Amster Rothstein & Ebenstein, LLP - Intellectual Property Law

Law360 Reports on Petition for Rehearing/Rehearing En Banc Filed by Amster, Rothstein & Ebenstein LLP in Island IP v. TD Ameritrade

Thu, 20 Jun 2024 00:00:00 +0000

Law 360 reported on Combined Petition for Rehearing and Rehearing En Banc filed by Partner Charles R. Macedo from Amster, Rothstein & Ebenstein LLP and John Dellaportas from Emmet Marvin & Martin LLP on behalf of Island Intellectual Property LLC at the Federal Circuit. The Petition addresses important issues of when the Court needs to provide a reasoned decision on a motion for summary judgment and appellate review.

Law360 cites Mr. Macedo as follows:

"There was a mountain of evidence and a clear explanation in the briefs," Island lawyer Charles Macedo of Amster Rothstein & Ebenstein LLP told Law360 Thursday.

"You don't need to agree with us, it doesn't mean that the factfinder in the end would agree, but at a minimum you have to address it. Unfortunately, neither the district court nor the panel addressed [Alice's] 'Step 2,' let alone the evidence," said Macedo.

Corrected Combined Petition for Panel Rehearing and Rehearing En Banc for Plaintiff-Appellant in Island Intellectual Property LLC v. TD Ameritrade, Inc., et al.

Tue, 18 Jun 2024 00:00:00 +0000

Click to download PDF: Corrected Combined Petition for Panel Rehearing and Rehearing En Banc for Plaintiff-Appellant

Charley Macedo, Darren Haber and David Goldberg Co-Author Article For IP Watchdog on Island Petition Highlights Patent Decisions Increasingly Deviate from Civil Procedure Norms

Fri, 21 Jun 2024 00:00:00 +0000

IP Watchdog featured an article by partners Charley Macedo and Darren Haber, and Senior Counsel David Goldberg on “Island Petition Highlights Patent Decisions Increasingly Deviate from Civil Procedure Norms”. The article was also co-written by John Dellaportas.

“On June 17th, 2024, Island Intellectual Property LLC (“Island”) filed a Combined Petition for Rehearing and Rehearing En Banc in Island Intellectual Property LLC v. TD Ameritrade, Inc., Nos. 2023-1318, -1441 (link here). This case involves the failure of the District Court to provide a reasoned decision in granting summary judgment of patent ineligibility in an infringement case.”

Read the full article HERE.

ARE Trademark Law Alert: Supreme Court Confirms Constitutionality of Lanham Act Prohibition on Registration of Trademarks That Comprise the Names Living People Without Their Consent in Vidal v. Elster

Mon, 17 Jun 2024 00:00:00 +0000

On June 13, 2024, in Vidal v. Elster, No. 22-704, the United States Supreme Court unanimously upheld the constitutionality of a provision of the Lanham Act prohibiting the US Patent & Trademark Office (“USPTO”) from registering trademarks that name living people without their consent.

Background

The case grew out of the USPTO’s refusal to grant Steven Elster a federal trademark registration for the trademark TRUMP TOO SMALL for clothing under 15 U.S.C. § 1052(c) (the “Names Clause”). Elster challenged the refusal, arguing that the prohibition violated his free speech rights by treating speech about Donald Trump different from other speech. The US Court of Appeals for the Federal Circuit agreed. In re Elster, 26 F.4th 1328 (Fed. Cir. 2022). In a two-step analysis, the Federal Circuit found, first, that the Names Clause was a viewpoint-neutral, content-based restriction on speech subject to at least intermediate scru¬tiny. Id. at 1331, 1333-34. In a second step, the Federal Circuit concluded that the Government could not satisfy intermediate scru¬tiny because the Names Clause does not advance any sub¬stantial governmental interest. Id. at 1339.

Majority Opinion

This argument was rejected by the Supreme Court, although the Justices’ reasons for rejecting the argument differed.

After laying out the facts of the dispute in Part I, the majority opinion written by Justice Thomas noted in Part II(A) that the recent Supreme Court decisions in Matal v. Tam, 582 U.S. 218 (2017), and Iancu v. Brunetti, 588 U.S. 388 (2019), clarify that trademark restrictions that discriminate on viewpoint violate the First Amendment. That said, the “names clause does not facially discriminate against any viewpoint” even though it is clearly “content based.” Vidal v. Elster, No. 22-704, slip op. at 5-6 (U.S. June 13, 2024).

The majority opinion then turned in Part II(B) to the issue of whether these facts call for heightened scrutiny, and concluded they did not. History “demonstrates that restrictions on trademarks have always turned on a mark’s content. But, despite its content-based nature, trademark law has existed alongside the First Amendment from the beginning. That longstanding, harmonious relationship suggests that heightened scrutiny need not always apply in this unique context.” Id. at 10-11.

In Part II(C), the majority opinion reviewed the particular history of restrictions on the trademarking of names, noting that such restrictions served purposes such as protecting a people’s ability to trademark their own names, id. at 12-14, and protecting people from having third parties piggyback off the goodwill they have built in their names, id. at 14-18. With this in mind, the Court found that the history and tradition of restricting trademarks containing names is sufficient to conclude that the Names Clause is compatible with the First Amendment. Id. at 12-19.

In Part III of the majority opinion, which was only joined by Justices Alito and Gorsuch, Justice Thomas defended the historical methodology used in the majority opinion against the analytical methodologies proposed for adoption by Justices Barrett and Sotomayor in their concurring opinions, as discussed below. “But, no matter the approach taken, we all agree that the names clause does not violate the First Amendment.” Id. at 20.

Kavanaugh Concurrence

Justice Kavanaugh, in a concurring-in-part opinion joining all but Part III of the majority opinion, joined by Chief Justice Roberts, noted that not all such viewpoint-neutral, content-based trademark restrictions need a long historical heritage to be constitutional.

Barrett Concurrence

Justice Barrett, joined by Justice Kagan, and joined in part by Justices Sotomayor, and Jackson, wrote a concurrence-in-part joining Parts I through II(B) of the majority opinion, but taking issue with Parts II(C) and III of the majority opinion by arguing that history and tradition should not be, and is not, sufficient to settle the constitutionality issue.

