IP/IT. McCARTER & ENGLISH, LLP ATTORNEYS AT LAW INSIDIOUS INFRINGEMENT: THE EVOLUTION OF ONLINE MISUSE OF TRADEMARKS BY SCOTT S.

Similar documents
ADDITIONAL DEVELOPMENTS TRADEMARK

RESCUECOM CORPORATION v. GOOGLE, INC. 456 F. Supp. 2d 393 (N.D.N.Y. 2006)

Changes to Information Disclosure Statement (IDS) Requirements Notice of Proposed Rulemaking (NPR)

Patent Prosecution Update

PATENT DISCLOSURE: Meeting Expectations in the USPTO

White Paper Report United States Patent Invalidity Study 2012

UNITED STATES DISTRICT COURT WESTERN DISTRICT OF TEXAS SAN ANTONIO DIVISION

Are the Board s Institution Decisions on 315 Eligibility for Inter Partes Review Appealable?

IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF TEXAS MARSHALL DIVISION

PA Advisors, LLC v. Google Inc. et al Doc. 479 Att. 2 EXHIBIT B. Dockets.Justia.com

Navigating through the Obviousness-Type Double Patenting Minefield Landslide Vol. 10, No. 3 January/February 2018

The ITC's Potential Role In Hatch-Waxman Litigation

SENATE PASSES PATENT REFORM BILL

Case 1:13-cv CMA Document 1 Entered on FLSD Docket 01/30/2013 Page 1 of 17

Experimental Use Exemption of Patent Infringement A Brief Comparison of China and the United States

United States. Edwards Wildman. Author Daniel Fiorello

Preemptive Use Of Post-Grant Review Vs. Inter Partes Review

UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF ILLINOIS EASTERN DIVISION ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) )

Supreme Court Invites Solicitor General s View on Safe Harbor of the Hatch-Waxman Act

Supreme Court of Florida

Case5:12-cv RMW Document41 Filed10/10/12 Page1 of 10

High-Tech Patent Issues

Strategic Use of Post-Grant Proceedings In Light of Patent Reform

June 29, 2011 Submitted by: Julie P. Samuels Staff Attorney Michael Barclay, Reg. No. 32,553 Fellow Electronic Frontier Foundation

United States District Court

Litigation Webinar Series. Hatch-Waxman 101. Chad Shear Principal, San Diego

Case 9:18-cv RLR Document 1 Entered on FLSD Docket 05/22/2018 Page 1 of 11 UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF FLORIDA CASE NO.

PATENT, TRADEMARK & COPYRIGHT!

TECHNOLOGY & BUSINESS LAW ADVISORS, LLC

L DATE FILED: ~-~-~ lll'f

GIBSON LOWRY BURRIS LLP

Intellectual Property: Efficiencies in Patent Post-Grant Proceedings

Should Patent Prosecution Bars Apply To Interference Counsel? 1. Charles L. Gholz 2. and. Parag Shekher 3

America Invents Act of 2011 Part 1: Impact on Litigation Strategy Part 2: Strategic Considerations of the FTF Transition

UNITED STATES DISTRICT COURT DISTRICT OF MINNESOTA

BUSINESS METHOD PATENTS IN THE UNITED STATES: A LEGISLATIVE RESPONSE

IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF TEXAS MARSHALL DIVISION

KIRKLAND & ELLIS LLP

THE ANTICYBERSQUATTING CONSUMER PROTECTION ACT-AN OFFENSIVE WEAPON FOR TRADEMARK HOLDERS

Injunctions, Compulsory Licenses, and Other Prospective Relief What the Future Holds for Litigants

The America Invents Act : What You Need to Know. September 28, 2011

UNITED STATES DISTRICT COURT WESTERN DISTRICT OF WASHINGTON AT SEATTLE. THIS MATTER comes before the Court on Defendants Motion for Judgment on the

Case 4:15-cv Y Document 1 Filed 03/15/15 Page 1 of 8 PageID 1 UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF TEXAS FORT WORTH DIVISION

Presented to The Ohio State Bar Association. May 23, 2012

Inequitable Conduct and the Duty to Disclose. Tonya Drake March 2, 2010

Case 1:13-cv LGS Document 20 Filed 06/26/13 Page 1 of 8. : Plaintiffs, : : : Defendants. :

April 30, Dear Acting Under Secretary Rea:

Case 1:16-cv GAO Document 1 Filed 07/29/16 Page 1 of 13 UNITED STATES DISTRICT COURT DISTRICT OF MASSACHUSETTS COMPLAINT AND JURY DEMAND PARTIES

IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF TEXAS MARSHALL DIVISION

How To ID Real Parties-In-Interest In Inter Partes Review

Case 2:14-cv JRG Document 68 Filed 12/12/14 Page 1 of 12 PageID #: 2010

Case 1:15-cv MAK Document 44 Filed 10/10/17 Page 1 of 13 PageID #: 366 IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF DELAWARE

John Fargo, Director Intellectual Property Staff, Civil Division Department of Justice.

