IP Update, August 2009 - Part 2

Patent Unobvious If Examiner Fails to Articulate

Factual Basis for Rejection

Massachusetts Attorney's Lien Statute Applies

to Patent Prosecution Costs

".com" Does Not Convert a Generic Term

into a Brand Name

Similarity of Marks Should Be Determined by Marks

as Encountered in the Marketplace

A Champagne Toast to Reversal of Laches

Decision

European Court of Justice Delivers Judgment on the

Meaning of "Unfair Advantage"

Parallel Imports in China Are Forbidden for Goods

Without 3C Approval

"Objectionable Material" Under CDA Means

More than Just Porn

Copyright Registrations Can Be Invalidated Based

on Intentional Misrepresentations of Originality

Four Factor Test when Use of Information Is

Business Tort

Trade Secret Plaintiff Loses Customers to

Defendant but Is Not Entitled to Damages

Patent Unobvious If Examiner Fails to

Articulate Factual Basis for Rejection

By Aamer S. Ahmed

The U.S. Patent and Trademark Office Board of Patent Appeals and

Interferences (Board) recently reversed a final rejection in the

reexamination of Competitive Technologies, Inc's. U.S. Patent

No. 4,940,658, for which the U.S. Supreme Court previously granted

and subsequently dismissed certiorari over a spirited

dissent by Justice Breyer. The Board found the rejection of claims

lacked a sufficient factual basis to support the conclusion of

obviousness. Ex parte Competitive Technologies, Inc.,

Appeal No. 09/5519 (B.P.A.I., July 30, 2009) (Spiegel, APJ).

Illustrative claim 13 of the patent was directed to "a

method for detecting a deficiency of cobalamin or folate in

warm-blooded animals comprising the steps of: assaying a body fluid

for an elevated level of total homocysteine; and correlating an

elevated level of total homocysteine in said body fluid with a

deficiency of cobalamin or folate." The '658 patent was

licensed to Metabolite, which in turn sublicensed the patent to

LabCorp. LabCorp originally performed total homocysteine assays

under the sublicense, but later switched to an assay developed by

Abbott Laboratories and discontinued royalty payments to

Metabolite. In response, Metabolite sued LabCorp for

infringement.

In requesting certiorari, LabCorp asserted that the

'658 patent was invalid under 35 U.S.C. §101 because it

was attempting to patent a natural phenomenon. This came after a

decision from the Federal Circuit rejecting LabCorp's appeal

alleging that claim 13 was invalid under §§ 112, 102 and

103.

In his dissent from the decision to dismiss certiorari,

Justice Breyer contended that claim 13 was invalid no matter how

narrowly the natural phenomenon doctrine is interpreted. In his

view, there could be little doubt that the correlation between

homocysteine and vitamin deficiency set forth in claim 13 was a

"natural phenomena," citing respondent's brief for

the assertion that the correlation recited in claim 13 is an

observable aspect of biochemistry in at least some human

populations.

Reversing the examiner's rejection of claim 13, the Board

explained that the dispositive issue was whether the applied prior

art teaches, or would have suggested, all of the claim limitations

to one of ordinary skill in the art. The Board found that,

according to the '658 patent, both cobalamin (vitamin

B12) and folate deficiencies result in an elevated

homocysteine level, but an elevated homocysteine level cannot

distinguish between a folate and/or cobalamin deficiency. The

primary reference was found to disclose a method to determine total

homocysteine, but the three secondary references were not found to

fairly teach or suggest a correlation between elevated total

homocysteine levels and a folate deficiency, as recited in claim

13.

Basing its decision solely on the issue of obviousness under

§ 103(a) and not addressing whether or not the subject matter

of claim 13 was patent eligible (per Justice Breyer's dissent),

the Board held that the examiner failed to provide a sufficient

factual basis for her conclusion that the applied prior art teaches

or suggests all of the claim limitations.

Massachusetts Attorney's Lien Statute

Applies to Patent Prosecution Costs

By Leigh J. Martinson

The Supreme Judicial Court of Massachusetts determined, in a

case of first impression, that Massachusetts's attorney's

lien statute permits placing a lien on a patent (and any proceeds

later derived from that patent) for legal fees earned while

representing a client before the U.S. Patent and Trademark Office

(USPTO). Ropes & Gray LLP v. Jalbert, Case No.

SJC-10333 (Mass. S.J.C., July 28, 2009) (Spina, J.)

