Expanding Trademark Subject Matter and Overlapping Rights: a Website, Case and Conference

The issue concerning expanding trademark subject matter is a relatively hot one.  Trademark subject matter has continued to expand in the U.S. to cover everything from single colors alone to interesting forms of trade dress, such as a website or a restaurant's décor, to sounds to tastes to smells.  Indeed, motion marks are common now as well.  Attorney Michael Spinks has an interesting, helpful and entertaining blog titled, "Funky Marks."  (Well, I suppose these marks can be smelly, have a cool sound and are a little weird, but they don't all involve Mark Wahlberg.)   If you are interested in seeing just how far trademark subject matter is going, enjoy the website.
 
And, another new case on the subject of trademarks was just issued today.  The EU General Court in Luxemburg apparently upholds a three dimensional trademark over the Rubik's Cube despite the expiration of a patent.  The Simba Toys case can be found, here.  And, here is commentary by Bloomberg.  (Hat Tip to BNA). 
 
Couple expanding trademark protection with overlapping rights and you have a very hot topic.  With expanding trademark subject matter (and rights), you get the potential for conflict with other areas of intellectual property.  And, INTA (among others) is sponsoring an upcoming timely conference on the subject featuring our very own Neil Wilkof (Congratulations to Neil for his appointment to the board of INTA) and Jeremy Phillips.  (And, here is a link to an IPKat (Neil and Jeremy) post on the subject of the consumer protection function of trademarks.)
 
Here is information about the conference:
 

December 8–9 

Westin Grand Munich Hotel

Munich, Germany

  

The overlap between trademarks and other intellectual property rights is everywhere—whether in registration, enforcement or commercialization. For example:

• A product design can be protected as a two- or three-dimensional mark, trade dress, design patent, registered design, unregistered design or a work of applied art under copyright law.
• An artistic work can be registered as a trademark, whether or not it is protected under copyright law.
• A geographical indication can be registered as such or protected as a collective or certification mark, under passing off or unfair competition law.
• A trademark can be subject to unfair competition law, comparative advertising statutes or consumer protection laws. A trademark, as used in blogs and social media, can involve rights of privacy and rights of publicity.

It is essential that trademark and other IP practitioners have a solid understanding of the many opportunities and pitfalls of intersecting rights. The intersection of these rights also raises fundamental questions about the nature of trademark law and its relationship to the other areas of IP protection, and how policy should best address these overlaps.

Join the International Trademark Association (INTA) in Munich, Germany, on December 8–9, 2014, at the Westin Grand Munich Hotel for two days of information-packed, advanced-level sessions. Presented by leading authorities in their field, these sessions will deal with these and other emerging issues concerning the overlap of trademark rights with other IP rights.

This conference is cosponsored by the INTA’s Programs and Related Rights Committees and with the kind support of the German Association for the Protection of Intellectual Property (GRUR).

UK patent box "watered down" -- but with a spot of grandfathering

"George Osborne waters down flagship controversial tax break" is the strident headline of this Guardian post by Simon Goodley, subtitled "Patent boxes allow firms to pay much lower taxes on profits from patented inventions, but critics say it gives UK too much of a fiscal advantage". According to this article, in relevant part:

"George Osborne has watered down one of his flagship policies following a long-running dispute with Germany over a controversial UK tax break. ...

The incentives were introduced last year to encourage hi-tech businesses to commercialise their intellectual property in the UK by charging just 10% tax on the resulting income. But Germany led numerous countries in arguing that the regime encouraged artificial shifting of profits to avoid tax elsewhere.

Osborne described the new agreement as “a great deal for Britain” that protected the UK’s vital scientific research while making sure there were international rules that stop aggressive tax avoidance. It would involve the UK winding down its patent box rebates and joining other OECD countries in only granting tax breaks for patents directly tied to research and innovation at home.

Germany’s finance minister, Wolfgang Schäuble, said: “We have reached an important agreement on patent boxes. Preferential tax treatment of intellectual property must be dependent on substantial economic activity. More and more countries are speaking out against allowing too much leeway for large multinationals to minimise their taxes. Just because something is legal, does not mean it is fair in tax terms. Multinationals must contribute their fair share to public budgets – just like any other company has to.”