Instead, the issue should be addressed by determining whether the law is rationally related to a legitimate government purpose, which is the test set forth for analogous free speech cases in Rosenberger v. Rectors and Visitors of Univ. of Va., 515 U.S. 819, 829 (1995). That said, under such an analysis, she argued, the Names Clause “passes muster.” After all, “[t]he Government can reasonably determine that, on the whole, protecting marks that include another living person’s name without consent risks undermining the goals of trademark. The names clause is therefore constitutional, both facially and as applied to Elster’s mark.” Vidal v. Elster, No. 22-704, concurring op. at 9 (U.S. June 13, 2024) (Barrett, J., concurring).

Sotomayor Concurrence

Justice Sotomayor, joined by Justices Kagan and Jackson, wrote a concurring opinion to set forth a proposed framework for deciding free speech challenges to provisions of the Lanham Act, namely:

The analysis should proceed in two steps. First ask whether the challenged provision targets particular views taken by speakers on a given subject. If the trademark registration bar is viewpoint based, it is presumptively unconstitutional and heightened scrutiny applies; if it is viewpoint neutral, however, the trademark registration bar need only be reasonable in light of the purpose of the trademark system. Specifically, the trademark registration bar must reasonably serve its purpose of identifying and distinguishing goods for the public. If the challenged provision is both viewpoint neutral and reasonable, then it does not violate the Free Speech Clause.

Vidal v. Elster, No. 22-704, concurring op. at 5-6 (U.S. June 13, 2024) (Sotomayor, J., concurring). In an analysis similar to Justice Barrett’s, Justice Sotomayor concluded that the Names Clause is not an unconstitutional infringement of Elster’s free speech rights, writing, “on the conclusion that the names clause is constitutional, we all agree. Our disagreement boils down primarily to methodology.” Id. at 3.

Conclusion

This case represents the third case in recent years to consider whether specific restrictions in the Lanham Act prohibiting the federal registration of some types of trademarks violate First Amendment free speech rights. The first two cases struck down the two most obvious viewpoint-discriminatory, content-based trademark restrictions, namely those against disparaging matter in Matal v. Tam, 582 U.S. 218 (2017), and against immoral or scandalous matter in Iancu v. Brunetti, 588 U.S. 388 (2019).

The current Elster case tested whether such free speech challenges could also be used to strike down content-based Lanham Act prohibitions that are not viewpoint-discriminatory, and the answer seems to be no. Although the Court did take care to note that its decision in this case “is narrow,” our understanding is that this is most likely due to the methodological differences between the Justices’ analyses and is not an invitation to challenge other viewpoint-neutral, content-based trademark restrictions that may unconstitutionally violate the First Amendment.

In the end, while the result with respect to Elster’s mark was clear, the Justices’ dispute over how to get to that result leaves much confusion on how to determine the constitutionality of other clauses of the Lanham Act and other laws in general.

***

We will continue to monitor developments and provide further updates regarding this case. In the meantime, please feel free to contact us if you have questions regarding issues raised by this case.

*Charles R. Macedo is partner and David P. Goldberg is senior counsel at Amster, Rothstein & Ebenstein LLP. They may be reached at [email protected]">[email protected] and [email protected]">[email protected].

IAM Data & Analytics Reports Amster, Rothstein & Ebenstein partners as being among the IAM Patent 1000

Wed, 05 Jun 2024 00:00:00 +0000

Amster, Rothstein & Ebenstein LLP, and its partners Charley Macedo, Douglas Miro and Gary Gershik are recommended by IAM Data & Analytics as being among the IAM Patent 1000. As IAM reports:

"In the words of one client: “Every single team member at Amster Rothstein & Ebenstein, and especially Charles Macedo, has been exceptionally sharp, professional and efficient.”

Read more on the IAM Patent 1000 and our firm here. (subscription required)

Law360 and Patently-O Reports on NYIPLA Amicus Brief: Advocating for Patent Term Adjustments In re Cellect, LLC

Thu, 30 May 2024 00:00:00 +0000

Amster Rothstein & Ebenstein is pleased that Law360 and Patently-O have reported on the amicus brief filed on behalf of NYIPLA with the U.S. Supreme Court on Obviousness Double Patenting in In re Cellect, LLC. Partners, Charley Macedo and Gary Gershik and Senior Counsel, David Goldberg appeared on the brief along with other members of the Association.

A copy of the brief is available here.

The Patently-O article is available here. (subscription may be required).

Read the Law360 article here. (subscription required)

Amicus Brief of New York Intellectual Property Law Association in Cellect, LLC v. Vidal in Support of Petition for Certiorari

Tue, 28 May 2024 00:00:00 +0000

Click to download PDF: Brief of New York Intellectual Property Law Association in Cellect, LLC v. Vidal

WTR Turns to Partner Max Vern on How To Mitigate Risks Of Trademark Scams

Tue, 28 May 2024 00:00:00 +0000

WTR in its May 28, 2024 article “How to protect your clients from new scams targeting US trademark applicants” (https://www.worldtrademarkreview.com/article/how-protect-your-clients-new-scams-targeting-us-trademark-applicants) turns to Max Vern, Partner, Amster, Rothstein & Ebenstein LLP for his insights on how to mitigate risk from the proliferation of scams targeting trademark applicants in the United States:

One unfortunate side effect of the growing importance of trademarks is the significant increase in scams and fraud committed by “unscrupulous actors that try to cash in on trademark owners’ rights”, says Max Vern of Amster Rothstein & Ebenstein. “The key is strategy and diligence, regardless of whether we are dealing with spoofers trying to lure trademark owners to ‘file’ or ‘renew’ brands through them, more sinister hijackers trying to fraudulently get marks assigned to them to get a foothold in the marketplace or outright copycats flooding the market with counterfeits.”

For more information about trademark law and how to mitigate risk of scams, please contact one of our trademark attorneys.

Amster, Rothstein & Ebenstein's Richard Mandaro Interviewed by Nate Crespo in "Lawyers in the Making" Podcast

Tue, 21 May 2024 00:00:00 +0000

Richard Mandaro, Partner at Amster, Rothstein & Ebenstein, recently interviewed by Nate Crespo, Creator & Host of the Lawyers in the Making Podcast.

Listen to the Podcast HERE.

