Sweet Justice?

Shaw Industries sued Hershey on February 5, 2013, seeking a declaration that Shaw's two decades of use of "chocolate kiss" as the name for the color carpets it sells does not infringe Hershey's rights. See Shaw Industries Group, Inc. v The Hershey Company, 4:13-cv-00027-HLM (N.D.Ga). According to the complaint, Hershey first contacted Shaw about the chocolate kiss color on December 19, 2012. Even after Shaw told Hershey on January 11, 2013, that it was dropping the chocolate kiss color later in 2013, but Hershey continued to threaten Shaw in a January 24, 2013 letter, and Shaw sued to resolve Hershey's claims.
This case illustrates the tension between IP rights holders and the public domain. How should someone describe the color of a carpet that is the color of a chocolate kiss? Even if "chocolate kiss" colored carpeting calls Hershey's to mind, is the descriptive use of chocolate kiss an infringement? Goaded by fears that the failure to take action will result in a diminution of rights, and driven to recover every shred of value from any reference to its mark, trademark owner's complain about every reference to their marks. The result is less colorful speech (literally), and an impairment of our ability to communicate.

Corresponding Suit / in Europe is Enough to / Bring D J Action

Arkema, Inc. v. Honeywell International, [2012-1308] (February 5, 2013) [DYK, Plager, O'Malley] the Federal Circuit reversed the refusal of the district court to allow Arkema to amend its declaratory judgment action to include two after-issued Honeywell patents, and remanded for further proceedings.
DISCUSSION: After being sued by Honeywell in Europe for infringement of a patent on a more environmentally friendly refrigerant, Arkema brought a declaratory judgement action challenging the validity and infringement of the corresponding U.S. patent. While this suit was pending, two additional U.S. patents issued on the use of the refrigerant. Arkema sought to amend its complaint to add these patents, but the district court found that as a mere supplier, Arkema was not currently or imminently in danger of facing liability for contributory or induced infringement on the patents on methods of using the refrigerant. The Federal Circuit said that Article III jurisdiction may be met where the patentee takes a position that puts the declaratory judgment plaintiff in the position of pursuing arguably illegal behavior or abandoning that which he claims a right to do. The Federal Circuit concluded that it was a "quintessential example of a situation in which declaratory relief is warranted." The Federal Circuit said that there do not have to be acts of direct infringement for declaratory judgment jurisdiction, nor do there have to be specific accusations against the potential direct infringers or their supplier. The Federal Circuit also noted that even under the iscarded "reasonable apprehension" test, accusations of infringement in related litigation were sufficient to confer jurisdiction, and thus the European litigation between the parties was a sufficient affirmative act by Honeywell establishing a case and controversy between the parties.

It is Presumed That / the Preferred Embodiment / is Coverd by Claims

Accent Packaging, Inc, v. Leggett & Platt, Inc., [2012-1011] (February 4, 2013) [Rader, PROST and Reyna] The Federal Circuit reversed summary judgment of non-infringement of U.S. Patent No. 7,373,877, remanding with instructions to enter summary judgment of infringement.
DISCUSSION: The asserted claims of the '877 patent related to a a wire tier that used to bale recyclables and other waste into bundles. The claim language at issue was:

said operator assembly including a pivotal shaft assembly and elongated operator bodies, with each of the operator bodies being operably coupled with a respective one of said gripper, knotter, citing element and cover so as to supply driving power form the single drive assembly thereto.

Leggett & Platt argued that the claim language required that each elongate operator bodies be operably coupled with one and only one of the listed elements of the device. Such a construction would not cover Legget & Platt's device, where its elongate operator bodies were each coupled to two elements. The problem for Leggett & Platt was that this construction also did not cover the single disclosed embodiment in the '877 patent. Noting that "a claim interpretation that excludes a preferred embodiment from the scope of the claim is rarely, if ever, correct". The Federal Circuit said that it was not persuaded that the claim language required a different construction. The Federal Circuit said that  the use of the indefinite article "a", which is generally open to one or more. Further the specification substantiates a construct that allows for an elongated operator element to be operatively coupled to one or more operator elements, noting that in the only disclosed embodiment two elongated operator bodies are each coupled to two distinct operator elements.

