Willfulness Not a Prerequisite to Recovering Trademark Infringer’s Profits

Although Fossil was using Romag fasteners on Fossil products for years, Romag discovered that factories making Fossil products had begun using counterfeit fasteners and that “Fossil was doing little to guard against the practice.”  In the following suit, the district court rejected Romag’s request for the infringer’s profits finding that Fossil had acted callously, but not willfully.  Ultimately landing before the Supreme Court, the Court resolved a circuit split and unanimously rejected the finding of willfulness as a prerequisite to an award of a trademark infringer’s profits.  In a textualist’s reading of the Lanham Act, Justice Gorsuch noted that another section of the Act makes willfulness a precondition to a profits award, but the relevant §1125(a) “has never required a showing of willfulness to win a defendant’s profits,” and that the Court does not “usually read into statutes words that aren’t there.”

USPTO announces extensions under the CARES Act

The U.S. Patent and Trademark Office (USPTO) has announced the availability of extensions under the Coronavirus Aid, Relief, and Economic Security Act (the CARES Act).  The USPTO’s Notice of Waiver of Patent-Related Timing Deadlines and Notice of Waiver of Trademark-Related Timing Deadlines explain that the time to file certain documents or fees is being extended 30 days for certain deadlines occurring on March 27, 2020 through April 30, 2020. The late document or fee must include the “statement that the delay in filing or payment was due to the COVID-19 outbreak.”

In particular, the statement must make clear that a person “associated with the filing or fee was personally affected by the COVID-19 outbreak, including, without limitation, through office closures, cash flow interruptions, inaccessibility of files or other materials, travel delays, personal or family illness, or similar circumstances, such that the outbreak materially interfered with timely filing or payment” (emphasis added).

Small differences do not preclude design patent infringement

Infringement was recently affirmed in an interesting design patent case where the defendant offered no prior art, nor proffered any jury instructions.  In Hafco Foundry and Machine Co., Inc. v. GMS Mine Repair and Maintenance, Inc., defendant GMS argued “the jury should have been instructed that ‘small differences between the accused and the claimed design’ will avoid infringement.” Such argument carried little weight as the Federal Circuit affirmed “the patented and accused designs need not be identical in order for design patent infringement to be found…. The controlling inquiry is how the ordinary observer would perceive the article.”  Not a revolutionary holding, but a good reminder of the value of design patents (and the importance of thorough lawyering).

Advocacy over candor leads to inequitable conduct

The Federal Circuit recently affirmed a determination of inequitable conduct in GS Cleantech Corp. v. Adkins Energy LLC.  Although inventors had been warned of the on-sale bar (requiring an invention not be sold or offered for sale more than one year before filing), the inventors initially did not disclose a relevant offer.  The Federal Circuit affirmed the district court’s conclusions that:  plaintiff CleanTech knew the offer threatened patenting and took steps to hide it from the USPTO; the inventors and plaintiff’s patent firm (“firm”) withheld evidence and made false representations to the USPTO; CleanTech and the firm attempted to coerce support for their false representations; the inventors and the firm prepared a “patently false” declaration; and they failed to correct the false declaration.  Notably, the Federal Circuit affirmed the district court’s conclusion that “[t]he only reasonable inference is that [the firm] believed the [I]nventors had made an offer and, … they chose advocacy over candor.”

Patent Troll punched with attorney fees

The Federal Circuit recently affirmed in Blackbird Tech v. Health In Motion an award of $360k in attorney fees against a patent troll “to deter future abusive litigation.” Non-practicing entity Blackbird sued Health In Motion (HIM) alleging that HIM’s exercise equipment infringed Blackbird’s U.S. Patent No. 6,705,976. Despite offering “nuisance value settlements” ranging from $80k to zero, Blackbird continued litigation for more than nineteen months. The Federal Circuit affirmed the attorney fees award because “[t]o hold otherwise would, in effect, cause [HIM] to make the untenable choice between: (1) submitting to Blackbird’s settlement demands–small as they may be; or (2) risking non-reimbursement of attorney fees accrued in defending themselves against Blackbird’s unmeritorious claims.”

Alice comes to the mechanical arts

In the post-Mayo/Alice era, patent eligibility under 35 U.S.C. § 101 has been decidedly more challenging for internet applications, medical diagnostic methods, and other inventions deemed to be laws of nature, natural phenomenon or abstract ideas.  Mechanical inventions were largely immune to Mayo/Alice challenges – until now.  In American Axle & Manufacturing, Inc. v. Neapco Holdings LLC, the Federal Circuit affirmed ineligibility under § 101 in invalidating claims directed to manufacturing a drive shaft.  The court indicated that “the patent claims do not describe a specific method for applying Hooke’s law [and] simply state that the [driveshaft] liner should be tuned to dampen certain vibrations” and thus amount to simply stating a law of nature.  Judge Moore voiced her concerns in a dissent accusing the majority of ignoring the second step of the Alice/Mayo test, stating that “[t[he majority’s validity goulash is troubling and inconsistent with the patent statute and precedent.”

Better sit down: scope of design limited by claim language

In Curver Luxembourg, SARL v. Home Expressions Inc., a case of first impression, the Federal Circuit recently held that claim language can indeed limit the scope of a design patent.  Curver has a design patent that, although entitled “Pattern for a Chair,” merely illustrates “a design pattern disembodied from any article of manufacture.”  Curver sued Home Expressions arguing their baskets incorporated a similar pattern and infringed.  The Federal Circuit instead held that claim language can limit the scope of a design patent because “long-standing precedent, unchallenged regulation, and agency practice all consistently support the view that design patents are granted only for a design applied to an article of manufacture, and not a design per se.”

Assembly is nonce-ense under 112, 6th

The Toro Company sought inter parties review of an MTD Products patent.  While the Patent Trial and Appeal Board (PTAB) knocked the patent out holding the claims obvious, the PTAB determined the claim term “mechanical control assembly” was not a means-plus-function term subject to 35 U.S.C. § 112, ¶ 6.  In MTD Products Inc. v. Iancu, the Federal Circuit disagreed. The court remanded the case noting the term is a “nonce term” that is not sufficiently structural to a person of ordinary skill in the art. The court further noted the specification does not demonstrate that the patentee intended to define the nonce term as the “ZTR control assembly” of the preferred embodiment.

Design patents ensure repeat customers

In Automotive Body Parts Association v. Ford Global Technologies, LLC, the Federal Circuit refused to “rewrite established law to permit ABPA to evade Ford[‘s] patent rights.”  Like many auto manufacturers, Ford regularly uses design patents to protect the design of replacement parts.  In an attempt to open up the replacement part market, ABPA argued that Ford’s design patents were invalid because replacement parts are “primarily functional”, that anyone repairing a vehicle will want replacement parts that “aesthetically match” the original design.  The court rejected ABPA’s theory, holding “even in this context of a consumer preference for a particular design to match other parts of a whole, the aesthetic appeal of a design to consumers is inadequate to render that design functional.”  

Supreme Court expands FOIA trade secret protections

In Food Marketing Institute v. Argus Leader Media, the Court resolved a circuit court split interpreting when the Government may withhold confidential or trade secret information from Freedom of Information Act (FOIA) requests.  Previously, a company had to demonstrate “substantial competitive harm” for their information to be protected under FOIA Exemption 4.  Now a company need only show the information “customarily and actually treated as private by its owner and provided to the Government under an assurance of privacy.”  While the decision offers greater protections to companies providing information to the Government, it will limit information available through FOIA requests.  Overturning decades of precedent, Justice Gorsuch wrote that the earlier National Parks decision is a “relic from a ‘bygone era of statutory construction.’”

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