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Provided by Vihar R. Patel and Sponsored by Enterprise Law Group, LLPArchive for Importation of Infringing Goods
The Antitrust side of IP Litigation
Antitrust counterclaims are once again viable options for defendants involved in Intellectual Property (IP) litigation. Often a Plaintiff is utilizing a patent infringement suit as a method of interfering with the business relationship of a competitor.
However, if the patent was obtained by knowing and willful fraud or the lawsuit is a sham for interfering with competitors’ business relationships, then the patent may be invalid and subject the Plaintiff to an antitrust violation. Walker Process Equipment, Inc. v. Food Machinery & Chemical Corp., 382 U.S. 172, 177 (1975); In re Independent Service Organizations Antitrust Litigation, 203 F.3d 1322, 1326 (Fed. Cir. 2000); and Hazelquist v. Guchi Moochie Tackle Co., 2004 U.S. Dist. Lexis 13991 (W.D. Wash. May 12, 2004).
The risk of an antitrust violation and counterclaim is not limited to sham patent litigation. Plaintiffs attempting to utilize trademark infringement suits to maintain a monopoly (price control) or restrict competition face a similar risk of an antitrust violation. In Marketing Displays, Inc. v. TrafFix Devices, Inc., 200 F.3d 929, (6th Cir. 1999), the court permitted an antitrust counterclaim against a plaintiff asserting trade dress infringement after the expiration of patent.
If the litigation is objectively baseless in the sense that no reasonable litigant could expect success on the merits, then it may be the basis for a antitrust violation. Professional Real Estate Investments, Inc. , v. Columbia Pictures Industries, Inc. , 508 U.S. 49, 60 (1993). However, this does not mean that a product’s different qualities cannot be protected simultaneously, or successively by more than one statutory means for protection of intellectual property. Kohler Co. v. Moen, Inc. , 12 F.2d 632, 638-39, (7th Cir. 1993).
Understanding the nuances of the scope of intellectual property protection that can be obtained for a product is crucial to your ability to protect your market and your investments.
Displaying Products at Trade Shows-Basis for Personal Jurisdiction!
Imagine you are a foreign company selling a product in Brazil. Your company does not sell or distribute products in the United States (“US”). You learn of a trade show or convention relating to your products. It’s an international trade show or convention located at a site in the US. You decide to send a company representative to the US with a demo of your product.
Little did you know that now, you will be subjecting yourself to a lawsuit in the US. This is very close to the facts that led the Federal Circuit to find personal jurisdiction for Synthes (U.S.A) to sue GMReis. GMReis’ CEO and an employee attended international trade show of the American Association of Orthopedic Surgeons (AAOS) in San Diego and displayed five interlocking bone plates at a booth. At the trade show, GMReis was served with a complaint for patent infringement.
Synthes an assignee of a US patent directed at “a bone plating system and method for fracture fixation of bone” sued GMReis, a Brazilian company for patent infringement in the US. The Federal Circuit held that under FRCP 4 (k) (2), although the court did not have general jurisdiction over GMReis, there was sufficient contact for specific jurisdiction relating to patent infringement.
The court’s holding was based on the following activities by GMReis: 1) attending seven (7) trade shows in the US demonstrating its products; 2) selling one (1) product to a veterinary company in the US; 3) purchasing parts and a manufacturing machine for use in Brazil; 4) meeting with two American companies regarding purchase and development of non accused products; and 5) two inquiries by US entities regarding FDA approval of its interlocking bone plating products and potential clinical trials.
The Federal Circuit’s analysis of minimum contacts and whether or not it would be reasonable and fair to sue a foreign company in the US; opens the door to patent infringement claims against foreign entities. Only, time will tell how far this door will open, but it’s another tool for a patent holder to protect its interest.
Design Patents: Rejection of Point of Novelty Test and Adoption of a Uniform Hypothetical Ordinary Observer Test!
The Federal Circuit made an important ruling in Egyptian Goddess Inc. v. ADI Torkiya, for determining infringement in design patent cases. The Court rejected and abolished the Point of Novelty Test as a second or additional test for determining whether an accused device infringes the claimed design.
The Court stated that the test is the same as the Supreme Court’s formulation in Gorham: whether or not a hypothetical ordinary observer would find or be deceived into believing that the accused device is the same or substantially the same as the Patentee’s claimed design, in light of, the prior art within the Patentee’s field? Id. This test accounts for greater protection in areas where the Patentee’s field is less crowded and less protection in areas where the Patentee’s field is more crowded.
The Court went on to state that the Patentee retains the burden of proof with respect to demonstrating substantial similarity for design patent infringement. However, the Accused Infringer bears the burden of production for providing prior art references that it wants to be considered by the trier of fact. Id.
This is an important ruling clarifying the often confusing area of design patent infringement and proper application of the Ordinary Observer Test should lead to better results for both Patentees and Accused Infringers.
Attached is a copy of the decision for your consideration: egyptian-goddess
The PRO-IP Act: What is it and what does it mean for US business?
The PRO-IP Act, is a bill President Bush signed into law in October of 2008. Its actual name is the Prioritizing Resources and Organization for Intellectual Property Act of 2008 (the PRO-IP Act). The PRO-IP Act provides for increased enforcement of IP laws domestically and internationally.
The PRO-IP Act’s Trademark arm provides for increased statutory penalties ($1000 to $200,000) on both the importation and exportation of goods with counterfeit marks. It also increases the maximum penalty for willful infringement from $1,000,000 to $2,000,000. Finally, the trademark arm provides for treble damages where counterfeit marks are intentionally used or where goods or services are provided for the purpose of counterfeiting. The Court is granted discretion to waive the trebling of damages only upon proof of extenuating circumstances.
The Pro-IP Act’s Copyright arm provides for increased impoundment and seizure, including business records pursuant to an appropriate protective order. The Copyright arm further directs the Court to ignore registration inaccuracies, unless the inaccuracy was willful, or if the Copyright Office would have refused registration based on knowledge of the inaccuracy. Finally, the Copyright arm provides a tool for musical performers to register their works with the US Customs and Border Protection to receive notice of unauthorized copies entering the US.
In general, the PRO-IP Act also increases coordination and enforcement of IP laws domestically and internationally by creating a White House Liaison (IPEC), providing stiffer criminal penalties, and providing $25 million dollars in annual funding to help state and local law governments combat IP theft and infringement crimes.
It will be interesting to see how the PRO-IP Act impacts individuals, business owners, entrepreneurs, courts and IP practitioners. However, the PRO-IP Act provides significant tools for IP owners to protect and enforce their rights. Individuals and business owners with strong IP plans and strategies are well positioned to capitalize on the benefits that the PRO-IP Act provides.