PATENT REFORM. Did Patent Reform Level the Playing Field for Foreign Entities? 1 Leahy-Smith America Invents Act, Pub. L. No.

New Post Grant Proceedings: Basics by

2011 Foley & Lardner LLP Attorney Advertising Prior results do not guarantee a similar outcome Models used are not clients but may be representative

UNITED STATES DISTRICT COURT WESTERN DISTRICT OF WASHINGTON AT SEATTLE I. INTRODUCTION

No In the Supreme Court of the United States ETHICON ENDO-SURGERY, INC., COVIDIEN LP., et al.,

Best Practices Patent Prosecution and Accusations of Inequitable Conduct

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF NEW YORK

Case 1:14-cv RWZ Document 1 Filed 05/08/14 Page 1 of 19 IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MASSACHUSETTS

Patent Reform Act of 2007

Patent Enforcement Pre-Litigation Considerations

Case 1:15-cv ILG-SMG Document 204 Filed 12/05/18 Page 1 of 13 PageID #: : : Plaintiff, : : : : : INTRODUCTION

Correction of Patents

UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA INTRODUCTION

UNITED STATES DISTRICT COURT WESTERN DISTRICT OF WASHINGTON AT SEATTLE

Inter Partes Review (IPR): Lessons from the First Year Matthew I. Kreeger

2012 Winston & Strawn LLP

CARDSERVICE INTERNATIONAL, INC., Plaintiff, v. WEBSTER R. McGEE, and WRM & ASSOCIATES, d/b/a/ EMS - Card Service on the Caprock, Defendants.

The Scope and Ramifications of the New Post-Grant and Inter Partes Review Proceedings at the USPTO

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF WISCONSIN

SETTLEMENT & COEXISTENCE AGREEMENTS

February, 2010 Patent Reform Legislative Update 1

Life Science Patent Cases High Court May Review: Part 1

Policies of USPTO Director Kappos & U.S. Patent Law Reform

IP system and latest developments in China. Beijing Sanyou Intellectual Property Agency Ltd. June, 2015

3 James A. McDaniel (Bar No ) 9 UNITED STATES DISTRICT COURT

CBM Eligibility and Reviewability

Case 3:17-cv JCH Document 1 Filed 11/13/17 Page 1 of 12 IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF CONNECTICUT. Case No.

The Where, When And What Of DTSA Appeals: Part 2

Case: 2:17-cv MHW-KAJ Doc #: 1 Filed: 03/23/17 Page: 1 of 15 PAGEID #: 1

THE SAFE HARBOR PROVISION OF HATCH-WAXMAN IS THERE A HOLE IN THE SAFETY NET?

America Invents Act H.R (Became Law: September 16, 2011) Michael K. Mutter Birch, Stewart, Kolasch & Birch October 11-12, 2011

EXTENDING THE LIFE OF A PATENT IN THE UNITED STATES

United States Court of Appeals for the Federal Circuit

The 100-Day Program at the ITC

Case: 1:10-cv Document #: 290 Filed: 06/21/13 Page 1 of 10 PageID #:7591

CORRECTION OF ISSUED PATENTS

New Patent Application Rules Set to Take Effect November 1, 2007

Supreme Court of the United States

IN THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF NORTH CAROLINA ASHEVILLE DIVISION CIVIL ACTION NO.: 1:16-CV-381 ) ) ) ) ) ) ) ) )

IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF CONNECTICUT

IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF TEXAS MARSHALL DIVISION O R D E R

Post-EBay: Permanent Injunctions, Future Damages

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF MICHIGAN SOUTHERN DIVISION ) ) ) ) ) ) ) ) ) ) ) ) FIRST AMENDED COMPLAINT FOR PATENT AND TRADEMARK

REVISED APRIL 26, 2004 IN THE UNITED STATES COURT OF APPEALS FOR THE FIFTH CIRCUIT. No No TMI INC, Plaintiff-Appellee

Patent Reform State of Play

Case 2:12-cv TC Document 2 Filed 12/10/12 Page 1 of 16

IP Enforcement: Domestic and Foreign Litigants in the ITC and U.S. District Courts

Transcription:

ATTORNEYS AT LAW IP/IT INTELLECTUAL PROPERTY & TECHNOLOGY UPDATE VOLUME 3, ISSUE 1 IN THIS ISSUE: INSIDIOUS INFRINGEMENT: THE EVOLUTION OF ONLINE MISUSE OF TRADEMARKS BY SCOTT S. CHRISTIE PAGE 2 PROPOSED CHANGES TO INFORMATION DISCLOSURE STATEMENT REQUIREMENTS BY SANJIV M. CHOKSHI PAGE 3 PREVENTIVE MEDICINE FOR LICENSE AGREEMENTS BY WILLIAM A. ZUCKER PAGE 5 PATENT INFRINGEMENT AND THE UNFAIR IMPORTATION OF GOODS UNDER SECTION 337 BY PATRICK A. WALKER, III, Ph.D. PAGE 6

INSIDIOUS INFRINGEMENT: THE EVOLUTION OF ONLINE MISUSE OF TRADEMARKS BY SCOTT S. CHRISTIE Just as the Internet has provided a new forum for scammers to defraud the unsuspecting and new tools to accomplish their crimes, so too it has expanded the means and methods by which companies are victimized through infringement of their valuable trademarks. The ubiquity and perceived anonymity of the online realm has proven to be an irresistible lure to those disrespectful of the intellectual property of others. Indeed, as the online realm has grown in popularity as a medium of commerce, infringers have become more sophisticated in their approaches. The opening salvo by the online infringers was domain name infringement, registration and use of Internet domain names that incorporate a victim company s trade name or trademark. As companies were scrambling to establish websites to advertise, market, and later sell their goods and services, they were discovering that domain names incorporating key company trademarks were unavailable to be registered because they previously had been registered without authorization by a known or unknown third party. Sometimes the third party was a competitor; sometimes it was a customer or reseller; but most often, that third party was a domain name speculator. The goal of the interloper, of course, is to profit from the goodwill associated with the misappropriated trademark. The competitor seeks to market and sell its products or services through a website bearing the company name. The reseller hopes for a competitive advantage over other resellers because it is selling a product through a website containing the name of that product and/or its manufacturer. The speculator, in contrast, treats the domain names themselves as a commodity. The optimum outcome is to sell the offending domain name to the highest bidder, whether it be the trademark owner or not. While waiting for this payday, the infringer monetizes the domain names by parking them, using the names as web addresses for perfunctory websites, that are comprised of nothing more than links to other websites. These linked websites generally are owned by those in the same industry as the trademark owner. The owners of the linked websites agree to pay the unauthorized domain name registrant a small amount of money each time a third party clicks on the link associated with its website. Because domain name speculators often are parking thousands or tens of thousands of domain names at one time, this click-through revenue can be quite substantial. To the extent that others are benefiting economically from domain names incorporating corporate trademarks, the company is losing economically. Of no lesser importance is the lack of control over the content of the unauthorized websites, which can lead to dilution of and/or tarnishment to the relevant trademark and reputational harm to the company. It is not uncommon, for example, to have an unauthorized domain name incorporating a corporate trademark associated with a website devoted to criticism of the company, or a website that does not reflect the values and ideals of the company, instead containing pornography or promoting gambling. Furthermore, the unauthorized registration of these domain names by others prevents the company from registering and using them for its own marketing and public relations purposes. There is no question that domain name infringement violates the Lanham Act, the federal law governing trademarks. See 15 U.S.C. 1051-1127. Under the Lanham Act, when an infringer is found to have violated an owner s trademark rights, the court awards the owner not only its damages, but also the infringer s profits and the owner s costs of bringing the lawsuit. See id. 1117(a). In cases involving cyberpiracy, where the infringer has a bad faith intent to profit by using a domain name that is identical or confusingly similar to a distinctive mark, the owner of the mark may elect an award of statutory damages in the amount of not less than $1,000 and not more than $100,000 instead of actual damages and profits. See id. 1117(d) & 1125(d). However, if the ultimate goal is merely to wrest ownership of the domain name from the infringer, there is a binding arbitration procedure on the papers that is a quicker and more cost-effective approach to the problem. Metatag infringement poses unique challenges. The programming code of a website often contains text called metatag keywords. Internet search engines like Google and Yahoo! use metatag keywords to assist in identifying and ranking websites responsive to third-party search requests. When an individual conducts an online search using a search term incorporating a company trademark, websites that include the trademark as a metatag keyword will be included closer to the top of the list of search results. In this manner, a website owner can artificially boost the site s ranking in the search results relative to a particular trademark, thereby increasing the likelihood that the individual conducting the search will notice and access the website. There is not yet judicial unanimity that metatag infringement rises to the level of a violation of the Lanham Act, but the large majority of the courts to consider the issue has so found. These cases turn on whether the unauthorized use of trademarks as metatag keywords constitutes use in commerce... in connection with the sale... or advertising of any goods. See id. 1114(a)(1). The Lanham Act defines use in commerce as follows: A mark shall be deemed to be in use in commerce... on goods when... it is placed in any manner on the goods... and the goods are sold... in commerce, and... on services when it is used or displayed in the sale or advertising of services and the services are rendered in commerce. See id. 1127. Other than the Second Circuit, the circuit courts of appeal to consider this issue have concluded that unauthorized metatag keyword use of trademarks falls within the plain meaning of the statutory language as a trademark use in commerce. Compare North American Medical Corp. v. Axiom Worldwide, Inc., 522 F.3d 1211, 1220 (11th Cir. 2008); Australian Gold, Inc. v. Hatfield, 436 F.3d 1228, 1238 (10th Cir. 2006); Brookfield Communications, Inc. v. West Coast Entertainment Corp., 174 F.3d 1036, 1062 (9th Cir. 1999) with 1-800 Contacts, Inc. v. PAGE // 2