ARE Design Patent Alert: En Banc Decision in LXQ Corp. v. GM Global Tech. Brings The Law of Obviousness for Design Patent in Accord with KSR

Wed, 22 May 2024 00:00:00 +0000

On May 21, 2024, the full court of U.S. Court of Appeals for the Federal Circuit in LKQ Corp. v. GM Global Tech., 21-2348 (Fed. Cir. 2023) revitalized the law of obviousness for design patents by overruling four decades of precedent based on a rigid and inflexible Rosen-Durling test, to bring the law of obviousness in design patents in accord with the general law of obviousness for utility patents as set forth in Graham v. Deere Co., 383 U.S. 1, 86 S. Ct. 684 (1966).

Factual and Procedural Background

Prior to LKQ, the long-standing framework for determining obvious for a design patent was developed in the 1980s out of a CCPA decision in In re Rosen, 673 F.2d 388 (CCPA 1982). Rosen held that there must be an earlier design that has the same visual impression as the patented design as a prerequisite for finding a patented design obvious. In 1996, the Federal Circuit in Durling v. Spectrum Furniture Co., built on the Rosen test to further require the court to looked at whether it would have been obvious for a designer to modify the earlier reference to create the patented design in question. 101 F.3d 100 (Fed. Cir. 1996). This two-part test has been commonly referred to as the Rosen-Durling test.

Question Presented

The issue raised in this case, is whether the Rosen-Durling test is at odds with the Supreme Court’s 2007 in KSR v. Teleflex decision, and should be modified or eliminated. While the question divided the panel, the most significant issue is what the replacement test should be. Not surprisingly, General Motors opposed the review, stating not only that LKQ failed to raise the KSR issue with the PTAB, but also, they were seeking a complete ‘rewrite of design patent obviousness framework that has otherwise remained unchallenged for decades.’

NYIPLA Amicus Brief

The issue of obviousness in design patents does not often get to be heard by the Federal Circuit, let alone the full court, and a significant number of amicus briefs were submitted to help guide the Court. Some of the authors, along with others from the New York Intellectual Property Law Association (“NYIPLA”), submitted an amicus brief in this case urging the Federal Circuit to adopt a more flexible approach for determining obviousness of design patents in lieu of the Rosen-Durling test. The brief argued for an approach similar to the one outlined in KSR Int’l Co. v. Teleflex Inc., 550 U.S. 398 (2007), reasoning that patent law statutes require that the same conditions for patentability for utility patents apply to design patents.

In KSR,the Supreme Court rejected the restrictive approach to the obviousness analysis for utility patents and, instead, offered a variety of rationales for finding obviousness. In response to KSR, the Federal Circuit adopted a more flexible test. The brief likened the rigidness of the pre-KSR analysis to the Rosen-Durling test and respectfully urged the Federal Circuit to follow suit by applying the same types of flexible rationales to design patents.

Majority Opinion (Authored by Judge Stoll)

In an opinion filed by Circuit Judge Stoll, in which Chief Judge Moore and Circuit Judges Dyk, Prost, Reyna, Taranto, Chen, Hughes, and Stark joined, the Federal Circuit overruled the Rosen-Durling test and opted for a more flexible approach, as suggested by the NYIPLA brief.

Guided by § 103, and the Supreme Court’s and Federal Circuit Court’s precedent, the Court adopted the Graham four-part obviousness test for utility patents to also apply to design patents:

(1) considering the scope and content of the prior art with knowledge of an ordinary designer in the field of design,

(2) determining the differences between the prior art designs and the design claim at issue,

(3) considering the level of ordinary skill in the pertinent art, and

(4) assessing secondary considerations of non-obviousness.

Graham v. John Deere Co., 383 U.S. 1, 17-18 (1965). Subsequently, the Court vacated and remanded the case for the Board to apply its new framework.

Concurrence (Authored by Judge Lourie)

The concurrence by Circuit Judge Lourie agreed with the Court’s decision to vacate and remand but disagreed with the Court’s decision to overrule the Rosen-Durling test, arguing that the original test should have been tweaked rather than overruled.

***

We will continue to monitor developments and provide further updates regarding this case. In the meantime, please feel free to contact us if you have questions regarding issues raised by this case.

* Charles R. Macedo and Douglas A. Miro are partners, David Goldberg is a senior associate and Jamie Zipper is a law clerk at Amster, Rothstein & Ebenstein LLP. They may be reached at [email protected]">[email protected], [email protected]">[email protected], [email protected]">[email protected] and [email protected]">[email protected].

ARE Copyright Law Alert: Supreme Court Issues Ruling on Recovery of Damages Beyond the Copyright Act’s Three-Year Statute of Limitations

Thu, 23 May 2024 00:00:00 +0000

On May 9, 2024, the U.S. Supreme Court issued its ruling in Warner Chappell Music, Inc. v. Sherman Nealy, No. 22-1078, 601 U. S. ____ (2024), addressing whether, under the discovery rule of accrual, a copyright owner claiming infringement “‘can recover damages for acts that allegedly occurred more than three years before the filing of a lawsuit.’” Warner, majority slip op., at 2.(citing Nealy v. Warner Chappell Music, Inc., 60 F.4th 1325, 1334 (11th Cir. 2023)). The Court held that in circuits applying the discovery rule, a copyright owner can obtain damages for an infringement of more than three years so long as the claim was timely.

Factual and Procedural Background

In 1983, Respondent Sherman Nealy and Tony Butler formed Music Specialist, Inc., a company that released recordings of various musical compositions. After Music Specialist dissolved three years later, Nealy was incarcerated from 1989 to 2008 and then again from 2012 to 2015 for cocaine distribution. While incarcerated, Nealy did not approve of any deals involving the use of Music Specialist’s catalog of compositions. However, Butler, on his own, agreed to license works to Petitioner, Warner Chappell Music, Inc. In fact, Warner Chappell used one work, “Jam the Box,” famously in Flo Rida’s hit song “In the Ayer.”

In 2018, following his release from prison, Nealy sued Warner Chappell Music for copyright infringement alleging he held the copyrights to Music Specialist’s songs. Neally alleged the infringement began more than ten years before the date Nealy filed the suit, but Nealy argued that his claims were timely because he sued within three years of discovering the infringement. Chappell accepted that Nealy timely filed his suit within three years of discovery but argued that Nealy could only recover damages or profits that accrued within the past three years, pointing to the Copyright Act’s three-year statute of limitations. See 17 U. S. C. §507(b). The District Court agreed with Chappel’s interpretation barring Nealy’s claim. However, on interlocutory appeal, the Eleventh Circuit reversed, finding that when claims are timely filed there is no three-year damages bar under the Copyright Act.