The Treasury denied it had performed a U-turn on the issue, although it has previously defended its original policy ... [and] countered that it had won important concessions including so-called “grandfathering”, which will allow intellectual property within existing regimes to retain tax benefits until June 2021".

While the notion of the patent box will continue to attract support, not least among patent-exploiting tax-payers, it would be sad if countries were to engage in an unseemly rush to offer the lowest rate for the sake of attracting the relocation of patents alone: tying the tax break to patents grown within the jurisdiction is therefore a wise proposition.  

Mike Mireles' posts on US thinking about patent boxes can be found here and here
"Death of a Travelling Patent Box" by Rob Harrison can be accessed here
Rob's post on the OECD report which gave the UK's patent box scheme a reasonably clean bill of health is here

Thanks go to Chris Torrero for spotting this item

Sale versus licence offline and online: can competition law bridge the doctrinal gap?

"Sale versus licence offline and online: can competition law bridge the doctrinal gap?" is the title of an article in the most recent issue of Oxford University Press's International Journal of Law and Information Technology (Winter 2014) 22 (4): 311-333. The authors are Auckland University of Technology Professors Louise Longdin and Ian Eagles, togetgher with Senior Lecturer in Law Pheh Hoon Lim. According to the abstract:

Disputes involving copyright owners seeking to privately regulate secondary markets for used software and e-music have come before the courts of both the European Union and the USA with wildly dissonant outcomes partly due to very different legislative frameworks but also to very different judicial attitudes to economic factors and developments in digital technology. 

This article considers the extent to which contract can successfully be used to bypass traditional restrictions on the reach of copyright owners’ exclusive right of distribution and also explores the role competition law could play in balancing the escalating tension between private and public interests in an increasingly digital global economy.

This blogger likes the notion of an exploration of the manner in which both consensual and regulatory approaches can be brought to play in seeking to achieve a balance between private and public interests, though he prefers to think of the tension -- whether or not it is escalating -- as itself having a creative function. It's not so much a matter of it being the grit in the oyster of software copyright that produces the pearl; rather, it is an indication of the degree to which the private and public interests can tolerate a non-preferred solution before the private sector simply stops investing in new products or the public interest simply helps itself to that for which it cannot. or will not, pay.

Big budget movies in the UK: good news for tax payers

Not much core expenditure
here, one suspects 

Late last month, on 29 October to be precise, the Finance Act 2014, Section 32 (Film Tax Relief) (Appointed Day) Order 2014 (SI 2014/ 2880) was made. This unattractively-titled provision at least had some attractive content: its effect is to increase the amount of relief available for films if they have incurred a core expenditure exceeding £20 million from 1 April 2014. Core expenditure does not mean expenditure on the naughty bits of the film that seem to be mandatory these days and which make the audience go "Cor!" when they view them.

 According to the Order's Explanatory Note:

This Order appoints 1st April 2014 as the day specified for the purposes of section 32(4) of the Finance Act 2014. Authority for this retrospective effect is given by section 32(6) of that Act. The amendments made by section 32 to the Finance Act 2014 ensure that film tax relief will be available for surrenderable losses at a rate of 25 per cent up to the first £20 million of each production’s UK core production expenditure (to a maximum of 80 per cent of UK core production expenditure) and 20 per cent thereafter (to a maximum of 80 per cent of the UK core production expenditure), for all film productions where the principal photography was not completed before the appointed day – 1st April 2014. Previously the rate of 25 per cent only applied to limited budget films i.e. those with UK core production expenditure up to £20 million.

The minimum UK spending requirement will also change from 25 per cent to 10 per cent for film productions where the principal photography was not completed before 1st April 2014.

Cor!

U.S. Federal Trade Commission and NPE Enter Settlement Agreement

The U.S. Federal Trade Commission, a consumer protection agency, has entered a settlement with non-practicing entity MPHJ Technology Investments, LLC.  The U.S. Federal Trade Commission press release concerning the settlement states, in part:

 The settlement with MPHJ is the first time the FTC has taken action using its consumer protection authority against a patent assertion entity (PAE). PAEs are companies that obtain patent rights and try to generate revenue by licensing to or litigating against those who are or may be using patented technology.

“Patents can promote innovation, but a patent is not a license to engage in deception,” said Jessica Rich, Director of the FTC’s Bureau of Consumer Protection. “Small businesses and other consumers have the right to expect truthful communications from those who market patent rights.”

