planned product would create a substantial risk of infringement. Therefore, JTEKT lacked standing to appeal.

Trade Secrets

Hunting Energy Services, Inc. v. Kavadas, No. 3:15-CV-228 JD, 2018 WL 4539818, 2018 U.S. Dist. LEXIS 161416 (N.D. Ind. Sept. 20, 2018). The defendants argued that information in the specification and drawings for Hunting’s drill pipe is readily ascertainable by proper means, so it cannot be a trade secret. The defendants argued that the chemistry of Hunting’s pipe can be reverse engineered through chemical testing, and that the completed pipes can be measured to determine their dimensions. To be a trade secret, information must not be readily ascertainable by proper means. That does not mean, though, that it must be impossible, or even economically infeasible, to ascertain the information by proper means. Rather, information qualifies for protection as a trade secret if duplicating the information requires a substantial investment of time, expense, or effort. The defendants’ motion for summary judgment was denied because Hunting presented sufficient evidence to create a dispute of fact as to whether this information is readily ascertainable by proper means.

SPBS, Inc. v. Mobley, No. 4:18-CV-00391, 2018 WL 4185522, 2018 U.S. Dist. LEXIS 148881 (E.D. Tex. Aug. 31, 2018). The district court harbored serious doubts about the defendant’s credibility in a preliminary injunction hearing on alleged stealing of trade secrets. Plaintiff SPBS offered a plausible sequence of events for trade secret misappropriation: (1) an employee claims to be leaving a company for another company in an entirely different industry, (2) the employee deletes his company e-mail or other databases containing his communications, and (3) the employee joins a competitor of his former company. Mobley immediately pursued SPBS’s clients upon joining Intermed whom he would not have known but for his employment with SPBS. Based on the evidence, the district court recognized that Mobley had access to SPBS’s proprietary information and likely took the information to Intermed. Thus, the preliminary injunction was granted in favor of SPBS.

AHS Staffing, LLC v. Quest Staffing Group, Inc., No. 4:18-CV-00402, 2018 WL 3870067, 2018 U.S. Dist. LEXIS 137818 (E.D. Tex. Aug. 15, 2018). AHS matches nurses and other healthcare professionals on temporary and permanent bases with hospitals, healthcare groups, occupational healthcare clinics, individual practitioners, networks, psychiatric facilities, government institutions, and managed care entities and/or through contract management groups. The healthcare staffing industry is highly competitive so AHS must offer and deliver highly skilled healthcare providers at competitive rates to survive and thrive. Over many years, AHS has developed a confidential database with continuous revisions, investing a significant amount of time, effort, and money. Quest was accused of using this database, and AHS filed a preliminary injunction against Quest. The district court found that AHS has sufficiently shown a likelihood that the internal database qualifies as a trade secret, and thus granted a preliminary injunction.

Southern Field Maintenance & Fabrication LLC v. Killough, No. 2:18-cv-581-GMB, 2018 WL 4701782, 2018 U.S. Dist. LEXIS 169038 (M.D. Ala. Oct. 1, 2018). One rationale for allowing the pleading of categories is that a plaintiff may identify purported trades by publicly disclosing information in court filings. Here, the allegations, while listing information in categories, are not merely categories of information that potentially could be trade secrets, but more specifically describe information that has been actually misappropriated including information relating to specific maintenance service project work, current and future purchase orders, and time and materials rates and quotes for contracts. Whether an item taken from an employer constitutes a trade secret is normally resolved by the fact finder after full presentation of evidence from each side. The motion to dismiss the trade secret misappropriation claims was denied.

Yeiser Research & Development, LLC v. Teknor Apex Co., No. 17-cv-1290-BAS-RBB, 2018 WL 3993370, 2018 U.S. Dist. LEXIS 141969 (S.D. Cal. Aug. 21, 2018). This case involves the alleged theft and misappropriation of confidential information related to the compact “Zero G Hose.” The amended complaint translates nebulous allegations into a concrete confidential marketing pitch that combined information about retailer preferences and a specific method for explaining to retailers the failures of the existing hoses in relation to the new compact hose concept and design the plaintiff had developed. Marketing-related information, such as marketing plans and marketing analysis, may constitute a trade secret. The plaintiff further presented facts showing that the pitch was not generally known and how the defendant misappropriated it. The pitch derived from the plaintiff’s confidential and propriety information gathered in communications with retailers and consumers, and confidential analysis of consumer preferences. The plaintiff further alleged that retailers were not aware of why the expanding hoses on the market were failing. All this information was shared under a confidentiality agreement. The allegations are sufficient for a trade secret misappropriation claim. Thus, the defendant’s motion to dismiss the plaintiff’s trade secret claim was denied.

