Amster Rothstein & Ebenstein, LLP - Intellectual Property Law http://www.arelaw.com/ Amster, Rothstein & Ebenstein is a well-established mid-sized legal firm engaged exclusively in the practice of intellectual property law, including patents, trademarks, copyrights, unfair competition and related matters. Since our inception in 1953, we have earned an impressive record of successes for our clients, from individuals to multinational corporations, both domestic and worldwide. These successes are borne of the vigorous application of legal expertise, innovation and objective analysis. en Tue, 25 Apr 2017 22:21:27 +0000 Floodlight Design CMS In The Press:<br>LAW360 REPORTS ON IPR INSTITUTION DECISION IN FAVOR OF FIRM'S CLIENT ASKELADDEN LLC AGAINST N5 TECHNOLOGIES, INC.<br> http://www.arelaw.com/publications/view/inthepress042517/ <div>Law360 reported on an institution decision in favor of the firm's client Askeladden LLC by the Patent Trial and Appeal Board (PTAB) in an inter partes review proceeding filed by partner Charles R. Macedo and senior counsel Mark Berkowitz of Amster Rothstein &amp; Ebenstein LLP.</div> <div>&nbsp;</div> <div><b><a href="/images/file/Institution%20Decision.pdf" target="_blank">Askeladden Wins PTAB Review Of User Authentication Patent</a></b></div> <div>(Subscription to Law360 required to a access article)</div> <div><br />Link to Decision here: <a href="https://www.law360.com/ip/articles/916412/askeladden-wins-ptab-review-of-user-authentication-patent">https://www.law360.com/ip/articles/916412/askeladden-wins-ptab-review-of-user-authentication-patent</a></div> Tue, 25 Apr 2017 00:00:00 +0000 http://www.arelaw.com/publications/view/inthepress042517/ In The Press:<br>Patently-O reports on Petition for Certiorari to the U.S. Supreme Court filed by Charles R. Macedo and Sandra Hudak of Amster, Rothstein & Ebenstein LLP on behalf of Broadband iTV, Inc.<br> http://www.arelaw.com/publications/view/inthepress042017/ <div>See article here:&nbsp;<a href="https://patentlyo.com/patent/2017/04/supreme-challenging-eligibility.html" target="_blank">https://patentlyo.com/patent/2017/04/supreme-challenging-eligibility.html</a></div> <div>&nbsp;&nbsp;</div> Click to download pdf -&nbsp;<a href="http://www.arelaw.com/images/Broadband%20iTV,%20Inc_%20v_%20Hawaiian%20Telecom,%20Inc_,%20Petition%20for%20a%20Writ%20of%20Certiorari.pdf" target="_blank"><em>Broadband iTV Inc. v. Hawaiian Telcom Inc. et al.</em>&nbsp;- Petition for a Writ of Certiorari</a> Thu, 20 Apr 2017 00:00:00 +0000 http://www.arelaw.com/publications/view/inthepress042017/ In The Press:<br>IPLaw360 reports on Petition for Certiorari filed by Charles R. Macedo and Sandra Hudak at the firm<br> http://www.arelaw.com/publications/view/in-the-press042017/ <a href="https://www.law360.com/ip/articles/914591/supreme-court-told-lower-courts-misinterpreting-alice?nl_pk=d0922d0a-0be9-4c30-9ba2-bd52792d761c&amp;utm_source=newsletter&amp;utm_medium=email&amp;utm_campaign=ip" target="_blank">Click here for link to article</a> (subscription required).&nbsp; <a href="http://www.arelaw.com/images/Broadband%20iTV,%20Inc_%20v_%20Hawaiian%20Telecom,%20Inc_,%20Petition%20for%20a%20Writ%20of%20Certiorari.pdf" target="_blank">Click here for link to Petition</a> Thu, 20 Apr 2017 00:00:00 +0000 http://www.arelaw.com/publications/view/in-the-press042017/ Broadband iTV Inc. v. Hawaiian Telcom Inc. et al. - Petition for a Writ of Certiorari http://www.arelaw.com/publications/view/amicus041417/ Click to download pdf -&nbsp;<a href="/images/Broadband iTV, Inc_ v_ Hawaiian Telecom, Inc_, Petition for a Writ of Certiorari.pdf" target="_blank"><em>Broadband iTV Inc. v. Hawaiian Telcom Inc. et al.</em> - Petition for a Writ of Certiorari</a> Fri, 14 Apr 2017 00:00:00 +0000 http://www.arelaw.com/publications/view/amicus041417/ Differing diagnoses for European and US patents. Nature Biotechnology 35(4): 334-335) http://www.arelaw.com/publications/view/041317/ <div m0="" x0="" h6="" y8="" ff5="" fs4="" fc0="" sc0="" ls6="">Medical diagnostic patent applications in the United States and Europe face diverging fates</div><div m0="" x0="" h6="" y9="" ff5="" fs4="" fc0="" sc0="" ls6="">following the Supreme Court&rsquo;s decision in <span ws9="">Mayo -- <a href="http://rdcu.be/q0qu" target="_blank">See full article here</a>&nbsp;</span></div> Thu, 13 Apr 2017 00:00:00 +0000 http://www.arelaw.com/publications/view/041317/ 95th Annual Dinner in Honor of the Federal Judiciary http://www.arelaw.com/publications/view/nyipla/ <div><a href="/" target="_blank">Anthony F. Lo Cicero,</a> <a href="http://www.arelaw.com/professional/cmacedo/" target="_blank">Charles Macedo,</a>&nbsp;<a href="http://www.arelaw.com/professional/dgoldberg/" target="_blank">David Goldberg</a></div><div><br />Each year, the New York Intellectual Property Law Association (&ldquo;NYIPLA&rdquo;) hosts its annual dinner in honor the Federal Judiciary. &nbsp;This year, the 95th Annual Dinner in Honor of the Federal Judiciary will be held at:<br /><br /><strong>New York Hilton Midtown<br /></strong><br /> Amster, Rothstein &amp; Ebenstein LLP is pleased to support this event, and will be hosting a reception at the <strong>Lincoln Suite </strong>in the hotel.</div> <div>&nbsp;</div> <div>Please stop by and join us for refreshments, entertainment and to catch up.</div> <div>&nbsp;</div> <div>We look forward to seeing you at this great event.</div> <div>&nbsp;</div> <div><strong><em>Anthony F. Lo Cicero, Past President Emeritus</em></strong></div><div><strong><em>Charles R. Macedo, Board Member</em></strong></div><div><strong><em>David Goldberg, Co-Chair, Amicus Brief Committee</em></strong></div><div><em>&nbsp;</em></div><div><em>And the rest of your friends and colleagues at </em></div><div><strong><em>Amster, Rothstein &amp; Ebenstein LLP<br /></em></strong></div> Fri, 31 Mar 2017 00:00:00 +0000 http://www.arelaw.com/publications/view/nyipla/ ARE Copyright Law Alert:<br>Supreme Court Clarifies Standard of “Separability” for Copyright Protection for Features Incorporated into Design of Useful Article http://www.arelaw.com/publications/view/alert033017/ On March 22, 2017, the Supreme Court of the United States issued its decision in <i>Star Athletica, L.L.C. v. Varsity Brands, Inc.</i>, affirming the decision of the United States Court of Appeals for the Sixth Circuit which held that graphic designs appearing on cheerleading uniforms were copyrightable.&nbsp; Slip op. at 2-3.&nbsp; The Court provided long sought after clarification as to what constitutes &ldquo;separability&rdquo; in the context of clothing, holding that an artistic feature incorporated into the design of clothing &ldquo;is eligible for copyright protection if the feature:<br /><br /> <div style="margin-left: 40px;">(1) can be perceived as a two- or three-dimensional work of art separate from the useful article and<br /><br /> (2) would qualify as a protectable pictorial, graphic, or sculptural work either on its own or in some other medium if imagined separately from the useful article.&rdquo;&nbsp;</div> <div><br />Slip op. at 17.&nbsp;</div> <div><br />The Copyright Act provides protection for &ldquo;original works of authorship fixed in any tangible medium of expression,&rdquo; including &ldquo;pictorial, graphic, and sculptural works.&rdquo; &nbsp;17 U.S.C. &sect;&nbsp;102(a)(5).&nbsp; However, useful articles are not entitled to copyright protection.&nbsp; Accordingly, the Copyright Act provides that &ldquo;the design of a useful article, as defined in this section, shall be considered a pictorial, graphic, or sculptural work only if, and only to the extent that, such design incorporates pictorial, graphic, or sculptural features that <b><i>can be identified separately from, and are capable of existing independently of, the utilitarian aspects of the article</i></b>.&rdquo;&nbsp; 17 U.S.C. &sect;&nbsp;101 (emphasis added).&nbsp; The emphasized language is the crux of the current dispute, and where categories of goods have long been found to include &ldquo;separable&rdquo; and thus, copyrightable designs (such as lamps, belt buckles, and jewelry), clothing has generally been immune.</div> <div><br />Here, Varsity Brands, Inc., Varsity Spirit Corporation, and Varsity Spirit Fashions &amp; Supplies, Inc. (collectively, &ldquo;Varsity Brands&rdquo;) filed suit against Star Athletica, LLC (&ldquo;Star Athletica&rdquo;) asserting copyright infringement of five, two-dimensional designs such as chevrons that are sewn onto the surface of cheerleading uniforms.&nbsp; In response, Star Athletica argued that the designs did not qualify as protectable pictorial, graphic, or sculptural works.&nbsp; The District Court for the Western District of Tennessee agreed and entered summary judgement for Star Athletica on the ground that &ldquo;it is not possible to physically or conceptually sever Varsity&rsquo;s designs from the utilitarian function of the resulting cheerleading uniforms.&rdquo;&nbsp; <i>Varsity Brands, Inc. v. Star Athletica, LLC</i>, No. 10-2508, 2014 U.S. Dist. LEXIS 26279, at *26 (W.D. Tenn. Mar. 1, 2014).</div> <div><br />In reviewing the district court&rsquo;s decision, the United States Court of Appeals for the Sixth Circuit reversed and concluded that the graphic features of Varsity Brand&rsquo;s designs are copyrightable subject matter.