New Jersey Bankruptcy Court Extends Unusual Protection to Trademark Licensees Under Section 365(n)

A recent Bankruptcy Court decision in New Jersey took an unusual approach in determining  the rights of the debtors’ trademark licensees following the debtors’ rejection of the licenses as executory contracts. In In re Crumbs Bake Shop, Inc., Case No. 14-24287 (10/31/14), Judge Michael Kaplan held that the debtors’ licensees were protected by Section 365(n) of the Bankruptcy Code and could continue to use the licensed marks notwithstanding the rejection, even though that section  – which expressly protects licensees of other types of intellectual property –  makes no mention of trademarks. The decision has been appealed to the Third Circuit. If affirmed, the holding would diverge from the Fourth and Seventh Circuit’s approaches to the same issue and could lead to either a Supreme Court review or legislative action by Congress. Continue reading this entry

Is the Commil Defense Underutilized in Patent Cases?

It has now been more than a year since the Federal Circuit rendered its decision in the Commil case providing a defense to the intent prong for active inducement of patent claims. At the time of the decision there were a number of articles touting the “new” defense and opining that it would have a large impact on patent cases. A current search of the case law, however, shows that there have been fewer than 10 court decisions post-Commil that reference this defense. Practitioners defending against claims of induced infringement would do well to reacquaint themselves with the Commil defense and to consider whether it could be employed for their cases.

In Commil, the Federal Circuit held that evidence of an accused inducer’s good-faith belief of invalidity may negate the requisite intent for induced infringement. Commil USA, LLC v. Cisco Sys., Inc., 720 F.3d 1361, 1368 (Fed. Cir. 2013). Accordingly, one could be aware of a patent and induce another to perform the steps of the patent claim, but have a good-faith belief that the patent is not valid, which may negate the specific intent to encourage another’s infringement that is required for induced infringement. Id. The Federal Circuit did provide a caveat that this is not to say that such evidence precludes a finding of induced infringement, but rather it is evidence that should be considered by the fact-finder in determining whether an accused party knew that the induced acts constitute patent infringement. Id. at 1368-69. Continue reading this entry

A Familiar Riff: Gibson's Trade Dress Application Once Again Asks Whether a Guitar Body Shape Can Indicate Source

In the same way that Rock and Roll will never die (according to Neil Young) it would appear that battles over the protection of trade dress embodied in the shape of guitars will likewise never die. In the latest installment of guitar body trade dress disputes, Gibson Brands, Inc.’s application for trade dress protection for its ES-339 guitar body shape, shown below, has been opposed by 15 guitar manufacturers on the basis that the body shape is generic and has not acquired distinctiveness.

Gibson DrawingGibson’s attempt to obtain registered protection for its ES-339 guitar line goes back to 1993, when its predecessor, Gibson Guitar Corp., applied to register the trade dress protection of the body shape of Gibson’s ES-335 line. According to Gibson’s advertising material, the ES-335 had essentially the same body shape as the ES-339 but was slightly larger and heavier than the ES-339. Continue reading this entry

PTAB Requires Additional Showing for Cross-Examination If Testimony Was Prepared for Another Proceeding

A recent order from the Patent Trial and Appeal Board (“Board”) in an inter partes review illustrates how the Board may handle situations where a party seeks to depose a declarant whose testimony was submitted through a declaration from another proceeding – requiring the party to demonstrate that the deposition is “necessary in the interest of justice.”

Generally, in an IPR, direct testimony is submitted in the form of an affidavit. See, e.g., 37 C.F.R. § 32.23(a). The declarant is then subject to cross-examination by deposition. However, a patent in an IPR may have been the subject of a previous dispute, e.g., district court litigation or reexamination, where testimony, declarations or expert opinion may have addressed matters related to the ongoing IPR. When such materials are submitted as exhibits in an IPR, it is not automatic that the declarant will be subjected to cross-examination by deposition. See, e.g., 37 C.F.R. § 42.51. Continue reading this entry

Attorneys' Fees Awarded to Small Business Patent Owner to Advance Considerations of "Compensation and Deterrence"

A recent case in the District of Connecticut demonstrates that courts may be more willing to award attorneys’ fees to a small plaintiff, encouraging such a plaintiff to protect its patent when it is the plaintiff’s “primary business asset[],” even if potential damages for patent infringement are relatively small and the accused products are only a “minute portion” of the defendant’s business. In Romag Fasteners, Inc. v. Fossil, Inc., No. 3-10-cv-01827 (D. Conn. Aug. 14, 2014), the court granted attorneys’ fees and costs to the plaintiff under 28 U.S.C. § 285 and noted that “this case raises special concerns regarding compensation and deterrence of patent infringement.” The Court interpreted Octane Fitness, LLC v. ICON Health & Fitness, Inc., 134 S. Ct. 1749, 1755 (2014), in its analysis, and while many people have viewed Octane Fitness as an opportunity for defendants to more easily obtain fees in weak cases brought by plaintiffs (including “patent trolls” that bring weak cases hoping defendants will settle rather than spend attorneys’ fees defending the case), Romag Fasteners shows that plaintiffs may also now sometimes obtain fees in cases they might not have prior to Octane Fitness. Continue reading this entry