According to the FTC’s administrative complaint, MPHJ Technology Investments, LLC, bought patents relating to network computer scanning technology, and then told thousands of small businesses that they were likely infringing the patents and should purchase a license. In more than 9,000 letters sent under the names of numerous MPHJ subsidiaries, the complaint alleges, MPHJ falsely represented that many other companies had already agreed to pay thousands of dollars for licenses.

The administrative complaint also alleges that MPHJ’s law firm, Farney Daniels, P.C., authorized letters on the firm’s letterhead that were sent to more than 4,800 small businesses. These letters warned that the firm would file a patent infringement lawsuit against the recipient if it did not respond to the letter. The letters also referenced a two-week deadline and attached a purported complaint for patent infringement, usually drafted for filing in the federal court closest to the small business receiving the letter. In reality, the complaint alleges, the senders had no intention—and did not make preparations—to initiate lawsuits against the small businesses that did not respond to their letters.  No such lawsuits were ever filed.

In the proposed consent order, announced today for public comment, MPHJ, Farney Daniels, and MPHJ’s owner, Jay Mac Rust, agree to refrain from making certain deceptive representations when asserting patent rights, such as false or unsubstantiated representations that a patent has been licensed in substantial numbers or has been licensed at particular prices. The proposed order also would prohibit misrepresentations that a lawsuit will be initiated and about the imminence of such a lawsuit.

The Commission vote to accept the proposed consent order was 5-0.

The fall-out from the consent order will be interesting to watch.  According to the press release, a penalty of up to $16,000 per letter can be assessed for future violations of the law.  The Agreement Containing Consent Order can be found, here.  For additional commentary, see Bloomberg, here.  (Hat tip to Bloomberg BNA). 

Licences and Insolvency: a new book on the block

Licences and Insolvency: A Practical Global Guide to the Effects of Insolvency on IP Licence Agreements, put together by consulting editors Matthias Nordmann, Ulrich Reber and Marcel Willems on behalf of the International Bar Association, was published last month by Globe Law and Business.

The publishers describe this volume as follows:

"The number of insolvencies is increasing by the day, while insolvencies are becoming more and more complex and international. Licences represent an increasingly important part of a company’s assets - be they technology licences, name or trademark licences or licences with regard to text, photo or audiovisual material or software. While insolvency proceedings of licensors or licensees can pose material threats to the prospects of the business concerned, there are still many uncertainties as to the fate of a licence, applicable law, place of jurisdiction in such proceedings and so on.

This practical handbook provides an overview of the most relevant legal issues in over 25 [I counted 26] of the most important business nations around the globe. It provides guidance to licensors, licensees, insolvency practitioners and their attorneys to promote a better understanding of the insolvency mechanisms in these countries and the effect that such proceedings may have upon licence agreements with an insolvent entity".

This blogger is not normally enamoured with titles compiled to this template, which he has often found unhelpfully rigid. They are often of little use when seeking to ascertain the law in any given country, presumably on account of length restrictions in order to prevent imbalance between national contributions, and not much use when seeking to compare the law of the different jurisdictions since the problems encountered by him have never matched the data available.  This volume is however a pleasant and welcome exception, since the subject is one on which there is little in the way of accessible information that is conveniently presented for the IP practitioner who is more comfortable with licensing than with insolvency. This title has the potential to become rather more than a fancy calling card for its contributors and to make itself generally useful in those sad situations in which licensor, licensee or both find themselves without resources -- not just for the parties concerned but for creditors and other adversely affected third parties.  Well done!

Bibliographical data: Hardback, 328 pages. Price: £125. ISBN: 9781909416253. Book's web page here.

Damages for misuse of confidential information: some helpful guidance

The breach of confidence action in Vestergaard Frandsen A/S v Bestnet Europe Ltd and others [2014] EWHC 3159 (Ch)), a vigorously-contested dispute before the courts of England and Wales, has now reached an end, with the assessment by the Chancery Division of the quantum of damages arising from the misuse of information relating to the manufacture of insecticidal mosquito nets.