Fairness Applies to • Waiver, but do not Disclose Letters • from your Attorney

Kilpatrick Townsend & Stockton LLP v. LG Electronics, Inc., [2011-1626] (July 13, 2012) [CLEVENGER, Moore, Reyna] The Federal Circuit vacated contempt sanctions against the Kilpatrick law firm for failing to produce documents in response to a subpoena, finding that the District Court did not apply the proper analysis of privilege.

DISCUSSION: In an attempt to persuade LG that it owned Wi-Lan royalties, Wi-Lan sent LG a copy of a letter  Wi-Lan received from its outside counsel from the Townsend firm.  The letter did not persuade LG, so Wi-Lan sued LG for patent infringement, using the Kilpatrick firm.  LG took the position that by sharing the letter from Townsend, Wi-Lan waived privilege as too all firms, and subpoenaed documents from the Kilpatrick firm.

The Federal Circuit found that the applicability of attorney-client privilege where subject matter jurisdiction depends on a question of patent law is governed by federal common law, although questions about the handling of subpoenas were governed by the law of the regional circuit.  The Federal Circuit found that the Townsend letter was both privileged and confidential, and its disclosure was a waiver of privilege at least as to the letter.  The Federal Circuit said that modern law requires fairness balancing for certain varieties of privilege waiver.  FRE 502(a) required fairness in the scope of waiver in the contest of litigation, and the Federal  Circuit concluded that the Ninth Circuit would apply fairness in a pre-litigation context as well, and thus the district court erred when it failed to consider fairness.  The Federal Circuit declined to evaluate fairness in the first instance and remanded it for further proceedings,  The Federal Circuit vacated the contempt finding, but noted that the Kilpatrick firm failed to pursue it options to properly contest the subpoena.

BEST PRACTICES: In this case the marking of every page as confidential contributed to the finding that the documents were privileged.  Attorneys should be careful what they mark as "confidential" or "privileged".  Attorneys should also remind clients not to disclose their communications to third parties.  

"Hereby Assigns" in • an Employee Agreement • Transfers Invention

Preston v. Marathon Oil Company, [2011-1013, -1026] (July 10, 2010) [O'MALLEY, Bryson, Dyk] The Federal Circuit affirmed summary judgment that Preston assigned rights in U.S. Patent Nos. 6,959,764 and 7,207,385 by virtue of his employment agreement.

DISCUSSION: After accepting employment at will by Marathon, Preston signed an Employee Agreement pursuant to which he automatically assigned inventions he made.  He identified a CH4 Resonating Manifold as a "previous" invention.  The Federal Circuit certified the question of whether continued employment was adequate consideration for an intellectual property assignment, and the Wyoming Supreme Court answered; "yes."  The Federal Circuit rejected Preston's argument that the invention was not intellectual property under the agreement because it had already been conceived at the time of the agreement, and it rejected the argument that the invention was expressly reserved.  The Federal Circuit noted that construction of patent assignment agreements is a matter of state law.  Because the agreement required that the inventions "made or conceived" be assigned, unless the invention was both made and conceived prior to employment, the employee agreement applied.  The Federal Circuit further found that invention necessarily requires at least some definite understanding of what has been invented.  The evidence did not support the conclusion  that Preston was not in possession of an excludable invention before he began employment at Marathon.  The Federal Circuit agreed with the district court's finding that Preston's testimony regarding the level of development was not credible, and at most had little more than a vague idea before his employment began.

The Federal Circuit reversed the district courts' finding that Preston breached the employment agreement by not assigning the invention because the employee agreement to "hereby assign" automatically assigned rights to the invention without the need for any additional act.
BEST PRACTICE: One again, an employee agreements should always contain a current assignment of future inventions.