&nbsp; <i>Varsity Brands, Inc. v. Star Athletica, LLC</i>, 799 F.3d 468, 492 (6th Cir. 2015).&nbsp; The Court of Appeals held that &ldquo;the Copyright Act protects the &lsquo;pictorial, graphic, or sculptural features&rsquo; of a design of a useful article <b><i>even if those features cannot be removed physically from the useful article, as long as they are conceptually separable from the utilitarian aspects of the article</i></b>.&rdquo;&nbsp; <i>Id. </i>at 483 (emphasis added).&nbsp; The Court of Appeals rejected the argument that Varsity Brand&rsquo;s designs were &ldquo;inextricable intertwined with the utilitarian aspects of a cheerleading function.&rdquo;&nbsp; <i>Id. </i>at 490.&nbsp; Rather, &ldquo;the arrangement of stripes, chevrons, color blocks, and zigzags are &lsquo;wholly unnecessary to the performance of&rsquo; the garment&rsquo;s ability to cover the body, permit free movement, and wick moisture.&rdquo;&nbsp; <i>Id. </i>at 492.</div> <div><br />In affirming the Court of Appeals decision, the Supreme Court looked to the history and text of the Copyright Act which indicates that the exclusive right of a copyright owner to reproduce copyrighted work &ldquo;includes the right to reproduce the [copyrighted] work in or on any kind of article, whether useful or otherwise.&rdquo;&nbsp; Slip op. at 8.&nbsp; Thus, the Supreme Court considered the mirror image of this language in Section 101 to clearly extend copyright protection to pictorial, graphic, and sculptural works regardless of whether they were created as features of useful articles.&nbsp; <i>Id.&nbsp; </i>Thus, &ldquo;a feature of the design of a useful article is eligible for copyright if, when identified and imagined apart from the useful article, it would qualify as a pictorial graphic, or sculptural work either on its own or when fixed in some other tangible medium.&rdquo;&nbsp; <i>Id.</i></div> <div><br />The Supreme Court (per Justice Thomas) found that the application of this rule to Varsity Brand&rsquo;s designs was &ldquo;straightforward&rdquo; since they have &ldquo;pictorial, graphic, or sculptural qualities&rdquo; and if separated from the cheerleading uniforms would qualify for copyright protection as a two-dimensional work of art. <i>&nbsp;Id.</i> at 10-11.&nbsp; The Supreme Court rejected the argument that an artistic feature may exist independently only if the useful article from which it was extracted would remain equally useful.&nbsp; <i>Id.</i> at 12-15.&nbsp; Likewise the Supreme Court rejected Star Athletica&rsquo;s argument that its test should incorporate two objective components such as &ldquo;whether the design elements can be identified as reflecting the designer&rsquo;s artistic judgment exercised independently of functional influence,&rdquo; and whether the design feature &ldquo;would still be marketable to some significant segment of the community without its utilitarian function.&rdquo;&nbsp; <i>Id.</i> at 15-16.&nbsp; Finally, the Supreme Court rejected the argument that allowing &ldquo;surface decorations to qualify as a &lsquo;work of authorship&rsquo; is inconsistent with Congress&rsquo; intent to entirely exclude industrial design from copyright.&rdquo;&nbsp; <i>Id.</i> at 16-17.</div> <div><br />In her concurrence, Justice Ginsburg explained that consideration of the separability test was unwarranted since the designs at issue are not designs of useful articles, but rather are copyrightable pictorial or graphic works themselves which are reproduced on useful articles.&nbsp; Conc. op. at 1.&nbsp;</div> <div><br />Justice Breyer, joined by Justice Kennedy, dissented on the basis that Varsity Brand&rsquo;s designs do not meet the majority&rsquo;s test for copyrightability since they could not exist independently of the utilitarian aspects of the cheerleading uniform.&nbsp; Dissent op. at 1.</div> <div><br />We will continue to monitor the courts for the latest applications of the Supreme Court&rsquo;s new two-part test for determining whether an artistic feature incorporated into the design of a useful article is eligible for copyright protection: &ldquo;(1) can it be perceived as a two- or three-dimensional work of art separate from the useful article and (2) would it qualify as a protectable pictorial, graphic, or sculptural work either on its own or in some other medium if imagined separately from the useful article.&rdquo;&nbsp; Slip op. at 17.&nbsp;</div> <div>&nbsp;</div> <div>*Chester Rothstein and Charles R. Macedo are partners and Jessica Capasso is an associate at Amster, Rothstein &amp; Ebenstein LLP.&nbsp; Charles R. Macedo and David Goldberg were counsel for amicus New York Intellectual Property Law Association before the Supreme Court of the United States in this case.&nbsp; Their practice specializes in intellectual property issues, including litigating trademark, patent, and other intellectual property disputes.&nbsp; They may be reached at <a href="mailto:crothstein@arelaw.com">crothstein@arelaw.com</a>, <a href="mailto:cmacedo@arelaw.com">cmacedo@arelaw.com</a>, <a href="mailto:jcapasso@arelaw.com">jcapasso@arelaw.com</a> and <a href="mailto:dgoldberg@arelaw.com">dgoldberg@arelaw.com</a>.</div> Thu, 30 Mar 2017 00:00:00 +0000 http://www.arelaw.com/publications/view/alert033017/ Supreme Court Clarifies Lost Profit Remedy for Design Patent Infringement http://www.arelaw.com/publications/view/jiplp032417/ <b><i>Samsung Electronics Co., Ltd. v. Apple, Inc.<br /><br /></i></b><div><b><u>Abstract</u></b></div> <div><br />On December 6, 2016, the United States Supreme Court issued its decision in <i>Samsung Electronics Co., Ltd. v. Apple Inc.</i>, unanimously reversing the United States Court of Appeals for the Federal Circuit&rsquo;s decision which affirmed the award to Apple of $399 million in damages for Samsung&rsquo;s design patent infringement -- the entire profit Samsung made from its sales of infringing smartphones.&nbsp; The Court reversed the decision of the Federal Circuit as inconsistent with Section 289 of the Patent Act and remanded the case for further proceedings consistent with the opinion of the Court.&nbsp; Slip op. at 8-9.&nbsp;</div> <div><b><u><br />Legal Context</u></b></div> <div><br />Pursuant to Section 289 of the Patent Act, damages specific to design patent infringement are as follows:</div> <div>&nbsp;</div> <div style="margin-left: 40px;">Whoever during the term of a patent for a design, without license of the owner, (1) applies the patented design, or any colorable imitation thereof, to any article of manufacture for the purpose of sale, or (2) sells or exposes for sale any article of manufacture to which such design or colorable imitation has been applied shall be liable to the owner to the extent of his total profit, but not less than $250, recoverable in any United States district court having jurisdiction of the parties.</div> <div style="margin-left: 40px;">&nbsp;</div> <div style="margin-left: 40px;">Nothing in this section shall prevent, lessen, or impeach any other remedy which an owner of an infringed patent has under the provisions of this title, but he shall not twice recover the profit made from the infringement.</div> <div>&nbsp;</div> <div>35 U.S.C. &sect;&nbsp;289.</div> <div><br />The issue as decided by the Court was whether, in the case of a multi-component product, the term &ldquo;&lsquo;article of manufacture&rsquo; must always be the end product sold to the consumer or whether it can also be a component of that product.&rdquo; &nbsp;Slip op. at 5.&nbsp; Here, the distinction was between the smartphone in its entirety or the portion of the smartphone that was the subject of the patented design (e.g., the front face).</div> <div><b><u><br />Facts</u></b></div> <div><br />In 2011, Apple sued Samsung in the United States District Court for the Northern District of California, asserting, <i>inter alia</i>, that certain of Samsung&rsquo;s smartphones infringed Apple&rsquo;s design patents which covered the iPhone&rsquo;s rectangular shape with rounded corners and screen display.&nbsp; After a prolonged trial, the jury found that Samsung did infringe Apple&rsquo;s design patents related to Apple&rsquo;s iPhone.&nbsp; The district court upheld the jury&rsquo;s finding of infringement and $399 million in damages -- the entire profit Samsung made from its sales of the infringing smartphones.&nbsp;</div> <div><br />On appeal, the Federal Circuit ultimately affirmed the jury&rsquo;s verdict on the design patent infringement and the related damages award. &nbsp;The Federal Circuit rejected Samsung&rsquo;s argument &ldquo;that the profits awarded should have been limited to the infringing &lsquo;article of manufacture&rsquo;&rdquo; and &ldquo;not the entire infringing product.&rdquo; &nbsp;786 F. 3d 983, 1002 (2015). &nbsp;The Federal Circuit found that &ldquo;limit[ing] the damages&rdquo; award was not required since the &ldquo;innards of Samsung&rsquo;s smartphones were not sold separately from their shells as distinct articles of manufacture to ordinary purchasers.&rdquo; <i>Id.</i>&nbsp;</div> <div><br />The Supreme Court granted certiorari and reversed the decision of the Federal Circuit.