The Supreme Court granted certiorari and affirmed the Eleventh’s Circuit’s decision in an opinion written by Justice Kagan and joined by Chief Justice Roberts, and Justices Sotomayor, Kavanaugh, Barret and Jackson. Justice Gorsuch filed a dissenting Opinion, joined by Justice Thomas and Justice Alito.

Majority Opinion by Justice Kagan

Certiorari was originally granted to address the question, “[w]hether, under the discovery accrual rule applied by the circuit courts,” a copyright plaintiff “can recover damages for acts that allegedly occurred more than three years before the filing of a lawsuit.” Slip op. at 4. That question, as the Court noted, assumes a copyright claim accrues when a plaintiff discovers or should have discovered an infringement, rather than when infringement happened. But as the Majority noted, that issue has never been decided, and since Warner Chappel never challenged the Eleventh Circuit’s use of the discovery rule below it is not properly raised in this appeal. Thus, the Court assumed, without deciding, that the discovery rule applied, and thus confined its review to whether circuits applying the discovery rule should “superimpose a three-year limit on damages.” Warner, majority slip op., at 4.(citing Petrella, 572 U. S., at 670, n. 4). The Court ultimately ruled that a three-year limit on damages should not be superimposed, reasoning that “[t]he ‘time-to-sue prescription’ [found in the Copyright Act] establishes no separate three-year period for recovering damages . . . .” Warner, majority slip op., at 5.(citing Petrella, 572 U. S. at 686). Thus, the Court held that when a copyright owner timely sues in a circuit court that applies the discovery rule, the owner can recover for damages occurring more than three years prior. However, the Court left up in the air whether the discovery rule itself should be applied in copyright infringement cases.

Justice Gorsuch’s Dissent

In the dissenting opinion, Justice Gorsuch disagreed with the majority’s decision to “sidestep[] the logically antecedent question whether the [Copyright Act] has room for . . . a [discovery] rule.” Warner, dissent slip op., at 1. In fact, Justice Gorsuch went as far as to say, “the Act almost certainly does not tolerate a discovery rule” finding that the Court in the past has “said . . . that the rule is not ‘applicable across all contexts.’” Id. (citing TRW Inc. v. Andrews, 534 U. S. 19, 27 (2001)). Furthermore, Justice Gorsuch stated that the discovery rule should only be applied “in cases of fraud or concealment,” and, thus, “has no role to play here—or, indeed, in the mine run of copyright cases.” Warner, dissent slip op., at 2. The dissent ended by heavily criticizing the majority opinion, stating that it “would have dismissed [the case] as improvidently granted and awaited another squarely presenting the question whether the Copyright Act authorizes the discovery rule.” Id., dissent slip op., at 3. Gorsuch reasoned that it is “[b]etter . . . to answer a question that does matter than one that almost certainly does not” considering that if the Court were to answer whether the discovery accrual rule applies in the future, it could make anything said in the majority opinion “about the rule’s operational details a dead letter.” Id., dissent slip op., at 1, 3.

We will continue to monitor developments and provide further updates regarding this case, and the law with respect to the discovery rule’s application in Copyright cases. In the meantime, please feel free to contact us if you have questions regarding issues raised by this case.

* Douglas A. Miro is a partner, David P. Goldberg is an associate, and Jamie Zipper is a law clerk at Amster, Rothstein & Ebenstein LLP. Their practices specialize in all aspects of intellectual property, including trademark law. They can be reached at [email protected]">[email protected], [email protected]">[email protected], and [email protected]">[email protected], respectively.

Technology Transfer Tactics Quotes ARE Partner Charley Macedo in Unlocking the AI advantage: A technology transfer office primer Article

Mon, 22 Apr 2024 00:00:00 +0000

Technology Transfer Tactics quotes Partner Charley Macedo in its April 2024 issue on monetizing AI in Tech Transfer:

"Every day brings what seems to be a never-ending stream of new AI tools. In fact, at his session on monetizing AI at the AUTM conference in February, IP attorney Charles R. Macedo , partner with Amster, Rothstein & Ebenstein LLP, told attendees that “since March of 2020, what my VC friends tell me is that every month they get 9,000 new AI companies.” And every day, the tools those companies are creating are getting better, because the more we use AI, the more it learns from our interactions, and the better it gets — quickly."

Read the full article HERE.

Charles R. Macedo, David P. Goldberg, Thomas Hart, Yangfan Xu coauthor Article for Oxford University Press's Journal of Intellectual Property Law & Practice on Round-up of United States copyright cases 2023

Mon, 18 Mar 2024 00:00:00 +0000

Charles R. Macedo, David P. Goldberg, Thomas Hart, Yangfan Xu co-author Article for Oxford University Press's Journal of Intellectual Property Law & Practice on Round-up of United States copyright cases 2023.

Abstract

The US Supreme Court and lower court provided further guidance on fair use defense.
The US Copyright Office provided guidance on AI as an author.
The Court of Appeals provided guidance on substantial similiarty, server test, abstraction-filtration-comparison, and discovery rule.

Read the full article here (subscription required)

Brief of New York Intellectual Property Law Association in Re Cellect LLC

Wed, 22 Nov 2023 00:00:00 +0000

Click here to download the PDF: Brief of New York Intellectual Property Law Association as Amicus Curiae In Re Cellect LLC

ARE Design Patent Alert: The Full Federal Circuit is Considering Obviousness of Design Patents

Fri, 30 Jun 2023 00:00:00 +0000

On June 30, 2023, the U.S. Court of Appeals for the Federal Circuit agreed to take on the following question:

Whether the current test for proving obviousness for a design patent has been overruled by US Supreme Court precedent.

LKQ Corp. v. GM Global Tech., 21-2348 (Fed. Cir. 2023)

In 1982, In re Rosen held that there must be an earlier design that has the same visual impression as the patented design to test whether a design patent is obvious. In addition, the test analyzes whether it would have been obvious for a designer to modify the earlier reference to create the patented design in question.