R&G represented Engage, Inc. (Engage) from approximately

June 2002 through May 2003 in connection with the prosecution of

various patents. On June 19, 2003, Engage filed bankruptcy

petitions under Chapter 11 in Massachusetts. In a filing with the

Bankruptcy Court, R&G asserted that it was owed over $100,000

for patent prosecution work, secured by an attorney's lien

under Massachusetts law. Engage sold off its patents and

applications before and after filing under Chapter 11.

In the bankruptcy proceedings, Engage's liquidating

supervisor, Jalbert, contended that the attorney's lien did not

apply to patents and that the debt owed to R&G was therefore

unsecured. After the bankruptcy court agreed, R&G appealed

first to the U.S. District Court, which affirmed the bankruptcy

court, and then to the U.S. Court of Appeals for the First Circuit,

which decided to certify the following two questions to the Supreme

Judicial Court of Massachusetts for its interpretation of

Massachusetts law on two issues:

1. Does the statute grant a lien on patents and patent

applications to a Massachusetts attorney for patent prosecution

work performed on behalf of a client?

2. If the statute does grant a lien and the issued patents or

patent applications are sold, does the attorney's lien attach

to the proceeds of the sale?

In answering yes to both questions, the Supreme Judicial Court

of Massachusetts emphasized that the attorney's lien protects

attorneys "against the knavery of their clients, by disabling

the clients from receiving the fruits of recoveries without paying

for the valuable services by which the recoveries were

obtained." Further, the Court stated that "[t]he purpose

of the lien statute would be eviscerated if an inventor could just

sell a valuable property right, one that was obtained by the

attorney's work in the first instance, and pocket the

proceeds." In the end, the Court announced that "[a]

patent attorney who successfully secures a patent for his client in

proceedings before the USPTO is entitled to the same protection

under [the statute] as an attorney who obtains a favorable judgment

for his client in court."

Practice Note: Although the issue had never

been raised in Massachusetts, two other states— New York

and Minnesota—had previously held that the lien applies

to patent prosecution.

".com" Does Not Convert a

Generic Term into a Brand Name

By Tiffany M. Scurry

The U.S. Court of Appeals for the Federal Circuit recently

affirmed a decision by the Trademark Trial and Appeal Board,

refusing registration of the mark "hotels.com" because it

is generic. In re Hotels.com, Case No. 2008-1429 (Fed.

Cir., July 23, 2009) (Newman, J.).

Hotels.com originally applied to register a service mark,

"hotels.com," for the service of providing information,

specifically, "providing information for others about

temporary lodging; travel agency services, namely, making

reservations and bookings for temporary lodging for others by means

of telephone and the global computer network." During

prosecution, applicant argued that its mark was registrable, and

not descriptive, because the company is in the business of

providing information, not providing hotel services.

The trademark examiner disagreed and denied registration on the

basis that "hotels.com" is merely descriptive of hotel

reservation services. Hotels.com appealed the rejection, but the

examiner's decision was affirmed. The Board found that the word

"hotels" identified "the central focus of the

information and reservation services" provided on the

Hotels.com website and consequently held that the term

"hotels.com, consisting of nothing more than a term that names

that central focus of the services, is generic for the services

themselves." Moreover, the Board found that the addition of

".com" to a mark "did not impart registrability to a

generic term." Hotels.com appealed.

At the Federal Circuit, Hotels.com argued that its mark was not

generic because its website does not provide lodging and meals for

its users, i.e., it is not a hotel. It argued that,

therefore, the mark, is not synonymous with the word

"hotel." Instead, Hotels.com argued, its

"hotels.com" mark is associated with the company itself,

and is not publicly viewed as a generic term or a common name for

hotel services.

The Federal Circuit, after noting that although generic terms

cannot be registered as trademarks but that descriptive terms can

acquire distinctiveness and become trademarked, concluded that

adding ".com" to a mark is not a method by which a

descriptive term can become distinctive. The Court further noted

that the addition of ".com" to the mark did not render a

new meaning to the term "hotels."

Thus, the Court affirmed the Board and concluded that the term

"hotels.com" has the same meaning as the word

"hotels" by itself and that the term is descriptive of

the company's services: providing information and reservation

services for hotels.

Similarity of Marks Should Be Determined

by Marks as Encountered in the Marketplace

By Sara E. Coury

The U.S. Court of Appeals for the Fifth Circuit reversed a

district court's grant of summary to defendant Xtended Beauty,

Inc. (Xtended) on plaintiffs Xtreme Lashes, LLC (Xtreme)

infringement claims, explaining that the district court's focus

on visual, side-by-side comparison of the features of the two marks

("Xtreme Lashes" and "Xtended Beauty") was not

the correct way to judge similarity. The Fifth Circuit also...