</div> <div><b><u><br />Analysis</u></b></div> <div><br />Relying upon the text of the statute and the ordinary meaning of the terms, the Court found that &ldquo;the term &lsquo;article of manufacture&rsquo; is broad enough to encompass both a product sold to a consumer as well as a component of that product.&nbsp; That a component may be integrated into a larger product, in other words, does not put it outside the category of articles of manufacture.&rdquo;&nbsp; Slip op. at 6.&nbsp; The Court noted that this reading is consistent with 35 U.S.C. &sect;&nbsp;171(a) which allows for design patent protection for only a component of a multicomponent part, as well as 35 U.S.C. &sect;&nbsp;101 which permits patent protection for &ldquo;any new and useful . . . manufacture,&rdquo; including parts of a machine separate from the machine itself.&nbsp; <i>Id. </i>at 7.</div> <div><br />The Court thus set forth a new &ldquo;two step&rdquo; test for &ldquo;[a]rriving at a damages award under &sect; 289&rdquo;:</div> <div><br />1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &ldquo;identify the &lsquo;article of manufacture&rsquo; to which the infringed design has been applied.&rdquo;; and</div> <div><br />2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &ldquo;calculate the infringer&rsquo;s total profit made on that article of manufacture.&rdquo;</div> <div><i><br />Id.</i> at 5.</div> <div><br />With respect to the first step, the Court declined to set forth a test for identifying the relevant article of manufacture.&nbsp; <i>Id.</i> at 58.</div> <div><br />While not necessary to the resolution of the case, we note that the Court did reaffirm its prior infringement test from <i>Gorham Co. v. White</i>, 14 Wall. 511 (1872), stating that &ldquo;[t]his Court has explained that a design patent is infringed &lsquo;if, in the eye of an ordinary observer, giving such attention as a purchaser usually gives, two designs are substantially the same.&rsquo;&rdquo;&nbsp; Slip op. at 2 (quoting <i>Gorham Co. v. White</i>, 14 Wall. 511, 528 (1872)).&nbsp;</div> <div><b><u><br />Practical Significance</u></b></div> <div><br />While, on the one hand, the decision has allowed for an &ldquo;article of manufacture&rdquo; to be a component of what is actually sold to the consumer, on the other hand, it also confirms that the damages are the &ldquo;lost profits&rdquo; associated with that article.&nbsp;&nbsp; Unfortunately, as the Court failed to set forth a test to identify that which constitutes the relevant article of manufacture, it remains to be seen how district courts will determine whether the article of manufacture is less than the entire product.</div> <div>&nbsp;</div> <div>&nbsp;</div> <div>*Charles R. Macedo is a partner and Jessica Capasso and Michael Sebba are associates at Amster, Rothstein and Ebenstein LLP.&nbsp; Their practice specializes in intellectual property issues, including litigating patent, trademark and other intellectual property disputes.&nbsp; They may be reached at <a href="mailto:cmacedo@arelaw.com">cmacedo@arelaw.com</a>, <a href="mailto:jcapasso@arelaw.com">jcapasso@arelaw.com</a> and <a href="mailto:msebba@arelaw.com">msebba@arelaw.com</a>. &nbsp;</div> <div>&nbsp;</div> <div><div><div>Mr. Macedo is also the author of&nbsp;<em>The Corporate Insider&rsquo;s Guide to US Patent Practice</em>.<br />&nbsp;</div></div>&copy; The Author(s) 2017. Published by Oxford University Press. All rights reserved.</div><div>&nbsp;</div> Fri, 24 Mar 2017 00:00:00 +0000 http://www.arelaw.com/publications/view/jiplp032417/ Patently-O Reports on Amicus Brief Submitted by Amster, Rothstein & Ebenstein on Behalf of the NYIPLA in Oracle http://www.arelaw.com/publications/view/inthepress030317/ (February 20, 2017)&nbsp; Patently-O today mentions an Amicus Brief submitted by attorneys including Amster, Rothstein &amp; Ebenstein&rsquo;s <a href="http://www.arelaw.com/professional/cmacedo/" target="_blank">Charles R. Macedo</a> and <a href="http://www.arelaw.com/professional/ahassett/" target="_blank">Annemarie Hassett</a> on behalf of the New York Intellectual Property Law Association in <i>Oracle America, Inc. v. Google Inc.</i>, Nos. 2017-1118, -1202 (Fed. Cir.).&nbsp; In this case, the United States Court of Appeals for the Federal Circuit is being asked to set parameters for the scope of the fair use defense in copyright law, including what constitutes a &ldquo;transformative use&rdquo; of computer programming code.&nbsp; The article is available at <a href="http://patentlyo.com/patent/2017/02/google-oracle-copyrighted.html" target="_blank">http://patentlyo.com/patent/2017/02/google-oracle-copyrighted.html</a> and the NYIPLA&rsquo;s Amicus Brief is available at <a href="https://www.nyipla.org/nyipla/AmicusBriefsNews.asp" target="_blank">https://www.nyipla.org/nyipla/AmicusBriefsNews.asp</a>.&nbsp; Fri, 03 Mar 2017 00:00:00 +0000 http://www.arelaw.com/publications/view/inthepress030317/ Patent Law Alert: <br>In <i>Life Technologies Corp. v. Promega Corp.,<i/> U.S. Supreme Court Held That Supply of a Single Component of a Multicomponent Invention for Manufacture Abroad Does Not Give Rise to Liability for Patent Infringement Under 35 U.S.C. § 271(f)(1)<br> http://www.arelaw.com/publications/view/alert022417/ <div>On February 22, 2017, the United States Supreme Court issued its decision in <i>Life Technologies Corp. v. Promega Corp.</i>, unanimously reversing the United States Court of Appeals for the Federal Circuit&rsquo;s decision that the supply of a single component of a multicomponent invention for manufacture abroad may trigger liability for patent infringement under 35 U.S.C. &sect; 271(f)(1).&nbsp; &nbsp;&nbsp;</div> <div><br />The full text of Section 271(f)(1) reads as follows:<br />&nbsp;</div> <div style="margin-left: 40px;">Whoever without authority supplies or causes to be supplied in or from the United States <b><i>all or a substantial portion of the components of a patented invention</i></b>, where such components are uncombined in whole or in part, in such manner as to actively induce the combination of such components outside of the United States in a manner that would infringe the patent if such combination occurred within the United States, shall be liable as an infringer.</div> <div><br />35 U.S.C. &sect;&nbsp;271(f)(1) (emphasis added).</div> <div><br />The issue before the Supreme Court was &ldquo;whether the supply of <b><i>a single component</i></b> of a multicomponent invention is an infringing act under 35 U.S.C. &sect;271(f)(1).&rdquo;&nbsp; Slip op. at 4 (emphasis added).&nbsp; The Federal Circuit had previously decided that the scope of the term &ldquo;a substantial portion of the components of a patent invention&rdquo; recited in Section 271(f)(1) may encompass a single important component of the invention.&nbsp; <i>See id</i>.&nbsp; The Supreme Court rejected the Federal Circuit&rsquo;s broad interpretation of Section 271(f)(1).</div> <div><br />First, the Supreme Court determined that the term &ldquo;substantial portion&rdquo; in the statute refers to a <b><i>quantitative</i></b> measurement rather than a qualitative measurement.&nbsp; <i>See</i> slip op. at 5-8.&nbsp; The Court then tackled the question of &ldquo;whether, as a matter of law, a single component can ever constitute a &lsquo;substantial portion&rsquo; so as to trigger liability under &sect;271(f)(1).&rdquo;&nbsp; Slip op. at 8.&nbsp; After examining the text, context, and structure of Section 271(f)(1), the Court concluded that Section 271(f)(1) does not cover the supply of a single component of a multicomponent invention.&nbsp; <i>See</i> Slip op. at 8-10.&nbsp;</div> <div><br />The Court, however, provided no guidance as to how many components of a multicomponent invention would be required to constitute &ldquo;a substantial portion&rdquo; to trigger liability under Section 271(f)(1):<br />&nbsp;&nbsp;</div> <div style="margin-left: 40px;">We do not today define how close to &ldquo;all&rdquo; of the components &ldquo;a substantial portion&rdquo; must be.&nbsp; We hold only that one component does not constitute &ldquo;all or a substantial portion&rdquo; of a multicomponent invention under &sect;271(f)(1).</div> <div><br />Slip op. at 10.&nbsp; The concurring opinion by Justices Alito and Thomas further emphasized this point:<br />&nbsp;</div> <div style="margin-left: 40px;">[W]hile the Court holds that a single component cannot constitute a substantial portion of an invention&rsquo;s components for &sect;271(f)(1) purposes, I do not read the opinion to suggest that <i>any</i> number greater than one is sufficient.&nbsp; In other words, today&rsquo;s opinion establishes that more than one component is necessary, but does not address <i>how much</i> more.</div> <div><br />Slip op. at 1 (Alito, J., concurring) (emphasis in original).&nbsp; &nbsp;</div> <div><br />We will continue to monitor the Courts for the latest developments on this issue.</div> <div><br />*Charles R. Macedo is a partner and Jung S. Hahm is senior counsel at Amster, Rothstein and Ebenstein LLP.&nbsp; Their practice specializes in intellectual property issues, including litigating patent, trademark and other intellectual property disputes.