This matter was raised by LKQ Corp, which is seeking rehearing en banc of a January decision in its case against General Motors, insisting that the appellate court’s ‘decades-old’ test for proving obviousness for a design patent cannot stand following the Supreme Court’s 2007 KSR v. Teleflex decision, and should be modified or eliminated. While the question divided the panel, the most significant issue is what the replacement test should be. Not surprisingly, General Motors opposed the review, stating that not only did LKQ fail to raise the KSR issue with the PTAB, but also they are now seeking a complete ‘rewrite of design patent obviousness framework that has otherwise remained unchallenged for decades.’

For more information, please contact one of our attorneys.

* Chester Rothstein and Charles R. Macedo are partners, David Goldberg is an associate and Sofia Siciliani is a law clerk at Amster, Rothstein & Ebenstein LLP. They may be reached at [email protected]">[email protected], [email protected]">[email protected], [email protected]">[email protected] and [email protected]">[email protected].

ARE Trademark Law Alert: Supreme Court Announces Two-Part Test in its Abitron v. Hetronic Decision on Extraterritorial Reach of the Lanham Act

Fri, 30 Jun 2023 00:00:00 +0000

On June 29, 2023, the U.S. Supreme Court issued its ruling in Abitron Austria GmbH v. Hetronic International, Inc., No. 21-1023, 600 U.S. ___ (2023), addressing the Lanham Act’s extraterritorial reach. The Supreme Court held that trademark infringement cases “only extend to claims where the claimed infringing use in commerce is domestic.” Id. at 1. In a unanimous opinion written by Justice Alito, the Court vacated and remanded the Tenth Circuit Court of Appeals’ decision, applying its own two-step test for determining when a statutory provision may apply extraterritorially to foreign activity. The Court’s two-step test utilized “a canon of statutory construction known as the presumption against extraterritoriality,” where courts presume that although “United States law governs domestically [it] does not rule the world.” Id at 14 (citing RJR Nabisco, Inc. v. European Community, 579 U. S. 325, 335 (2016); Microsoft Corp. v. AT&T Corp., 550 U.S 437, 454 (2007).

Factual and Procedural Background

The underlying dispute was between a United States company, Hetronic, and six foreign parties, collectively “Abitron.” Hetronic and Abitron’s relationship started when Abitron began distributing Hetronic’s radio remote controls. Tension between the parties arose when Abitron found an old agreement that led Abitron to conclude that it owned much of Hetronic’s intellectual property rights. Abitron then began selling its own version of HETRONIC-branded products, predominantly in Europe, but also in the United States. Hetronic filed suit against Abitron, alleging trademark infringement under §1114(1)(a) and §1125(a)(1) of the Lanham Act, seeking damages for Abitron’s infringement worldwide.

Abitron argued that allowing Hetronic to recover domestically for global infringement would be an impermissible extraterritorial application of the Lanham Act. The U.S. District Court for the Western District of Oklahoma rejected Abitron’s argument and subsequently a jury awarded Hetronic roughly $96 million in damages with respect to Abitron’s domestic and foreign sales of infringing radio remote controls, despite the fact that only 3% of Abitron’s sales took place domestically. The District Court also entered a permanent injunction that prevented Abitron from using the infringing marks anywhere in the world.

On appeal, the Tenth Circuit affirmed the District Court’s decision but narrowed the broad injunction to cover specific countries. The Tenth Circuit, applying the First Circuit’s McBee v. Delica Co.¸417 F.3d 107 (1st Cir. 2005), framework, concluded that the District Court had properly applied the Lanham Act to Abitron’s conduct “because the ‘impacts within the United States [were] of a sufficient character and magnitude as would give the United States a reasonably strong interest in the litigation.’” Abitron Austria GmbH ET AL. v. Hetronic International, Inc., No. 21-1023, 600 U.S. ___ (2023) (quoting Hetronic Int’l, Inc. v. Hetronic Germany GmbH, 10 F. 4th 1016, 1046 (2021)).

The Supreme Court granted certiorari and rejected the Tenth Circuit’s framework for determining extraterritoriality in a unanimous opinion delivered by Justice Alito and two concurring opinions, one delivered by Justice Jackson and another delivered by Justice Sotomayor.

Majority Opinion

Bright Line Test. In seeking to create a bright line test, the Supreme Court held that the correct framework to evaluate the extraterritorial reach of the Lanham Act would recognize the law’s longstanding presumption against extraterritoriality. The first step of the analysis “turns on whether ‘Congress has affirmatively and unmistakably instructed that’ the provision at issue should ‘apply to foreign conduct.’” Abitron Austria GmbH ET AL. v. Hetronic International, Inc., No. 21-1023, 600 U.S. ___ (2023) (quoting RJR Nabisco, 579 U. S. at 337). Finding that Congress has not “unmistakably instructed” that the Lanham should apply extraterritorially, the Court moved to the second step, which asks “when claims involve ‘domestic’ applications of these provisions.” Abitron Austria GmbH ET AL. v. Hetronic International, Inc., No. 21-1023, 600 U.S. ___ (2023). The Court stated that the answer to this question turns on where the conduct relevant to the focus of the statute at issue took place. Because the focus of the Lanham Act is to prevent infringing use in commerce, the Court held that if the infringing activity occurred in the United States, then the case involves a permissible application of the Lanham Act.

The Court then vacated the Tenth Circuit’s judgment and remanded the case for further proceedings consistent with the Court’s opinion.

Justice Jackson’s Concurrence

One concurrence, authored by Justice Jackson, agreed with the majority’s two-step framework but wrote separately to point out that “use in commerce” occurs “whenever the mark serves its source-identifying function.” To illustrate this point, Justice Jackson mentioned that “‘use in commerce does not cease at the place the mark is first affixed, or where the item to which it is affixed is first sold,’” and discussed a hypothetical case were travelers from Europe resold bags purchased in Europe in the United States, possibly opening the door to a domestic infringement action. Justice Jackson’s concurrence concludes that a foreign entity may be subject to Lanham Act liability even if it never “directly” sold its infringing products in the United States.

Justice Sotomayor’s Concurrence

A separate concurrence, penned by Justice Sotomayor and joined by Chief Justice Roberts and Justices Kagan and Barrett, disagreed with the second step of the majority’s framework, and argued that the Lanham Act should apply to conduct occurring abroad if, as a result, consumer confusion occurs in the United States.