In short, in relation to nets made using an insecticide developed on the basis of Vestergaard's confidential information, Mrs Justice Rose awarded a lump sum quasi-consultancy fee for the use that Bestnet made of the information in order to arrive at their own subsequently-developed formula and then secure  World Health Organization (WHO) approval for it. No sum was however awarded to compensate Vestergaard in respect of Bestnet's accelerated entry into the market.  This was because, the WHO approval date -- without which there was little market for the product -- would have been the same even if the consultant had developed the later formula from scratch without the benefit of the confidential information.

For those who are interested in money, and issues such as whether the damages you get at the end of the litigation make it worth starting it in the first place, the calculation of damages is always a priority.  Here, damages were awarded for the sale of products the manufacture of which was derived from the misuse of confidential information, even though those products were not actually made using that information. While there was no authority directly on this point, Mrs Justice Rose felt that the principles that underpinned this approach were based on established case law.

IP not a homogeneous asset class: patents are the big risk-bearers

On 5 September IP Finance hosted a contribution from Aritra Chaterjee, "New frontiers in intangible asset financing", which has drawn the following observation from Ron Laurie (Managing Director, Inflexion Point Strategy):

In response to Aritra’s Chaterjee’s excellent guest post on the use of intangible assets as loan collateral, I would like to add the following U.S. perspective.

What patents are all about?

Those of us that have been looking at IP collateralisation over the past several years recognize that valuation challenges are at the heart of the “problem".  However, it is of critical importance to recognize that the valuation uncertainty varies considerably with the type of IP under consideration. More specifically, the risk profile impacting liquidation value uncertainty in the event of default differs materially depending on the type of IP involved. Most of the IP-backed finance that occurred from 1995 to 2005 involved “brands" (trademark IP) and “content” such as music and film (copyright IP) which carry much less legal risk — in terms of validity, scope of rights, and infringement — than do patents. This is even more true today in light of

(1) the recent U.S. Supreme Court patent-related decisions (e.g., Alice, Nautilus, Octane); 

(2) the new America Invents Act-based administrative procedures for challenging the validity of issued patents in the USPTO; 

(3) the practical unavailability of injunctive relief for patent infringement after eBay; and 

(4) the rapidly changing Federal Circuit and District Court case law affecting the calculation of reasonable royalty damages for patent infringement, the net effect of which is to lower the expected return from enforcing patent rights in court.

Bottom line: in this area as in others, one should be careful in talking about “IP” as if it were a homogeneous class of rights.

Thanks, Ron!

Litigation-Proof Patents: a sequel to True Patent Value

In September of last year this weblog posted a review by Neil Wilkof of US patent attorney Larry M. Goldstein's book True Patent Value (the details of which you can check out here). A little over a year later, the same author announces the launch of his new book, enticingly entitled Litigation-Proof Patents: Avoiding the Most Common Patent Mistakes.  This book, which is so hot off the press that the ink is still drying, will be reviewed in due course on this weblog.  Together with True Patent Value, Litigation-Proof Patents is part of the author's Patent Quality trilogy, the third volume of which -- Patent Portfolios: Quality, Creation, and Cost -- is promised by the author to be coming soon.

According to the information available from the Amazon page from which it is being sold, it

" ... explains the principles of excellent patents, presents the ten most common errors in patents, and details a step-by-step method for avoiding these common errors. Specific patents are analyzed and shown to commit or avoid the most common patent mistakes. 

The book includes four chapters. 

• First, a step-by-step process for writing outstanding patents that capture all the innovative points of an invention and that avoid the most common patent mistakes. 

• Second, principles of litigation-proof patents, including characteristics of good patent claims, Key Claim Terms, patent value, seminal patents, and tips for writing patent applications. 

• Third, the ten most common mistakes that appear frequently in patents, and that destroy both patent quality and patent value. 

Litigation-proof?

• Fourth, five patents that illustrate the concept of “litigation-proof patents”. 

These patents include the Hedy Lamarr frequency hopping patent from World War II, the patents for the board game Monopoly®, and the “slide-to-unlock” mobile phone patent that Apple asserted against Samsung ..." 

This book is addressed to (i) anyone writing a patent who wants to achieve the highest-possible quality, (ii) patent evaluators who want to understand whether patents being reviewed suffer from value-destroying mistakes, and (iii) patent managers and heads of IP departments who are managing significant patent portfolios and want to understand the relative quality of their portfolios.