&nbsp; They may be reached at <a href="mailto:cmacedo@arelaw.com">cmacedo@arelaw.com</a> and <a href="mailto:jhahm@arelaw.com">jhahm@arelaw.com</a>. &nbsp;</div> Fri, 24 Feb 2017 00:00:00 +0000 http://www.arelaw.com/publications/view/alert022417/ Brief for Amicus Curiae NYIPLA In Support of Respondent, Impression Products, Inc. v. Lexmark International, Inc. (Fed. Cir. Feb. 22, 2017) http://www.arelaw.com/publications/view/amicus022317/ <strong>Click to download pdf: &nbsp;</strong><a href="/images/file/Brief%20for%20Amicus%20Curiae%20NYIPLA%20In%20Support%20of%20Respondent,%20Impression%20Products,%20Inc_%20v_%20Lexmark%20International,%20Inc_%20(Fed_%20Cir_%20%20Feb_%2022,%202017).pdf" target="_blank">Brief for Amicus Curiae NYIPLA In Support of Respondent, Impression Products, Inc. v. Lexmark International, Inc. (Fed. Cir. &nbsp;Feb. 22, 2017)</a> Thu, 23 Feb 2017 00:00:00 +0000 http://www.arelaw.com/publications/view/amicus022317/ Brief for Amicus Curiae NYIPLA in Support of Neither Party, Oracle America, Inc. v. Google Inc. (U.S. February 17, 2017) http://www.arelaw.com/publications/view/amicus022217/ <strong>Click to download pdf:&nbsp;</strong><span style="font-size:11.0pt;font-family:" new=""><a href="/images/file/2017-1118%20-1202%20Brief%20for%20Amicus%20Curiae%20NYIPLA%20in%20Support%20of%20Neither%20Party.pdf" target="_blank">Brief for Amicus Curiae NYIPLA in Support of Neither Party, Oracle America, Inc. v. Google Inc. (U.S. February 17, 2017)</a></span> Wed, 22 Feb 2017 00:00:00 +0000 http://www.arelaw.com/publications/view/amicus022217/ Practical Law <br>General Contract Clauses: Confidentiality Agreement Clauses After the Defend Trade Secrets Act<br> http://www.arelaw.com/publications/view/practicallaw012517/ <div><a href="/images/file/General%20Contract%20Clauses%20Confidentiality%20Agreement%20Clauses%20After%20the%20Defend%20Trade%20Secrets%20Act%20(3).pdf" target="_blank">General Contract Clauses:&nbsp;Confidentiality Agreement Clauses&nbsp;After the Defend Trade Secrets Act (3)</a></div> Wed, 25 Jan 2017 00:00:00 +0000 http://www.arelaw.com/publications/view/practicallaw012517/ In The Press:<br>Askeladden LLC Announces Amster Rothstein & Ebenstein LLP Filed IPR On Its Behalf Against Verify Smart<br> http://www.arelaw.com/publications/view/inthepress011917/ <div><div><strong>Askeladden Urges Review of Verify Smart&rsquo;s Patent Related to Identity Verification in Electronic Transactions<br /></strong></div><div><em>Seeks cancellation of all claims in view of known authentication and verification technologies &nbsp; &nbsp;</em></div><p><a href="http://www.patentqualityinitiative.com/-/media/pqi/files/press%20releases/pqi%20-%20verify%20smart%20ipr%20release.pdf?la=en" target="_blank">Download PDF of Press Release</a></p></div><div>Askeladden LLC, as part of its Patent Quality Initiative, is challenging the validity of U.S. Patent No. 8,285,648 which Verify Smart Corporation has asserted against technology and financial services companies including Apple, Facebook, Microsoft and Discover. Askeladden&rsquo;s <a href="http://www.patentqualityinitiative.com/about%20pqi/patent%20challenge%20committee" target="_blank">Patent Challenge Committee</a>&mdash;respected and experienced experts in the field of patent law&mdash;decided to file this challenge as part of Askeladden&rsquo;s efforts to protect innovation in the financial and technology industries.&nbsp;<br /><br /> Verify Smart&rsquo;s patent is directed to a system and methods for verifying the identity of users in the course of electronic transactions. Askeladden&rsquo;s petition for Inter Partes Review (IPR), filed yesterday with the Patent Trial and Appeal Board (PTAB), argues that the patent&rsquo;s claims were known and obvious at the time the application for the patent was filed and therefore should be found unpatentable by the PTAB.&nbsp;<br /><br />&ldquo;Lawsuits based on poor quality patents undermine the core purposes of the patent system,&rdquo; said Sean Reilly, General Counsel of Askeladden. &ldquo;We look forward to continuing our efforts to promote patent quality in 2017.&rdquo;&nbsp;<br /><br />Askeladden is represented by Amster, Rothstein &amp; Ebenstein LLP.<br /><br /><strong>About Patent Quality Initiative</strong><br /> Askeladden is an education, information and advocacy organization with the goal of improving the understanding, use and reliability of patents in financial services and other industries. As part of its Patent Quality Initiative, Askeladden strives to promote better patents and patent holder behaviors by regularly filing amicus briefs, Inter Partes Reviews (IPRs) and engaging in educational activities.</div> Thu, 19 Jan 2017 00:00:00 +0000 http://www.arelaw.com/publications/view/inthepress011917/ In Practice: <br>CORPORATE-LEGAL-DEPARTMENTS, Drafting Guide - Practical Guidance: Non-Disclosure and Confidentiality<br> http://www.arelaw.com/publications/view/bnabloomberg01-18-17/ <div><strong><a href="/images/In Practice CORPORATE-LEGAL-DEP.pdf" target="_blank">Practical Guidance: Non-Disclosure and Confidentiality Agreements</a></strong><br /><br /><strong>Purpose</strong>: This Practical Guidance discusses key issues that should be considered in&nbsp;drafting confidentiality agreements in view of the Defense Against Trade Secrets Act of 2016. It identifies key&nbsp;clauses typically included in such agreements and provides guidance on considerations in drafting clause.<br />&nbsp;</div><div>The guidance was authored by attorneys <a href="mailto:cmacedo@arelaw.com">Charles R. Macedo</a>, and <a href="mailto:msebba@arelaw.com">Michael Sebba</a>, of <a href="http://www.arelaw.com" target="_blank">Amster, Rothstein &amp;&nbsp;Ebenstein LLP</a>, New York, N.Y. <a href="http://www.arelaw.com/professional/cmacedo/" target="_blank">Mr. Macedo</a> is a partner with the firm, and litigates all areas of intellectual&nbsp;property law, including patent, trademark and copyright law, with a special emphasis in complex litigation&nbsp;and appellate work. <a href="http://www.arelaw.com/professional/michael-sebba/" target="_blank">Mr. Sebba</a>, an associate, is an intellectual property litigator and prosecutor.</div> Wed, 18 Jan 2017 00:00:00 +0000 http://www.arelaw.com/publications/view/bnabloomberg01-18-17/ ARE Patent Law Alert:<br>USPTO Updates Guidance on Patent Subject Matter Eligibility With New Examples Of Patent-Eligible Subject Matter<br> http://www.arelaw.com/publications/view/alert011017/ <div>As we reported last November, the U.S. Patent and Trademark Office (&ldquo;PTO&rdquo;) has continued to update its guidance to examiners on patent-eligibility under 35 U.S.C. &sect; 101 as the Federal Circuit continues to issue decisions providing examples of patent-eligible subject matter.</div> <div>&nbsp;</div> <div>In December, the PTO issued additional guidance including:</div> <div>&nbsp;</div> <div>&middot;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <a href="https://www.uspto.gov/sites/default/files/documents/ieg-bus-meth-exs-dec2016.pdf" target="_blank"><b>Subject Matter Eligibility Examples: Business Methods</b></a> (December 15, 2016)</div> <div>&middot;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <a href="https://www.uspto.gov/sites/default/files/documents/ieg-qrs-dec2016.pptx" target="_blank"><b>December 2016: Interim Eligibility Guidance Quick Reference Sheet</b></a> (December 15, 2016)</div> <div>&middot;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <a href="https://www.uspto.gov/sites/default/files/documents/ieg-dec-2016-sme_crt_dec.xlsx" target="_blank"><b>Subject Matter Eligibility Court Decisions Through December 15, 2016</b></a></div> <div>&middot;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <a href="https://www.uspto.gov/sites/default/files/documents/ieg-dec-2016-ex_index.pdf" target="_blank"><b>Index of Eligibility Examples</b></a> (December 21, 2016)</div> <div>&nbsp;</div> <div>These new guidance materials provide an additional arsenal for patent holders arguing patent eligibility with examiners before the PTO.</div> <div>&nbsp;</div> <div>We provide a brief summary of each of these materials as follows:</div> <div>&nbsp;</div> <div><b>Examples 34-36</b></div> <div>&nbsp;</div> <div>In the December 15, 2016, &ldquo;Subject Matter Eligibility Examples: Business Methods,&rdquo; the PTO sets forth Examples 34-36 which demonstrate the difference between patent-ineligible and patent-eligible subject matter for three classes of &ldquo;business method&rdquo; patent claims. An updated list of all the examples including the new Examples 34-36 is provided at <a href="https://www.uspto.gov/sites/default/files/documents/ieg-dec-2016-ex_index.pdf" target="_blank">https://www.uspto.gov/sites/default/files/documents/ieg-dec-2016-ex_index.pdf</a>.</div> <div>&nbsp;</div> <div><b>Example 34 </b>is directed to a <b>System for Filtering Internet Content,</b> based on the Federal Circuit&rsquo;s decision in <i>BASCOM Global Internet v. AT&amp;T Mobility, LLC</i>.</div> <div>&nbsp;</div> <div>In this Example, the PTO sets forth an example of a claim which is considered patent eligible under Step 2B of the Alice framework.