Legal And Practical Implications

In short, this decision held that Congress has not intended for the Lanham Act to apply extraterritorially, and that the Act may only be applied when infringing use in commerce occurs domestically. This bright-line test provides trial courts, practitioners, and trademark owners with at least some guidance, and should ameliorate the forum shopping caused by the current Circuit split on this issue.

As a practical matter, US brand owners will need to be more vigilant in seeking trademark protection in foreign jurisdictions in which they do business. These brand owners will also likely need to bring more trademark infringement actions in those foreign jurisdictions.

We will continue to monitor developments and provide further updates regarding this case, and the law of trademark with respect to extraterritorial infringement. In the meantime, please feel free to contact us if you have questions regarding issues raised by this case.

Anthony Lo Cicero, Douglas A. Miro and Charles Macedo are partners, David P. Goldberg is an associate, and Jamie Zipper is a Law Clerk at Amster, Rothstein & Ebenstein LLP. Their practices specialize in all aspects of intellectual property, including trademark law. They can be reached at [email protected]">[email protected], [email protected]">[email protected], [email protected]">[email protected], [email protected]">[email protected], and [email protected]">[email protected], respectively.

Trademark Lawyer Magazine Publishes Article: US Supreme Court to Rule on Jack Daniel's proposal to throw 'Bad Spaniels' to the dogs

Fri, 16 Jun 2023 00:00:00 +0000

The Trademark Lawyer Magazine features article by Amster, Rothstein & Ebenstein's Max Vern and David Goldberg on "US Supreme Court to Rule on Jack Daniel's proposal to throw 'Bad Spaniels' to the dogs". The article was published on pages 8-11, Issue 2 2023 of The Trademark Lawyer Magazine.

Read the full article here.

ARE Trademark Law Alert: U.S. Supreme Court Overturns Ninth Circuit’s Decision and Rules that Likelihood of Confusion Test Must Be Applied to Dog Toy Parody in Jack Daniel’s Case

Thu, 08 Jun 2023 00:00:00 +0000

On June 8, 2023, the U.S. Supreme Court issued its ruling in Jack Daniel’s Properties, Inc. v. VIP Products LLC, No. 22-148, 599 U.S. ___ (2023), unanimously vacating and remanding the Ninth Circuit Court of Appeal’s decision that VIP’s BAD SPANIELS dog toys neither infringe nor dilute Jack Daniel’s trademark and trade dress rights in its iconic OLD NO. 7 BRAND TENNESSEE SOUR MASH WHISKEY. The key to the Supreme Court’s narrow decision is that when the alleged infringer uses a trademark as a designation of source for the infringer’s own goods, the way which the Lanham Act most cares about, the lower court must conduct a standard likelihood of confusion trademark and dilution analysis. This narrow decision makes it clear that in those cases, even parodic marks may cause a likelihood of confusion or dilution.

The dispute between Jack Daniel’s Properties, Inc. (“Jack Daniel’s”) and VIP Products LLC (“VIP”) arose from the sale of a squeaky dog toy, BAD SPANIELS, that humorously resembled a bottle of Jack Daniel’s whiskey. Finding the toy to be in poor taste, Jack Daniel’s demanded that VIP cease selling its product. In response, VIP filed a lawsuit in the U.S. District Court for the District of Arizona seeking a declaratory judgment that its product did not infringe or dilute Jack Daniel’s trademark and trade dress. VIP strongly believed their argument of parody would prevail against any future claims. Jack Daniel’s then countersued with claims of trademark infringement and dilution. After a four-day bench trial the District Court held in favor of Jack Daniel’s.

On appeal, the Ninth Circuit reversed. With respect to the first claim of trademark infringement, the Ninth Circuit held that VIP’s use of its parodic trademark was expressive and, therefore, subject to First Amendment protection under the Rogers test, which holds free speech rights need to be balanced against intellectual property rights with respect to expressive works. See Rogers v. Grimaldi, 875 F. 2d 994. As to the second claim, dilution, the Ninth Circuit held that VIP’s trademark was “noncommercial” use because VIP’s mark communicated a message of parody. In short, the Ninth Circuit said there was no need to conduct a likelihood of confusion, or a likelihood of dilution analysis, where the accused product is a parody.

The Supreme Court granted review on both claims and rejected both of the Appeals Court’s conclusions in a unanimous opinion delivered by Justice Kagan and two concurring opinions, one delivered by Justice Sotomayor and another delivered by Justice Gorsuch.

The Supreme Court found that the BAD SPANIELS trademark should not receive “special First Amendment protection,” and thus should not be subject to the Rogers test prior to conducting a traditional likelihood of confusion analysis under the Lanham Act. Explicitly sidestepping the question of whether Rogers should be applied in other circumstances, the Court held that it is not applicable when an infringer uses its mark for source identification, which VIP did in this case. Pointing to extensive case law, the Court stated that Rogers “has always been a cabined doctrine,” only applying in cases where the mark is not being used as a source identifier. Thus, the fact that VIP uses its mark to convey parody does not automatically make it subject to the Rogers test. “As a leading treatise puts the point, the Ninth Circuit’s expansion of Rogers ‘potentially encompasses just about everything’ because names, phrases, symbols, designs, and their varied combinations often ‘contain some “expressive” message’ unrelated to the source.’” Jack Daniel’s Properties, Inc. v. VIP Products LLC, No. 22-148, 599 U.S. ___ (2023) (quoting 1 J. McCarthy, Trademarks and Unfair Competition (5th ed. 2023)).

Additionally, the Supreme Court found that VIP’s use of the BAD SPANIELS trademark did not fall under the “fair use” exclusion from dilution liability for noncommercial use of a mark. The Court held that although the exclusion specifically encompasses parodying, it can only be applied if the mark is not used as a source identifier. Thus, a diluter is not “shielded” from liability if its parodic mark is source-identifying. Importantly, the Court did not address exactly how far the “noncommercial use” exclusion reaches.

The Court then remanded the case to determine whether a consumer is likely to be confused by the use of these two marks, taking into consideration the fact one of the marks is meant to convey parody.