Considered or not • The Burden Never Changes • Clear and Convincing

Sciele Pharma Inc. v. Lupin Ltd., [2012-1228] (July 2, 2012)[MOORE, Lourie Proust] The Federal Circuit vacated a preliminary injunction against Lupin's launch of a generic version of Fortamet that Sciele alleged Lupin infringed U.S. Patent No. 6,866,866.
DISCUSSION: The '866 patent issued with claims that the Examiner found problematic, and the applicant cancelled.  The district court granted a preliminary injunction, which the Federal Circuit reversed and remanded because the district court didn't even consider obviousness.  On remand the district considered obviousness but since all of the art was considered by the USPTO found that Lupin had not overcome the deference due a qualified government agency presumed to have done its job.  Both parties argued that the burden of proving invalidity was changed by the facts of the case, and the Federal Circuit found that both parties were wrong, and that the burden of proof never changes.  The Federal Circuit noted that "clear and convincing evidence" already reflected the burden of overcoming the presumption of overcoming the deference that is due a qualified government agency presumed to have done its job.  The court said "whether a reference was previously considered by the PTO, the burden of proof is the same: clear and convincing evidence of invalidity.  There is no heightened burden when a reference has been previously considered, and no lessened burden when there is a reference that has not been considered.

No Recaputre if / Reissue Claim Narrower / Than Original

In re Youman and Morris, [2011-1136] (May 8, 2012) [PROST, Lourie Schall], the Federarl Circuit reversed the BPAI's affirmance of the rejection of claims in a reissue application, because the Board misapplied the recapture rule.
DISCUSSION:  During a broadening reissue of U.S. Patent No. 5,629,733 directed to an electronic television programming guide. In the original patent, the applicant had added language about cycling forward and backward through a plurality of alphanumeric characters to distinguish over the prior art, which allowed entry of characters from a keyboard.  In the reissue, the patentee sought to replace the "cycling" limitation with a "changing" limitation, which the Examiner found would violate the recapture rule.  The BPAI affirmed finding that a reissue claim can escape the recapture rule only through other materially narrowing limitations "if the narrowing limitation is directed to one or more ‘overlooked aspects’ of the invention," but concluded that the aspects in which the claim was narrower were not overlooked in the original prosecution.
The recapture rule limitation on reissue is based upon the fact that cancellation or amendment of the original claim in order to overcome prior art is a deliberate action that necessarily excludes the inadvertence or mistake contemplated by the statute’s error requirement. There is a three part test to determine whether reissue claims violate the recapture rule:

1. First determine whether and in what aspects the reissue claim is broader that the original claims.
2. Determine whether the broader aspects of the reissue claim relate to surrendered subject matter.
3. Determine whether surrendered subject matter has crept into the reissue claim.

The Federal Circuit found that the Board erred in its application of the third step, failing to distinguish between in-stances where an added limitation has been modified versus instances where an added limitation is eliminated in its entirety.   The Federal Circuit said that the cycling limitation has not been eliminated, rather it was broadened to changing.  The Federal Circuit said that such a broadening modification must be evaluated to determine if it materially narrows relative to the original claim such that surrendered subject matter is not entirely or substantially recaptured.
The Federal Circuit instructed that the starting point for this analysis is not the patented y measuring material narrowing relative to the original claim, which was deliberately surrendered during the original prosecution, we are ensuring that the patentee is unable to recapture what it surrendered deliberately, but allowing room for error, as required by the reissue statute."  Certainly one might err without deceptive intention in adding a particular limitation where a less specific limitation regarding the same feature would have been sufficient to render the claims patentable over prior art. Thus, the Federal Circuit said that the proper analysis is to determine whether the modified limitation was contained in the prior art relied on by the examiner in the original prosecution -- if it is, then the limitation is not materially narrowing.