</div> <div>&nbsp;</div> <div>In particular, the Example indicates that while filtering content is considered an abstract idea of &ldquo;a method of organizing human activity&rdquo; under Step 2A, the claimed &ldquo;combination&rdquo; of known elements were nonetheless &ldquo;unconventional and non-generic&rdquo; so as to constitute &ldquo;something more&rdquo; to make the claim patent eligible. In particular, the analysis of Claim 1 of Example 34 explains in pertinent part:<br />&nbsp;</div> <div style="margin-left: 40px;">Here, an inventive concept can be found in the unconventional and non‐generic <b><i>combination </i></b>of known elements, and more specifically &ldquo;the installation of a filtering tool at a specific location, remote from the end‐users, with customizable filtering features specific to each end user&rdquo; where the filtering tool at the ISP is able to &ldquo;identify individual accounts that communicate with the ISP server, and to associate a request for Internet content with a specific individual account.&rdquo; The Federal Circuit also determined that the claimed arrangement of elements in the system results in an improvement in the technology of filtering content on the Internet, because it offers &ldquo;both the benefits of a filter on the local computer, and the benefits of a filter on the ISP server.&rdquo;</div><div><br />(<i>Id</i>. at 3-4 (emphasis in original)).</div> <div>&nbsp;</div> <div>The Guidance also points out that the specification explained that &ldquo;this combination was not well-understood, routine or conventional activity&rdquo; as additional support for the patent-eligibility conclusion. (<i>Id</i>. at 4). The Guidance also points to the conclusion that &ldquo;the claim recites a &ldquo;technology‐based solution&rdquo; of filtering content on the Internet that overcomes the disadvantages of prior art filtering systems. Thus, when viewed as an ordered combination, the claim limitations amount to significantly more than the abstract idea of content filtering.&rdquo; (<i>Id</i>.).</div> <div>&nbsp;</div> <div>The Guidance recognizes that reasons for allowance could provide &ldquo;that the claim recites the abstract idea of filtering content. However, the claim is eligible because analyzing the claim limitations as an ordered combination demonstrates that the claim is a particular application of and an improvement to the technology of filtering content on the Internet, rather than well‐understood, routine, conventional activity or a simple instruction to apply the abstract idea of filtering content on the Internet or to perform the abstract idea on a generic set of computers.&rdquo; (<i>Id</i>.).</div> <div>&nbsp;</div> <div>The Guidance also contrasts <i>BASCOM&rsquo;s</i> holding to prior Federal Circuit decisions in <i>Intellectual Ventures I</i>, <i>Content Extraction</i>, <i>Ultramercial</i> and <i>Accenture</i>, by drawing the following distinction:</div> <div>Unlike the claims in <i>Intellectual Ventures I</i>, <i>Content Extraction</i>, <i>Ultramercial</i>, and <i>Accenture</i>, claim 1 of <i>BASCOM </i>is not simply directed to the abstract idea of filtering content on the Internet or on generic computer components performing conventional activities. Instead, claim 1 &ldquo;carve[s] out a specific location for the filtering system (a remote ISP server) and require the filtering system to give users the ability to customize filtering for their individual network accounts.&rdquo;</div> <div>(<i>Id</i>. at 5). Thus, the PTO is recommending that examiners to draw similar distinctions to find claims patent-eligible even when they use generic computer components, as long as such components are used in non-conventional ways.</div> <div>&nbsp;</div> <div><b>Example 35</b> sets forth three claims directed to<b> Verifying A Bank Customer&rsquo;s Identity to Permit An ATM Transaction</b>. The example draws a distinction between Claim 1, which is ineligible as being &ldquo;directed to an abstract idea&rdquo; and Claims 2 and 3 which are also directed to the same abstract idea but have additional elements that amount to significantly more than the abstract idea &ldquo;because they implement the abstract idea with specific meaningful limitations.&rdquo; (<i>Id</i>. at 5).</div> <div>&nbsp;</div> <div>All three claims are directed to the same basic subject matter of &ldquo;a method of conducting a secure automated teller transaction with a financial institution by authenticating a customer&rsquo;s identity.&rdquo; Claim 1, which is described as not eligible, merely claims three broad steps of &ldquo;obtaining&rdquo; customer-specific information, &ldquo;comparing&rdquo; that information with other information to &ldquo;verify the customer&rsquo;s identity&rdquo; and &ldquo;determining&rdquo; whether the transaction should go forward.</div> <div>&nbsp;</div> <div>Claims 2 and 3, which are described as eligible, differ from Claim 1 in that both Claims 2 and 3 include detailed steps of &ldquo;how&rdquo; the comparing step is performed, and Claim 3, also provides details of &ldquo;how&rdquo; a &ldquo;control signal&rdquo; is used to provide access or deny access to the ATM based on the specific comparing methodology.</div> <div>&nbsp;</div> <div>In discussing Claim 1, the Guidance states the steps of claim &ldquo;describe a method of fraud prevention by verifying the authenticity of the customer&rsquo;s identity prior to proceeding with a banking transaction, which is a &ldquo;long prevalent&rdquo; business practice that bank tellers have used for many years. Fraud prevention by verifying the identity of the customer is as fundamental to business as the economic concepts that were identified as abstract ideas by the Supreme Court, such as intermediated settlement (<i>Alice Corp.</i>) and risk hedging (<i>Bilski</i>).&rdquo; (<i>Id</i>. at 8).</div> <div>&nbsp;</div> <div>This example seems to recognize that establishing the business practice is &ldquo;long prevalent&rdquo; is part of the required analysis to find a business practice &ldquo;abstract&rdquo; under the <i>Alice</i> and <i>Bilski</i> framework, although this concept is not explicitly discussed.</div> <div>&nbsp;</div> <div>The examples also conclude that Claims 2 and 3 are directed to the same abstract idea, but are nonetheless eligible under Step 2B because they include significantly more than the abstract idea.</div> <div>&nbsp;</div> <div>In particular, with respect to Claim 2, the examples explain why the additional detail in the comparing step is enough something more to make them eligible as follows:</div><div style="margin-left: 40px;">&nbsp;</div> <div style="margin-left: 40px;">However, the <b><i>combination </i></b>of the steps (<i>e.g</i>., the ATM providing a random code, the mobile communication device&rsquo;s generation of the image having encrypted code data in response to the random code, the ATM&rsquo;s decryption and analysis of the code data, and the subsequent determination of whether the transaction should proceed based on the analysis of the code data) operates in a non‐ conventional and non‐generic way to ensure that the customer&rsquo;s identity is verified in a secure manner that is more than the conventional verification process employed by an ATM alone. In combination, these steps do not represent merely gathering data for comparison or security purposes, but instead set up a sequence of events that address unique problems associated with bank cards and ATMs (<i>e.g</i>., the use of stolen or &ldquo;skimmed&rdquo; bank cards and/or customer information to perform unauthorized transactions). Thus, like in <i>BASCOM</i>, the claimed combination of additional elements presents a specific, discrete implementation of the abstract idea. Further, the combination of obtaining information from the mobile communication device (instead of the ATM keypad) and using the image (instead of a PIN) to verify the customer&rsquo;s identity by matching identification information does not merely select information by content or source, in contrast to <i>Electric Power, </i>but instead describes a process that differs from the routine and conventional sequence of events normally conducted by ATM verification, such as entering a PIN, similar to the unconventional sequence of events in <i>DDR</i>. The additional elements in claim 2 thus represent significantly more (<i>i.e., </i>provide an inventive concept) because they are <b>a practical implementation of the abstract idea of fraud prevention that performs identity verification in a non</b><b>‐conventional and non</b><b>‐generic way, even though the steps use well</b><b>‐known components (a processor and mobile communication device). </b>Claim 2 is eligible (<i>Step 2B: Yes</i>).</div> <div><br />(<i>Id</i>. at 10 (emphasis added)).</div> <div>&nbsp;</div> <div>The analysis for Claim 3 is comparable, but relies upon the combination of steps of &ldquo;the ATM&rsquo;s provision of the random code, the mobile communication device&rsquo;s generation of the customer confirmation code in response to the random code, the ATM&rsquo;s analysis of the customer confirmation code, and the ATM&rsquo;s subsequent sending of a control signal to provide or prevent access to the keypad of the ATM and thus allow or prevent a transaction based on the analysis of the code data sets&rdquo; (<i>Id.</i> at 11). Interestingly, the use the &ldquo;control signal&rdquo; as the specific way of &ldquo;determining whether the transaction should proceed&rdquo; was the type of detail sufficient to make the claim eligible.