Intellectual property is frequently the most valuable asset a business holds. This newsletter is focused on helping you identify, protect and leverage intellectual property important to your business. The views expressed herein are solely those of the author.
Paul D. Chancellor
Attorney
Ocean Law
3463 Red Bluff Ct. Simi Valley, CA 93063
Tel: 805.368.4586
Email:
Beating Cybersquatters
Cybersquatters register domain names that are confusingly similar to the trademarks of legitimate businesses. Trademark and unfair competition lawsuits are one means of repossessing a confusingly similar domain name. Another means, often quicker and less expensive, is ICANN's Uniform Dispute Resolution Process. We discuss this useful process in the article at right.
Trademarks, What's In A Name
The temptation to select a descriptive, weak trademark has gotten the better of even sophisticated business people. The first article below discusses trademark selection as an important first step in obtaining broad trademark protection.
Supreme Court Rules On Obviousness
Patentability requires utility, novelty and non-obviousness. In KSR v. Teleflex, an accused infringer asked the high court to reconsider the patent appeal court's standard for obviousness. In its decision, the Supreme Court instructed the appeals court in the proper application of its 1966 precedent from Graham v. John Deere Co. See the article below, U.S. Supreme Court Rules On Obviousness.
...
Trademarks, What's In A Name? Trademarks are repositories for business good-will. They connect products with their sources in the minds of consumers. Given competing products, consumer purchasing decisions often turn on brand, because the purchaser has come to trust the products of a particular manufacturer. And, unlike many assets, trademarks do not waste away; rather, the product-source connection has the potential to strengthen over time, becoming more valuable to the trademark owner as more consumers make the connection. Ideally, trademark protection begins with the careful selection of an appropriate mark.
A trademark is a word, phrase, symbol or design, or a combination of words, phrases, symbols or designs, that identifies and distinguishes the source of the goods of one party from those of others (15 U.S.C. Section 1127). It therefore identifies, in the minds of purchasers, a particular good or service with its source. If the mark selected cannot perform this function, it is not usable as a trademark.
For example, consider a merchant who picks the term "PEAR" to indicate to customers the source of his goods. If the merchant sells fruit from pear trees, the selected mark is not distinctive and therefore cannot function as a trademark. But, if the merchant sells MP3 players, the mark is distinctive and has the potential to become a strong trademark.
Explaining this legal doctrine is not difficult. A trademark must be able to distinguish the goods of one merchant from the similar goods of another. The name commonly used for a product is not useful to distinguish a merchant's goods from those of its competitors; in fact, all merchants selling pears will likely use this generic term when describing their product. No merchant has the right to deplete the English language by claiming an exclusive right to use a common term for the product being sold.
But, common terms can be properly used as trademarks. This occurs when the mark chosen is not descriptive of the product with which it is connected. In the example above, PEAR is not a generic term for MP3 players. Nor does PEAR describe or even suggest an MP3 player. When a seller of MP3 players selects PEAR for its trademark, no other merchant selling MP3 players can reasonably claim that his competitor has deprived him of the use of a word needed to market his product. In the trademark law, marks that are common terms, but that bear no relationship to the product, are often referred to as "arbitrary" marks.
While trademark law prohibits the protection of generic marks, it accepts that descriptive, but not generic, terms may acquire sufficient distinctiveness through use to function as trademarks. A mark is considered descriptive when its use conveys to one who is unfamiliar with the product its functions or qualities. For example, the mark SOFTIES used in connection with facial tissues would likely be found to be descriptive of the product.
It is not uncommon for merchants using descriptive marks to obtain a federal registration after five years of continuous use of the mark in accordance with the rules of the United States Patent and Trademark Office. Nevertheless, the owner of a descriptive mark, even if the mark is registered, will not normally be entitled to the broad swath of protection typically reserved for strong marks.
The following list of federally registered trademarks illustrates a spectrum of inherent trademark strength. The strongest, a coined term, is listed first and the weakest, a descriptive term, is listed last: EXXON for petroleum products (a coined term, inherently strong); APPLE for computers (an arbitrary term, inherently strong); TALON for zippers (a suggestive term, inherently strong); and, WHEATIES for wheat cereal (a descriptive term, inherently weak).
Assuming that you are working from a clean slate, selecting good candidates for your trademark is the first step. A second important step is to assure yourself that the mark selected is not confusingly similar to any of the marks used by third parties.
Takeaways:
1. Consider selecting a trademark that is inherently strong 2. Consider performing a trademark search to assure that your mark is not confusingly similar to the marks used by third parties
Supreme Court Rules On Obviousness The United States Supreme Court's decision in KSR v. Teleflex affects patents that combine known elements is a new way. In a nutshell KSR raises the bar on patentability for combination patents and makes them more difficult to enforce against alleged infringers in the courts.
In KSR, Teleflex obtained a patent (U.S. Pat. No. 6,237,565) on an adjustable brake pedal combined with an electronic position sensor. When competitor KSR developed a similar pedal and sensor combination for General Motors, Teleflex sued KSR for patent infringement. The trial court found for KSR, but the patent appeals court reversed. KSR appealed to the Supreme Court.
Under U.S. Patent law, an inventor is not entitled to a patent unless the invention it is useful, new and not obvious (35 U.S.C. 101 et seq.). An invention is not new if it is disclosed in a single prior art reference and it MAY be obvious if disclosed by multiple prior art references. Before deciding the ultimate question of obviousness, Supreme Court precedent requires an inquiry into 1) the scope and content of the prior art, 2) the differences between the prior art and the claims at issue and 3) the level of ordinary skill in the pertinent art (Graham v. John Deere, 383 U.S. 1 (1966)).