Trademarks

Color Marks

In re Forney Industries, Inc., 127 U.S.P.Q.2d 1787 (T.T.A.B. 2018). Forney filed a trademark application for a mark on the Principal Register consisting of three colors, specifically, the color red merging into the color yellow, and a black banner located across the top of the color yellow. The application was refused on the basis that the mark was not inherently distinctive. On appeal, the Trademark Trial and Appeal Board (TTAB) addressed the nature of the mark and determined that Forney had not attempted to combine the color mark with a shape, pattern, or other distinctive design. Instead, the color applied to the packaging was of varying shapes and varying degrees of fading of red into yellow. The TTAB made further findings that there was no distinction between color marks applied to products and color marks applied to product packaging. Additionally, the TTAB found no legal distinction between a mark with a single color and a mark with multiple colors. As such, a mark consisting of multiple colors, without additional elements, cannot be inherently distinctive.

Based on these findings, the TTAB held that a color mark applied to product packaging cannot be inherently distinctive and can only be registered on the Principal Register if it has been adequately shown that the mark has acquired distinctiveness. Because Forney had made no claim under section 2(f) that the mark had acquired distinctiveness, the refusal to register was affirmed.

Likelihood of Confusion

Cai v. Diamond Hong, Inc., 901 F.3d 1367, 127 U.S.P.Q.2d 1797 (Fed. Cir. 2018). Appellant Cai appealed an opinion of the TTAB canceling registration of his mark WU DANG TAI CHI GREEN TEA due to a likelihood of confusion with appellee Diamond Hong’s mark TAI CHI. The Federal Circuit affirmed. The Federal Circuit disagreed with Cai’s contention that the TTAB improperly excluded evidence submitted in the briefs. The Federal Circuit agreed with the TTAB that: (1) Cai’s main brief included numerous assertions of fact, such information not being evidence; and (2) Cai, as the defendant, was not entitled to file a reply brief, and thus the TTAB did not abuse its discretion in excluding Cai’s submissions. The Federal Circuit also found that the TTAB did not err in finding a likelihood of confusion between the two marks.

Merely Decorative/Likelihood of Confusion

In re Peace Love World Live, LLC, 127 U.S.P.Q.2d 1400 (T.T.A.B. 2018). Peace Love sought registration on the Principal Register of the mark I LOVE YOU (in standard characters) for “bracelets.” The examining attorney refused registration on the grounds that I LOVE YOU failed to function as a trademark because it was merely a decorative feature of the applicant’s bracelets and on the grounds of a likelihood of confusion with the registered mark I LUV U for jewelry. The applicant appealed, and the TTAB affirmed both refusals.

In determining whether I LOVE YOU functioned as a trademark, the TTAB considered the commercial impression the mark makes on the relevant public (i.e., whether the mark would be perceived as a mark identifying the source of the goods). The TTAB noted that the specimen that the applicant submitted with the application was essentially the bracelet itself, each of the eight letters in the phrase forming one of the bracelet’s eight segments. The TTAB found that the phrase “I LOVE YOU” conveys a term of endearment comprising the bracelet and was thus ornamental. This finding was corroborated by third-party use of the phrase I LOVE YOU on bracelets and other jewelry, demonstrating that consumers are accustomed to seeing similar ornamental displays of I LOVE YOU on bracelets, and thus would not perceive I LOVE YOU on bracelets as emanating from a single source. In view of the ornamental nature of the I LOVE YOU mark and the likelihood of confusion with the prior I LUV U mark, the refusal to register was affirmed.

Phantom Marks

In re Society of Health & Physical Educators, 127 U.S.P.Q.2d 1584 (T.T.A.B. 2018). Educators appealed the refusal to register the mark SHAPE XXXX for, generally, printed materials for educational association members in class 16, clothing in class 25, and educational services in class 41. The XXXX in the mark represented the unabbreviated name of a U.S. state or Puerto Rico. Educators’ application was refused registration under sections 1 and 45 of the Trademark Act on the ground that the mark was a “phantom” mark that constituted more than one mark. A phantom mark is described as a mark in which an integral portion is represented by a blank or dashed line that acts as a placeholder for a generic term or symbol. The generic term or symbol changes depending on the use of the mark. In assessing whether the changeable portion was permissible, the TTAB evaluated whether the different elements of XXXX affected the commercial impression so as to result in more than one mark. The TTAB determined that, whereas the XXXX element was defined as the name of a state or Puerto Rico, a large number of variations were possible, specifically 51 variations. And because the different variations of SHAPE XXXX created marks with different commercial impressions, including different appearances, pronunciations, and significance, the variations were not legal equivalents. Thus, the mark SHAPE XXXX comprised more than one mark and the refusal was affirmed.

John C. Gatz

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

Column contributors include the following writers: Copyrights: Zachary J. Smolinski, Smolinski Rosario Law P.C.; Michael N. Spink, Brinks, Hofer, Gilson & Lione; and 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; and Angelo Christopher, Nixon Peabody LLP. Trade Secrets: R. Mark Halligan, FisherBroyles LLP. Trademarks: Elizabeth W. Baio, Nixon Peabody LLP; and Amy L. Sierocki, Blumenfield & Shereff LLP.

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