<br />&nbsp;</div> <div><b>Example 36</b> sets forth three claims directed to<b> Tracking Inventory</b>. The example draws a distinction between Claim 1, which is ineligible as being &ldquo;directed to an abstract idea&rdquo; and Claims 2 and 3 which are also directed to the same abstract idea but have additional elements that amount to significantly more than the abstract idea because &ldquo;they recite specific limitations other than what would be well‐understood, routine, conventional activities in the field, which amount to significantly more.&rdquo; (<i>Id</i>. at 12).<br />&nbsp;</div> <div>In these examples, the PTO is distinguishing between Claim 1 which merely includes high-level general steps for tracking inventory, and Claims 2 and 3 which explain &ldquo;how&rdquo; an unconventional machine vision technique is used to track inventory.</div> <div>In the context of Claim 2, the analysis explains:<br />&nbsp;</div> <div style="margin-left: 40px;">However, the memory and processor in combination with a high‐resolution video camera array with predetermined overlapping views that reconstructs the 3‐D coordinates of the item of inventory using overlapping images of the item and prior knowledge of the location and field of view of the camera(s) provides significantly more than the abstract idea of using data collection techniques to manage inventory. As explained in the specification, at the time of this invention<b><i>, using a high</i></b><b><i>‐ resolution video camera array with overlapping views to track items of inventory was not well</i></b><b><i>‐ understood, routine, conventional activity to those in the field of inventory control.</i></b> In fact, the use of this camera array provides the ability to track objects throughout the entire storage space rather than simply the view of a single camera and determine their 3‐D location without any of the manual steps that were required of previous methods. That is, the <b><i>video camera array with reconstruction software provides the technological solution to the technological problem of automatically tracking objects and determining their physical position using a computer vision system</i></b>. Like in <i>DDR</i>, the claimed solution here is necessarily rooted in computer technology to address a problem specifically arising in the realm of computer vision systems. The claimed limitations are not simply an attempt to generally link the abstract idea to the technological environment of computer vision systems. Rather, these are meaningful limitations that confine the claim to a particular useful application. Accordingly, when viewed as a combination, the additional elements thus yield a claim as a whole that amounts to significantly more than the abstract idea of inventory management (<i>Step 2B: Yes</i>). The claim is patent eligible.</div> <div><br />(<i>Id</i>. at 15 (emphasis added)). Thus, the analysis looks to the specific technical solution claimed on &ldquo;how&rdquo; the tracking is accomplished in what is assumed for purposes of the analysis is a non-conventional way at the time of the invention.<br /><br />The analysis offers a comparable analysis for Claim 3 as follows:<br />&nbsp;</div> <div style="margin-left: 40px;">In combination, however, the limitations do amount to significantly more than the abstract idea of inventory management. As explained in the specification, the combination of the camera array&rsquo;s acquisition of high resolution image sequences, and the processor&rsquo;s performance of step (b)&rsquo;s extracting contour and character information from the images to create feature vectors, step (c)&rsquo;s recognizing and tracking items of inventory using the feature vectors and a recognition model, and step (d)&rsquo;s determining the physical location of the recognized items using the position of the item in the image sequence(s<b><i>) is not well</i></b><b><i>‐understood, routine, conventional activity in this field</i></b>. This combination of limitations provides a hardware and software solution that improves upon previous inventory management techniques by avoiding the cumbersome use of RFID and GPS transmitters and the inaccuracy issues that plagued previous computer vision solutions. This combination of features provide meaningful limitations to the practical application of inventory tracking with computer vision<b><i>, by improving the system&rsquo;s ability to identify and track objects across multiple cameras in a three</i></b><b><i>‐dimensional space</i></b>. These limitations do not simply limit the abstract idea to the technological environment of image processing, but are instead meaningful limitations that integrate the abstract idea into a particular application that uses character and contour information from high resolution images to recognize items of inventory. When viewed as a combination, the additional elements thus yield a claim as a whole that amounts to significantly more than the abstract idea of inventory management (<i>Step 2B: Yes</i>). The claim is patent eligible.</div> <div><br />(<i>Id</i>. at 15 (emphasis added)).<br />&nbsp;</div> <div>A general take away from these examples, is that inclusion of a combination of detailed steps explaining &ldquo;how&rdquo; an otherwise generic process is being performed in an unconventional and non-routine way at the time of the invention should be enough something more to make a claim patent eligible, even when the claim is generally directed to business processes, such as ATM transactions and tracking inventory.<br />&nbsp;</div> <div><b>Quick Reference Sheet<br /><br type="_moz" /></b></div> <div>The December Guidance also includes a Quick Reference Sheet to assist examiners (and applicants) with relevant cases that are available to rely upon during prosecution.</div> <div>With respect to Step 2A (whether the claim is directed to an abstract idea), the Quick Reference Sheet includes the following diagram:</div> <div><br /><img src="/images/Alert01017.jpg" width="624" height="392" alt="" /><br /><br />With respect to Step 2B, i.e. whether the claim as a whole amounts to significant more than the recited judicial exception, the Quick Reference Sheet includes the following diagram:<br /><br /><img src="/images/Alert01017(2).jpg" width="624" height="356" alt="" /><br /><br /><div>A more detailed spreadsheet of case law is also provided by the PTO at <a href="https://www.uspto.gov/sites/default/files/documents/ieg-dec-2016-sme_crt_dec.xlsx" target="_blank">https://www.uspto.gov/sites/default/files/documents/ieg-dec-2016-sme_crt_dec.xlsx<br /><br type="_moz" /></a></div> <div>We will continue to monitor developments in patent-eligibility under 35 U.S.C. &sect;&nbsp;101. In the meantime, for more information on patent-eligibility, please contact one of our attorneys.</div> <div>&nbsp;</div> <div>Charles R. Macedo and Benjamin M. &nbsp;Halpern are partners, and Michael Sebba is an associate at Amster, Rothstein and Ebenstein LLP.&nbsp; Their practice specializes in intellectual property issues, including litigating patent, trademark and other intellectual property disputes.&nbsp; They may be reached at&nbsp; <a href="/cdn-cgi/l/email-protection#d7b4bab6b4b2b3b897b6a5b2bbb6a0f9b4b8ba">cmacedo@arelaw.com</a>, <a href="/cdn-cgi/l/email-protection#3a58525b564a5f48547a5b485f565b4d14595557">bhalpern@arelaw.com</a>, and <a href="/cdn-cgi/l/email-protection#b3dec0d6d1d1d2f3d2c1d6dfd2c49dd0dcde">msebba@arelaw.com</a>. &nbsp;&nbsp;</div> <div>&nbsp;</div></div> Tue, 10 Jan 2017 00:00:00 +0000 http://www.arelaw.com/publications/view/alert011017/ ARE Trademark Law Alert <br>Federal Circuit Reverses Trademark Trial and Appeal Board Holding that Providing Software May Constitute Providing a Service<br> http://www.arelaw.com/publications/view/alert121916/ On December 12, 2016, the United States Court of Appeals for the Federal Circuit issued its decision in <i>In re: Jobdiva, Inc.</i>, vacating the decision of the Trademark Trial and Appeal Board (the &ldquo;Board&rdquo;) which cancelled JobDiva&rsquo;s trademark registrations in connection with &ldquo;personnel placement and recruitment services&rdquo; based on abandonment.&nbsp; The Court vacated the Board&rsquo;s decision as having applied the wrong legal standard, but it did not determine whether JobDiva had in fact offered the services listed in its Registrations.&nbsp; Rather, the Court sent the case back to the Board to make that factual determination.&nbsp; Slip op. at 12.<br /><br /> <div>In a cancellation proceeding instituted by JobDiva against Jobvite, Inc., JobDiva asserted ownership of two trademark registrations for the service marks JOBDIVA and JOBDIVA plus design, for personnel placement and recruitment services.&nbsp; Jobvite, Inc. counterclaimed,&nbsp; petitioning the Board to cancel JobDiva&rsquo;s trademark registrations on the basis that JobDiva failed to perform personnel placement and recruitment services.&nbsp; The Board granted Jobvite&rsquo;s counterclaims on the basis of abandonment since, other than supplying its software, there was no evidence of JobDiva&rsquo;s performance of personnel placement and recruitment services resulting in nonuse for three consecutive years.&nbsp; The Board held that &ldquo;[a] term that <i>only </i>identifies a computer program does not become a service mark merely because the program is sold or licensed in commerce.