The issue in KSR was whether the patent appeals court's teaching/suggestion/motivation ("TSM") test for obviousness was consistent with Supreme Court precedent and in particular the Graham precedent. Among other things, the TSM test is designed to exclude improper hindsight from the obviousness analysis. For example, merely finding one prior art reference disclosing an adjustable pedal and another disclosing an electronic sensor does not make Teleflex's invention obvious. The TSM test requires a showing that some teaching, suggestion or motivation would have led a skilled person to combine these references to make the electronic gas pedal.
In KSR, the Supreme Court found the patent appeals court improperly transformed the TSM test into a rigid rule that limited the obviousness inquiry required by Graham. Reversing the judgment of the patent appeals court, the Supreme Court pointed to four errors.
a) Failure to recognize that "any need or problem known in the field of endeavor at the time of invention and addressed by the... [prior art] can provide a reason for combining the elements in the manner claimed." (A problem known in the field can provide a reason to combine prior art references.)
b) Assuming that "a person of ordinary skill attempting to solve a problem will be led only to those elements of the prior art designed to solve the same problem." (Persons of ordinary skill in one field may adopt solutions known to them that are used in another.)
c) Concluding, "in error, that a patent claim cannot be proved obvious merely by showing that the combination of elements was 'obvious to try.'" (Where market pressure to solve certain problems is rewarded by the anticipated success, the fact that a combination was obvious to try might show that the invention was obvious.)
d) Drawing "the wrong conclusion from the risk of courts and patent examiners falling prey to hindsight bias." (Guarding against hindsight bias is not necessarily inconsistent with a factfinder's recourse to common sense.)
In its post-KSR cases, the patent appeals court can be expected to lay out new boundaries on obviousness consistent with the Supreme Court's ruling. In the meantime, patent applicants and litigants should, among other things, take heed where an invention solves a known problem..
Takeaways: 1. Consider not mentioning problems to be solved in the patent application.
2. Consider mentioning unexpected properties in patent application.
3. Consider citing patents that teach away in the patent application.
The views expressed in this newsletter are those of Paul D. Chancellor and are for informational purposes only. They are not nor are they intended to be legal advice.
Trademark owners are at risk from a rise in the incidence of cybersquatting. Recent developments promote cybersquatting by automatically registering expired domain names, "parking" domain names on pay-per-click portal sites, offering to register names free-of-charge for a five-day 'tasting' period, proliferating new registrars, and establishing new generic Top Level Domains. These developments cause mass, anonymous registrations of domain names without specific consideration of third-party intellectual property rights.
Trademark owners have legal and administrative options to challenge cybersquatters. Where a domain name is confusingly similar to a trademark, the trademark owner can raise several legal causes of action against the holder of the domain name. Federal claims may be brought under the Lanham Act and under the Anticybersquatting Consumer Protection Act (15 U.S.C. § 1051 et seq.). State claims may be brought under various state unfair competition and cybersquatting laws (e.g. Cal. Bus. & Prof. Code § 17200 et seq.). However, as to federal and state law claims, they must be litigated. An expeditious and likely less expensive alternative to litigation is available through ICANN.
As a condition to becoming a registrar for selected top-level domains (.biz, .com, .info, .name, .net and .org), the Internet Corporation for Assigned Names and Numbers ("ICANN") requires each registrar to adopt its Uniform Domain-Name Dispute-Resolution Policy ("UDRP"). Under the policy, disputes alleged to arise from abusive registrations of domain names (for example, cybersquatting) are addressed by expedited administrative proceedings involving arbitration. The policy is invoked when a trademark owner submits a complaint to an approved dispute-resolution service provider such as the World Intellectual Property Organization ("WIPO").
The facts of the case determine whether a trademark owner is better served by litigating a federal or state claim or by using ICANN's administrative proceeding. Importantly, a party dissatisfied with the arbitrator's decision in a UDRP case may file -- within ten days of the arbitrator's decision -- a trademark, unfair competition or cybersquatting claim in a court of competent jurisdiction. If the UDRP arbitration authorized the grant of a remedy to a party, the remedy will be stayed pending the outcome of the litigation.
When the trademark owner decides to use ICANN's administrative proceeding, the first step is to prepare a complaint. Unlike litigation in U.S. courts, a UDRP complaint includes the plaintiff's primary evidence. In particular, the trademark owner will need to put forth evidence showing: a) The domain name is identical or confusingly similar to a trademark in which the trademark owner has rights; b) The domain name holder has no rights or legitimate interests in respect of the domain name; and, c) The domain name has been registered and is being used in bad faith.
The domain name holder has twenty calendar days to respond to the trademark owner's complaint. Whether the domain name holder defaults (fails to respond) or not, an arbitration panel is appointed (1 or 3 arbitrators). Within seventeen (17) days of the panel's appointment, the parties are notified of the arbitrator's decision. It is this decision date that starts the ten (10) day window for a party to file the case in court.
The most striking features of the UDRP process are speed, expertise of the arbitrators and minimal "court" documents. While a trademark owner should obtain the advice of counsel prior to selecting litigation or the UDRP process, each of these options should be considered.
Takeaways: 1. Consider filing a UDRP action first 2. Consider filing court and UDRP actions simultaneously
Newsletter 
Supreme Court Rules On Obviousness 
