Maryland Bar Bulletin
Publications : Bar Bulletin : March 2007

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 Bar Bulletin Focus

Intellectual Property     

The Intellectual Property “Top 10”

Attorneys who welcome changes to intellectual property law were not disappointed last year, and 2007 is shaping up to be no different. There were dozens of decisions and at least one new law last year that had a profound impact on certain intellectual property rights and I.P. litigation, and several important issues may be resolved this year. This article summarizes what could be considered the "top 10" IP issues, in no particular order.

1. Trademark law. On October 6, 2006, President Bush signed the Trademark Dilution Revision Act of 2006 into law. This statute reduced the burden of proof in "dilution" cases to require only a showing of likelihood of dilution, thus overruling the Supreme Court's Moseley v. V Secret Catalogue, Inc. decision. However, it also eliminated "niche fame" cases – requiring that a famous mark be "widely recognized by the general consuming public of the United States as a designation of source of the goods or services of the mark's owner."

2. Patent injunctions. The U.S. Supreme Court issued a landmark opinion that reversed the existing Federal Circuit standard for issuing injunctions against patent infringers. In eBay v. MercExchange, the Supreme Court held that the traditional four-factor test for determining whether an injunction is appropriate (likelihood of success, irreparable injury, etc.) applies equally in patent infringement cases, and that there is no presumption that "courts will issue permanent injunctions against patent infringement absent exceptional circumstances" as the Federal Circuit had held.

3. Patent obviousness. The Supreme Court is expected to issue a decision this year in a case that either will uphold or change the definition of obviousness previously used by U.S. courts. Last year, the Supreme Court heard oral arguments in KSR International v. Teleflex, which involves Teleflex's patent that claims a combination of two well-known features for controlling gas pedals. The Federal Circuit held that the combination was not obvious because there was no clear and convincing evidence of any suggestion or motivation in the prior art to combine the two known features. KSR argues that the Federal Circuit standard makes it too difficult to prove that a claimed invention is obvious.

4. Fraud on the PTO in trademark cases. The string of cases addressing fraud on the PTO in trademark cases continued in Standard Knitting, Ltd. v. Toyota Jidosha Kabushiki Kaisha, TTAB. There, the TTAB canceled several trademark registrations because the registrant misrepresented actual use of the marks in connection with the goods; the registrant was also precluded from curing the defect by post-registration amendment.

5. Patent licenses. The Supreme Court held that it is not necessary for a patent licensee to breach the terms of a patent license as a prerequisite to bringing suit challenging the validity of the patent, in Medimmune v. Genentech. Thus, an actual case or controversy exists even when a patent licensee has not breached its license agreement.

6. Local trademarks. In the Fourth Circuit's Carefirst of MD, Inc. v. First Care decision, the court denied relief to Carefirst in its trademark case against a small local physician group using the "First Care" mark (word reversal). Survey evidence purporting to show actual confusion, though admitted into evidence, was deemed of "little probative value." Because the accused mark had co-existed in the market for so long without actual confusion, there was "a strong inference that there [was] no likelihood of confusion."

7. Trade secrets. In a California case that pitted a company's trade secret rights against an online journalist's rights, the journalist won. Apple Computer sued several "Jane and John Doe" individuals whom it claimed divulged company trade secrets to an Internet Service Provider (ISP), which then published the confidential information. Apple subpoenaed the ISP to learn the names of the individuals who had supplied the information, but the California Court of Appeals held that the subpoena was unenforceable for several reasons, including that the subpoena violated the federal Stored Communications Act.

8. Copyright. In Clean Flicks of Colorado, LLC v. Soderbergh, a federal district court held that a movie service did not engage in fair use of copyrights when it altered movie content to delete "offensive" material or scenes. Clean Flicks violated copyright law when it removed offensive content from movies by first making a copy of the movie for a customer and then redacting audio and visual content in various manners.

9. International. This year, the Supreme Court will decide the extent to which a company in the U.S. can be liable for infringing a U.S. patent through activities that occur abroad. At issue is a Federal Circuit ruling last year that Microsoft infringed an AT&T patent on speech decoding technology by incorporating the technology in Windows programs that were copied and sold overseas. The Microsoft v. AT&T decision is expected to have a substantial business impact on software developers.

10. The so-called "Google" cases. Google continues innovating not only in technology and advertising, but in the law, by pushing the limits of fair use. Some of those cases are now reaching decision. For example, in Perfect 10 v. Google (C.D. Cal.), Google and the porn industry contributed to the law when a court held that display of "thumbnail" images was infringing, but framing the images was not infringing. In Field v. Google (D. Nev.), the court held that Google's "caching" of websites was a fair use. As a final example, in Rescuecom Corp. v. Google (N.D.N.Y.), the court held that Google's use of trademark terms in its search service was not a use in commerce. Stay tuned as more of the percolating Google cases come to decision in 2007.

Michael D. Oliver is a partner and Joshua A. Glikin is an associate with the firm of Bowie & Jensen, LLC.

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Publications : Bar Bulletin: March 2007