&nbsp; Such a mark does not serve to identify a service unless it is also used to identify and distinguish the service itself, as opposed to the program.&rdquo;&nbsp; The Board found that JobDiva merely offered software for providing personnel placement and recruitment rather than offering personnel placement and recruitment services themselves.&nbsp; Slip op. at. 4-5.</div> <div><br />In reviewing the Board&rsquo;s decision, the Federal Circuit made clear that &ldquo;[e]ven though a service may be performed by a company&rsquo;s software, the company may well be rendering a service.&rdquo;&nbsp; Slip op. at 9.&nbsp; The Court further explained, that &ldquo;[t]o determine whether a mark is used in connection with the services described in the registration, a key consideration is the perception of the user.&nbsp; The question is whether a user would associate the mark with &lsquo;personnel placement and recruitment&rsquo; services performed by JobDiva, even if JobDiva&rsquo;s software performs each of the steps of the service.&rdquo;&nbsp; <i>Id. </i>at 10.&nbsp; The Court made clear that this is a &ldquo;factual determination that must be conducted on a case-by-case basis.&rdquo;&nbsp; <i>Id. </i>at 11.&nbsp; Here, considerations include the nature of the user&rsquo;s interaction with JobDiva when using JobDiva&rsquo;s software and the location of the software host.&nbsp; <i>Id.</i>&nbsp;</div> <div><br />The Court explained that if JobDiva sold its software to a customer who hosted it on its own website, a user&rsquo;s interaction would appear to be with the customer and not JobDiva.&nbsp; Thus, the user would not likely associate the service with the JOBDIVA mark.&nbsp; In contrast, if the software was hosted on JobDiva&rsquo;s website, users would be more likely to perceive &ldquo;direct interation with JobDiva during operation of the software,&rdquo; and thus, associate the service with JobDiva.&nbsp; On the other hand, if a purchaser acquired ownership of JobDiva&rsquo;s software, then the Federal Circuit held it would likely preclude a finding that JobDiva has rendered services, unless JobDiva&rsquo;s activities after the sale create the perception that JobDiva was in fact providing services. &nbsp;Because the question to be determined was a factual one, the Court remanded it to the Board to answer in the first instance.</div> <div><br />The decision of the Federal Circuit is timely as businesses are increasingly offering software as a service rather than as a product. &nbsp;We will continue to monitor the courts for the latest developments on this issue.</div> <div>&nbsp;</div> *Chester Rothstein and Charles R. Macedo are partners and Jessica Capasso is an associate at Amster, Rothstein and Ebenstein LLP.&nbsp; Their practice specializes in intellectual property issues, including litigating trademark, patent, and other intellectual property disputes.&nbsp; They may be reached at <a href="mailto:crothstein@arelaw.com">crothstein@arelaw.com</a>, <a href="mailto:cmacedo@arelaw.com">cmacedo@arelaw.com</a>, and <a href="mailto:jcapasso@arelaw.com">jcapasso@arelaw.com</a> Mon, 19 Dec 2016 00:00:00 +0000 http://www.arelaw.com/publications/view/alert121916/ In The Press: <br>Askeladden LLC Announces Amster Rothstein & Ebenstein LLP Seeks Inter Partes Review Of Encoditech Patent On It's Behalf<br> http://www.arelaw.com/publications/view/inthepress120916/ <div><strong>Askeladden Seeks Inter Partes Review of Encoditech Patent Asserted in More than Thirty Lawsuits&nbsp;</strong></div><div>&nbsp;</div><div><em>Asserts that claimed systems and methods for secure mobile communications were known and obvious<br /><br /></em><a href="http://www.patentqualityinitiative.com/-/media/pqi/files/press%20releases/pqi%20-%20encoditech%20ipr%20release.pdf?la=en" target="_blank">Download PDF of Press Release</a><br /><br /> New York, NY - Askeladden LLC, as part of its Patent Quality Initiative, filed a petition for Inter Partes Review (IPR) with the Patent Trial and Appeal Board (PTAB) yesterday seeking review of U.S. Patent No. 6,321,095 assigned to Encoditech, LLC. Encoditech has asserted infringement of its patent in thirty-three lawsuits against a wide variety of companies including American Express, Best Buy, LinkedIn, and Under Armour.<br /><br /> Encoditech&rsquo;s patent claims methods and systems for establishing direct and secure communications between mobile devices. Askeladden&rsquo;s IPR petition asserts that the patent&rsquo;s claims were known and obvious at the time the application for the patent was filed and therefore should be found unpatentable by the PTAB.&nbsp;<br /><br /> Askeladden highlights the fact that the issued version of claim 7 of Encoditech&rsquo;s patent was rejected by the Patent Office during examination, and an amendment made to overcome the rejection was inadvertently omitted from the patent when it issued. &nbsp;Encoditech has not tried to correct this error, but rather has asserted infringement of claim 7 in litigation.<br /><br />&ldquo;Our goal is to promote and protect innovation in the financial services sector and other industries,&rdquo; said Sean Reilly, General Counsel of Askeladden. &ldquo;Litigation based on invalid patents that should not have been issued needlessly diverts valuable resources away from research and product development.&rdquo;<br /><br />Askeladden&rsquo;s <a href="http://www.patentqualityinitiative.com/about%20pqi/patent%20challenge%20committee" target="_blank">Patent Challenge Committee</a>&mdash;which is comprised of individuals regarded as thought leaders with respect to the patent system&mdash;decided to challenge this patent through the IPR process as part of Askeladden&rsquo;s Patent Quality Initiative.<br /><br /> Askeladden is represented by Amster, Rothstein &amp; Ebenstein LLP.<br /><br /><strong>About Patent Quality Initiative</strong><br /> Askeladden is an education, information and advocacy organization with the goal of improving the understanding, use and reliability of patents in financial services and other industries. As part of its Patent Quality Initiative, Askeladden strives to promote better patents and patent holder behaviors by regularly filing amicus briefs, Inter Partes Reviews (IPRs) and engaging in educational activities.</div> Fri, 09 Dec 2016 00:00:00 +0000 http://www.arelaw.com/publications/view/inthepress120916/ Patent Law Alert: <br> Supreme Court Clarifies Lost Profit Remedy for Design Patent Infringement in <i>Samsung Electronics Co., Ltd. v. Apple, Inc.</i> <br> http://www.arelaw.com/publications/view/alert120616/ <div>On December 6, 2016, the United States Supreme Court issued its decision in <i>Samsung Electronics Co., Ltd. v. Apple Inc.</i>, unanimously reversing the United States Court of Appeals for the Federal Circuit&rsquo;s decision which affirmed the award to Apple of $399 million in damages for Samsung&rsquo;s design patent infringement -- the entire profit Samsung made from its sales of infringing smartphones.&nbsp; The Court reversed the decision of the Federal Circuit as inconsistent with Section 289 of the Patent Act and remanded the case for further proceedings consistent with the opinion of the Court.&nbsp; Slip op. at 8-9.&nbsp;</div> <div>Pursuant to Section 289 of the Patent Act, damages specific to design patent infringement are as follows:</div> <div>&nbsp;</div> <div style="margin-left: 40px;">Whoever during the term of a patent for a design, without license of the owner, (1) applies the patented design, or any colorable imitation thereof, to any article of manufacture for the purpose of sale, or (2) sells or exposes for sale any article of manufacture to which such design or colorable imitation has been applied shall be liable to the owner to the extent of his total profit, but not less than $250, recoverable in any United States district court having jurisdiction of the parties.</div> <div style="margin-left: 40px;">&nbsp;</div> <div style="margin-left: 40px;">Nothing in this section shall prevent, lessen, or impeach any other remedy which an owner of an infringed patent has under the provisions of this title, but he shall not twice recover the profit made from the infringement.</div> <div style="margin-left: 40px;">&nbsp;</div> <div>35 U.S.C. &sect;&nbsp;289.<br />&nbsp;</div> <div>The issue as decided by the Court was whether, in the case of a multi-component product, the term &ldquo;&lsquo;article of manufacture&rsquo; must always be the end product sold to the consumer or whether it can also be a component of that product.&rdquo; &nbsp;Slip op. at 5.&nbsp; Here, the distinction was between the smartphone in its entirety or the portion of the smartphone that was the subject of the patented design (e.g., the front face).<br />&nbsp;</div> <div>Relying upon the text of the statute and the ordinary meaning of the terms, the Court found that &ldquo;the term &lsquo;article of manufacture&rsquo; is broad enough to encompass both a product sold to a consumer as well as a component of that product.&nbsp; That a component may be integrated into a larger product, in other words, does not put it outside the category of articles of manufacture.&rdquo;&nbsp; Slip op. at 6.