The Supreme Court’s decision makes it clear that there are no shortcuts around conducting a likelihood of confusion or a likelihood of dilution analysis with respect to goods that may not be primarily expressive. The consequence is that trademark infringement cases regarding arguably expressive goods will become more expensive, with parties having to hire expert witnesses and conduct consumer surveys instead of disposing of such cases early in the litigation process.

However, the concurrence, authored by Justice Sotomayor and joined by Justice Alito, addresses concerns with the weight given to consumer surveys in the context of parodic marks. The opinion suggests that results may be skewed by the framing of questions which would unduly silence parodies. The concurrence also cautions that wealthier mark owners with greater ability to conduct these surveys “would be handed an effective veto over mockery.”

A second concurring opinion, authored by Justice Gorsuch and joined by Justice Thomas and Justice Barrett, leaves the door open as to the importance of Rogers in future cases.

We will continue to monitor developments and provide further updates regarding this case, the Rogers doctrine, and the law of trademark infringement and dilution. In the meantime, please feel free to contact us if you have questions regarding issues raised by this case.

Chester Rothstein and Charles R. Macedo are partners, David P. Goldberg is an associate, and Jamie Zipper is a law clerk at Amster, Rothstein & Ebenstein LLP. Their practices specialize in all aspects of trademark law. They can be reached at [email protected]">[email protected], [email protected]">[email protected], [email protected]">[email protected], and [email protected]">[email protected] respectively.

ARE Patent Alert: U.S. Supreme Court Issues Ruling on Enablement of Functionally Claimed Composition Claims

Fri, 19 May 2023 00:00:00 +0000

On May 18, 2023, the U.S. Supreme Court issued its decision in Amgen, Inc. v. Sanofi et al., No. 21-757, 598 U.S. ____ (2023), unanimously affirming the Federal Circuit’s invalidation of Amgen’s claims to a broad class of antibodies for lack of enablement. Although some observers have lamented that the opinion marks a shift in the law of enablement, patent practitioners and industry professionals understand that the claim type at issue—a composition claimed solely by its function—has long been notoriously difficult to support with an enabling disclosure. Indeed, to support its analysis, the Supreme Court reached all the way back to O’Reilly v. Morse, in which a claim covering “all means of achieving telegraphic communication” was invalidated by the Supreme Court because it was too broad. Amgen, slip op. at 10.

At issue in Amgen were claims of two US patents reciting antibodies that have two functions: (1) binding to one or more of sixteen specified amino acid residues of a particular protein, and (2) blocking that particular protein from binding to a receptor. Commenting on the breadth of these claims, the Court noted that “Amgen seeks to monopolize an entire class of things defined by their function—every antibody that both binds to particular areas of the sweet spot of PCSK9 and blocks PCSK9 from binding to LDL receptors.” Amgen, slip op. at 15.

In affirming that the claims lacked enablement across their full scope, the Supreme Court did not provide a deep factual analysis. Instead, they simply held that the two methods provided by Amgen to produce antibodies with the claimed blocking and binding functionality amount to “little more than two research assignment”— characterizing the first method (what Amgen described as a “roadmap” that could be used to generate new antibodies withing the scope of the claims) to be a mere description of Amgen’s own “trial-and-error” method for finding functional antibodies, and the second method (of “conservative substitution” of amino acids from the disclosed antibodies) to similarly be nothing more than an invitation to make substitutions and see if the resulting antibody has the same functionality. Amgen, slip op. at 16. Notably, the opinion leaves open the possibility that a “roadmap” or “conservative substitution" may enable other claims in other patents, if the inventor “identifies a quality common to every functional embodiment”. The Supreme Court alleged that such a common quality was absent from Amgen’s disclosure. Id at 17.

Finally, the Supreme Court dismissed Amgen’s argument that the Federal Circuit had “conflated the question whether an invention is enabled with the question [of] how long may it take a person skilled in the art to make every embodiment within a broad claim”. Amgen, slip op. at 18. Here, the Supreme Court noted, as we have previously commented, that the Federal Circuit went out of its way to say that it “do[es] not hold that the effort required to exhaust a genus is dispositive”. Id.

In a prior article, we emphasized that that Federal Circuit’s decision did not focus solely on the number of different antibodies falling within the claims, but their functional breadth as well. Amgen Inc. v. Sanofi, 987 F. 3d 1080, 1087 (“[W]e are not concerned simply with the number of embodiments but also with their functional breadth. Regardless of the exact number of embodiments, it is clear that the claims are far broader in functional diversity than the disclosed examples”). The Federal Circuit noted that the claims cover antibodies binding up to sixteen residues, while none of their examples bind more than nine. Id. n.1. It was possible for the Supreme Court to find the claims invalid for this reason alone, leaving open the possibility of functionally claiming a composition with the disclosure of a sufficient number of examples across the functional scope of the claims. However, a discussion or analysis of this fact is notably absent from the Supreme Court decision. Thus, the Supreme Court holding goes further than invalidating Amgen’s claims simply because they did not exemplify antibodies with sufficient functional diversity (i.e. antibodies that bind all sixteen residues as encompassed by the claims). The Supreme Court held that the methods described by Amgen to produce antibodies with the claimed double binding functionality require too much trial and error to warrant granting them a monopoly to all antibodies with that functionality.

As discussed above, practitioners understand that it is difficult to provide enabling support for claims that broadly encompass compositions with a particular functionality. Although reasonable people may not agree that Amgen’s screening method for producing antibodies with the claimed double binding functionality was merely “trial and error”, as alleged by the Supreme Court, Amgen v. Sanofi reinforces the need for inventors to identify and describe “a quality common to every functional embodiment” to support broad functional claims. The case also reinforces the need to pursue a variety of claiming strategies to obtain sufficient scope of protection for biological inventions.

We will continue to monitor developments and provide further updates about the enablement doctrine.

In the meantime, please feel free to contact our attorneys regarding issues raised by this case.

Gary Gershik and Darren Haber are partners at Amster, Rothstein & Ebenstein LLP. Their practices specialize in all aspects of life sciences IP procurement. They can be reached at [email protected]">[email protected] and [email protected]">[email protected], respectively.