&nbsp; The Court noted that this reading is consistent with 35 U.S.C. &sect;&nbsp;171(a) which allows for design patent protection for only a component of a multicomponent part, as well as 35 U.S.C. &sect;&nbsp;101 which permits patent protection for &ldquo;any new and useful . . . manufacture,&rdquo; including parts of a machine separate from the machine itself.&nbsp; <i>Id. </i>at 7.</div> <div><br />The Court thus set forth a new &ldquo;two step&rdquo; test for &ldquo;[a]rriving at a damages award under &sect; 289&rdquo;:</div> <div>&nbsp;</div><div style="margin-left: 40px;"><br />1. &nbsp; &nbsp; &nbsp; &ldquo;identify the &lsquo;article of manufacture&rsquo; to which the infringed design has been applied.&rdquo;; and</div> <div style="margin-left: 40px;"><br />2. &nbsp; &nbsp; &nbsp; &ldquo;calculate the infringer&rsquo;s total profit made on that article of manufacture.&rdquo;</div> <div><i><br />Id.</i> at 5.</div> <div><br />With respect to the first step, the Court declined to set forth a test for identifying the relevant article of manufacture.&nbsp; <i>Id.</i> at 58.</div> <div><br />While not necessary to the resolution of the case, we note that the Court did reaffirm its prior infringement test from <i>Gorham Co. v. White</i>, 14 Wall. 511 (1872), stating that &ldquo;[t]his Court has explained that a design patent is infringed &lsquo;if, in the eye of an ordinary observer, giving such attention as a purchaser usually gives, two designs are substantially the same.&rsquo;&rdquo;&nbsp; Slip op. at 2 (quoting <i>Gorham Co. v. White</i>, 14 Wall. 511, 528 (1872)).&nbsp;</div> <div><br />We will continue to monitor the Courts for the latest developments on this issue.</div> <div>&nbsp;</div> *Charles R. Macedo is a partner and Jessica Capasso and Michael Sebba are associates at Amster, Rothstein and Ebenstein LLP.&nbsp; Their practice specializes in intellectual property issues, including litigating patent, trademark and other intellectual property disputes.&nbsp; They may be reached at <a href="/cdn-cgi/l/email-protection#82e1efe3e1e7e6edc2e3f0e7eee3f5ace1edef">cmacedo@arelaw.com</a>, <a href="/cdn-cgi/l/email-protection#dbb1b8baabbaa8a8b49bbaa9beb7baacf5b8b4b6">jcapasso@arelaw.com</a> and <a href="/cdn-cgi/l/email-protection#e5889680878784a5849780898492cb868a88">msebba@arelaw.com</a> Tue, 06 Dec 2016 00:00:00 +0000 http://www.arelaw.com/publications/view/alert120616/ ARE Patent Law Alert:<br>In <i>Unwired Planet v. Google</i>, the Federal Circuit Rejected the PTAB’s Expansive View of “Covered Business Method” Patent<br> http://www.arelaw.com/publications/view/alert112916/ <div>A &ldquo;covered business method&rdquo; (CBM) patent review is one of several post-grant trial proceedings established under the America Invents Act (AIA) that is conducted at the Patent Trial and Appeal Board (PTAB) of the U.S. Patent and Trademark Office (PTO).&nbsp; A patent is qualified for CBM patent review only if it is a &ldquo;covered business method patent.&rdquo;&nbsp; The AIA defines a CBM patent as:<br />&nbsp;</div> <div style="margin-left: 40px;">a patent that claims a method or corresponding apparatus for performing data processing or other operations used in the practice, administration, or management of a financial product or service, except that the term does not include patents for technological inventions.&nbsp;<br />&nbsp;</div> <div>AIA &sect; 18(d)(1).&nbsp; The PTO subsequently adopted this statutory definition of a CBM patent by regulation without any alteration.&nbsp; <i>See</i> 37 C.F.R. &sect; 42.301(a).&nbsp; In many cases, however, the PTAB has been applying a much broader definition of a CBM patent.&nbsp; In <i>Unwired Planet v. Google</i>, the Federal Circuit rejected the PTAB&rsquo;s expansive view of a CBM patent as exceeding the statutory authority.<br /><br /> In <i>Unwired Planet, LLC v. Google</i>, CBM2014-00006, the PTAB applied the following standard to determine whether the challenged patent is a CBM patent:<br />&nbsp;</div> <div style="margin-left: 40px;">whether the patent claims activities that are financial in nature, <b><i>incidental to a financial activity</i></b>, or<b><i> complementary to a financial activity</i></b>.&nbsp;<br />&nbsp;</div> <div>CBM2014-00006, Paper 11, slip op. at 11 (PTAB Apr. 8, 2014) (emphasis added).&nbsp; The challenged patent in the CBM proceeding is directed to a system and method for restricting access by a &ldquo;client application&rdquo; to a wireless device&rsquo;s location information.&nbsp; The PTAB reasoned that since the specification of the challenged patent indicates that the &ldquo;client application&rdquo; may be associated with a service or goods provider, such as a hotel, restaurant, or store, the subject matter recited in the challenged claim is &ldquo;incidental or complementary to the financial activity or product sales.&rdquo;&nbsp; <i>Id</i>.&nbsp; As such, the PTAB determined that the challenged patent was a CBM patent and instituted a CBM patent review.&nbsp; The PTAB ultimately issued a final written decision invalidating the challenged claims under section 101.&nbsp; The patent owner appealed from, among others, the PTAB&rsquo;s determination that the challenged patent was a CBM patent, which the Federal Circuit has jurisdiction to review.&nbsp; <i>See Versata Dev. Grp., Inc. v. SAP Am., Inc</i>., 793 F.3d 1306, 1323 (Fed. Cir. 2015).<br />&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</div> <div>In <i>Unwired Planet, LLC v. Google Inc.</i>, Case No. 2015-1812 (Fed. Cir. Nov. 21, 2016), the Federal Circuit rejected the PTAB&rsquo;s determination and held that &ldquo;the Board&rsquo;s reliance on whether the patent claims activities &lsquo;incidental to&rsquo; or complementary to&rsquo; a financial activity as the legal standard to determine whether a patent is a CBM patent was not in accordance with the law.&rdquo;&nbsp; Slip op. at 13.&nbsp;<br />&nbsp;</div> <div>As the Federal Circuit noted, the &ldquo;incidental&rdquo; or &ldquo;complementary&rdquo; language in the PTAB&rsquo;s own definition does not appear in the statute.&nbsp; Rather, this language came from &ldquo;a single floor comment&rdquo; by Senator Schumer during the Senate debate over the AIA that the PTO quoted as an example of the legislative history.&nbsp; Since the PTO did not adopt this general policy statement through rule making procedures, the Federal Circuit held that the PTO cannot apply or rely upon it as law.&nbsp; <i>See id</i>. at 8-10.&nbsp;<br />&nbsp;</div> <div>In all events, the Federal Circuit held that &ldquo;[t]he authoritative statement of the Board&rsquo;s authority to conduct a CBM review is the text of the statute,&rdquo; and &ldquo;[t]he Board&rsquo;s application of the &lsquo;incidental to&rsquo; and &lsquo;complementary to&rsquo; language from the PTO policy statement instead of the statutory definition renders superfluous the limits Congress placed on the definition of a CBM patent.&rdquo;&nbsp; <i>Id</i>. at 11-12.&nbsp;<br />&nbsp;</div> <div>In rejecting the PTAB&rsquo;s expansive view of a CBM patent, the Federal Circuit provided a clear guidance that &ldquo;CBM patents are limited to those <b><i>with claims that are directed to methods and apparatuses of particular types and with particular uses &lsquo;in the practice, administration, or management of a financial product or service&rsquo;</i></b>&rdquo; in accordance with the statutory definition.&nbsp; <i>Id</i>. at 12 (emphasis added).&nbsp; In this connection, the Federal Circuit provided some illustrative examples of patents that cannot automatically become CBM patents:<br />&nbsp;</div> <div style="margin-left: 40px;">The patent for a novel lightbulb that is found to work particularly well in bank vaults does not become a CBM patent because of its incidental or complementary use in banks. Likewise, it cannot be the case that a patent covering a method and corresponding apparatuses becomes a CBM patent because its practice could involve a potential sale of a good or service. All patents, at some level, relate to potential sale of a good or service.<br />&nbsp;</div> <div><i>Id</i>.<br />&nbsp;</div> <div>The Federal Circuit vacated the PTAB&rsquo;s final written decision from the CBM proceeding and remanded the case to the PTAB to determine whether the challenged patent is a CBM patent in accordance with the Federal Circuit&rsquo;s opinion.&nbsp; <i>Id</i>. at 13.&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</div> <div>We will continue to monitor developments in CBM eligibility under the AIA. &nbsp;In the meantime, for more information on CBM patent review and other post-grant trial proceedings, please contact one of our attorneys.</div> <div>&nbsp;</div> <div>*<a href="http://www.arelaw.com/professional/cmacedo/">Charles R. Macedo</a> is a partner and <a href="http://www.arelaw.com/professional/jcapasso/">Jung</a> S. Hahm is senior counsel at <a href="http://www.arelaw.com/">Amster, Rothstein &amp; Ebenstein LLP</a>.&nbsp; Their practice specializes in intellectual property issues, including litigating patent, trademark and other intellectual property disputes.&nbsp; They may be reached at <a href="/cdn-cgi/l/email-protection#87e4eae6e4e2e3e8c7e6f5e2ebe6f0a9e4e8ea">cmacedo@arelaw.com</a> and <a href="/cdn-cgi/l/email-protection#b6dcded7dedbf6d7c4d3dad7c198d5d9db">jhahm@arelaw.com</a>.&nbsp;</div> Tue, 29 Nov 2016 00:00:00 +0000 http://www.arelaw.com/publications/view/alert112916/