ARE Copyright Alert: U.S. Supreme Court Issues Ruling on the Application of the First Prong of Fair Use Defense

Fri, 19 May 2023 00:00:00 +0000

On May 18, the Supreme Court issued a ruling in Andy Warhol Foundation for Visual Arts, Inc v. Goldsmith, No. 21-869, 598 U.S. _____ (2023), clarifying the scope of the first prong of the “fair use” defense to copyright infringement. In an opinion by Justice Sotomayor, the Court, 7-2, affirmed the ruling of the Second Circuit, holding that the “purpose and character” of the Andy Warhol Foundation’s particular commercial use of Lynn Goldsmith’s photograph does not favor AWF’s “fair use” defense to copyright infringement.

By way of background, in 1984, photographer Lynn Goldsmith granted a limited, one-time only license to Vanity Fair of a photograph she had taken of the musician Prince. Vanity Fair hired pop artist Andy Warhol to create an illustration of the photograph, resulting in a purple silkscreen which appeared on the cover of Vanity Fair’s November 1984 issue. Warhol created a total of sixteen works from the photograph, one of which was an orange silkscreen, known as “Orange Prince”. After Prince’s death in 2016, the Andy Warhol Foundation for the Visual Arts, Inc. (“AWF”) (which controls the intellectual property of the late Warhol) licensed to Condé Nast an image of “Orange Prince” to appear on the cover Vanity Fair’s issue commemorating Prince. Goldsmith and AWF entered into litigation, with Goldsmith alleging that AWF’s use of Goldsmith’s photograph constituted copyright infringement, and AWF claiming fair use.

While the District Court granted AWF summary judgment on its defense of fair use, the Second Circuit reversed, finding that all four fair use factors favored Goldsmith. The Supreme Court granted certiorari on the sole question of whether the first fair use factor, “the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes”, 17 U.S.C. §107(1), weighed in favor of AWF’s commercial license to Condé Nast of an image of Orange Prince.

In the majority opinion authored by Justice Sotomayor and joined by Justices Thomas, Alito, Gorsuch, Kavanaugh, Barrett, and Jackson, the Court held that it did not, affirming the Second Circuit ruling. Relying on its precedent, including its opinion in Campbell v. Acuff-Rose Music, Inc., 510 U.S. 569 (1994), the Court noted that the “first fair use factor considers whether the use of a copyrighted work has a further purpose or different character, which is a matter of degree, and the degree of difference must be balanced against the commercial nature of the use.” Goldsmith, majority slip op., at 15. Accordingly, where “an original work and a secondary use share the same or highly similar purposes, and the secondary use is of a commercial nature, the first factor is likely to weigh against fair use, absent some other justification for copying.” Id.

Applying this reasoning, the Court found that the first factor did not favor fair use. According to the Court, the purpose of the works is similar, as they are both “portraits of Prince used in magazines to illustrate stories about Prince”, id., majorityslip op., at 22-23, and AWFs use – licensing the photograph – was commercial in nature. Further, while recognizing that the “meaning or message” of a secondary work, to the extent it can be reasonably perceived, “is relevant to . . . purpose,” the Court noted that it was not dispositive. Id. at 31. Here, any difference in meaning was not, standing alone, enough to resolve the first factor in favor of a finding of fair use, particularly given the commercial context.

Additionally, in a footnote, the Court clarified that this outcome was consistent with its holding in Google LLC v. Oracle America, Inc., 141 S. Ct. 1183 (2021), where the Court found that placing Oracle’s code in a new context (i.e. mobile devices), given the necessity of use and context of the case, was fair use. Goldsmith, majorityslip op., at 30, n. 18. The Court did not engage in a significant comparison of the facts of the cases, however.

Justice Gorsuch, joined by Justice Jackson, authored a concurring opinion, interpreting the question as a “narrow one of statutory interpretation” and opining that the issue was one of “which ‘purpose’ and ‘character’ counts”—“the purpose the creator had in mind when producing his work and the character of his resulting work” or “the purpose and character of the challenged use.” See id., concurrenceslip op., at 1-2 (emphasis in original). Because the law does not require “judges to try their hand at art criticism” but to instead focus on “the particular use under challenge”, the Court’s decision was correct due to the significant overlap in purpose and use between AWF’s challenged use and Goldsmith’s protected use. Id. at 2.

Justice Kagan, joined by Chief Justice Roberts, dissented, casting the majority’s opinion as a “doctrinal shift” resting more on ipse dixit than sound legal reasoning, and which “undermines creative freedom” by emphasizing the similarity in commercial use in the two works. Id., dissent slip op., at 3-4. The dissent points to precedent – in Campbell and Google – suggesting that transformative copying qualifies as fair use, and pointed towards the transformative nature of Warhol’s work to suggest that the majority was mistaken in its analysis.

The dissent also takes a broad stance on the importance of follow-on works and the way fair use protects them. The dissent’s opinion describes the ways in which follow-on works can be transformative, pointing to, as one example of many, a series of paintings surrounding the reclining nude, and reflecting sardonically that “the majority would presumably describe the purposes to be “just two portraits of reclining nudes painted to sell to patrons.” See id., dissentslip op., at 31. In the dissent’s opinion, fair use exists to protect the creativity in these works, and “[t]he majority’s commercialism-trumps-creativity analysis”, id. at 19, in determining transformative use “will stifle creativity of every sort.” Id. at 36.

In response, the majority argued that “the Court’s decision, which is consistent with longstanding principles of fair use,” would not “snuff out the light of Western civilization”, and that the dissent’s “single-minded focus on the value of copying ignores the value of original works.” Id., majority slip op., at 36-37. In the majority’s telling, “the existing copyright law, of which today’s opinion is a continuation, is a powerful engine of creativity.” Id. at 37.

While the Court in Goldsmith, as it did in Google, thus suggested that its opinion was consistent with settled copyright law, the exact effect of its opinion, and whether it instead, as the dissent suggests, represents a “doctrinal shift,” remains to be seen.

We will continue to monitor the development of the fair use doctrine and provide further updates as courts throughout the country begin the task of interpreting and applying Goldsmith.

In the meantime, please feel free to contact our attorneys regarding issues raised by this case.

Charles R. Macedo is a partner, Olivia Harris is an associate, and Thomas Hart is a law clerk at Amster, Rothstein & Ebenstein LLP. Their practices specialize in all aspects of intellectual property law, including trademarks, copyrights and patents. They can be reached at [email protected]">[email protected], [email protected]">[email protected] and [email protected]">[email protected] respectively.