Whenu.com, Inc., 414 F.3d 400, 409 (2d. Cir. 2005). Courts within the Second Circuit cling to the view that there is no use in commerce because the trademark is not placed on any good or service, nor is it used in a manner that indicates the source or origin of the mark. In essence, because the trademark is employed behind the scenes in the programming code of the website and not communicated to the public, it is analogous to an individual s private thoughts about the trademark and, thus, there is no trademark use as required by the Lanham Act. See 1-800 Contacts, 414 F.3d at 409; see also Fragrancenet.com, Inc. v. FragranceX.com, Inc., 493 F.Supp.2d 545, 550 (E.D.N.Y. 2007). With such a stark circuit split on this issue, the matter is ripe for Supreme Court review, and the conventional wisdom is that the majority view will prevail. Sponsored-linking infringement is a variation on the same theme as metatag keyword infringement. Obtaining preferential placement of the infringer s website in the listed results of an online search is still the goal, but the method of achieving it is slightly different. Instead of triggering the favorable search results by hiding a trademark in the programming code of the website, the infringer purchases rights to the trademark from the search engines themselves so that its website appears as a sponsored result when the trademark is used as a search term by a third party. As such, the infringer s website achieves preferential placement on the first page of the search results, to the right of and/or above the regular list of search results. The sponsored result contains a headline of text that doubles as a link to the infringer s website, a line or two of advertising text, and the web address of the infringer s website. As with inclusion of trademarks as metatag keywords, the threshold inquiry is whether employing a trademark as a sponsored link search term constitutes a trademark use in commerce under the Lanham Act. While noting that sponsored linking to trademarks is not a traditional use in commerce, a number of courts have determined that this conduct can constitute a trademark use. See Boston Duck Tours, LP v. Super Duck Tours, LLC, 527 F.Supp.2d 205, 207 (D.Mass. 2007); Buying for the Home, LLC v. Humble Abode, LLC, 459 F.Supp.2d 310, 323 (D.N.J. 2006); 800-JR Cigar, Inc. v. Goto.com, Inc., 437 F.Supp.2d 273, 285 (D.N.J. 2006); Edina Realty, Inc. v. The MLSOnline.com, No. Civ. 04-4371JRTFLN, 2006 WL 737064, *3 (D. Minn., Mar. 20, 2006); Google, Inc. v. American Blind & Wallpaper Factory, Inc., No. C 03-05340 JF, 2005 WL 832398, *5 (N.D. Cal., Mar. 30, 2005); Gov t Employee Ins. Co. v. Google, Inc., 330 F.Supp.2d 700, 703 (E.D.Va. 2004). Courts within the Second Circuit have taken a more nuanced approach, distinguishing the sponsored-linking advertising method from the actual content of the sponsored-linking advertisement. These courts have held that the mere acquisition and use of a trademark as a sponsored-linking search term is not actionable under the Lanham Act. See Site Pro-1, Inc. v. Better Metal, LLC, 506 F.Supp.2d 123, 127 (E.D.N.Y. 2007); Rescuecom Corp. v. Google, Inc., 456 F.Supp.2d 393, 403 (N.D.N.Y. 2006); Merck & Co., Inc. v. Mediplan Health Consulting, Inc., 425 F.Supp.2d 402, 415 (S.D.N.Y. 2006). In other words, there can be no trademark use in commerce in the online context unless the alleged infringer displays to the consumer the trademark at issue as an indication of the trade- mark s source or origin. See id. However, the display requirement may be satisfied where the trademark is actually contained within the text of the sponsored-linking advertisement itself. See Hamzik v. Zale Corp., No. 306-CV-1300, 2007 WL 1174863, *3 (N.D.N.Y., Apr. 19, 2007). As the state of the law currently stands, the Lanham Act can serve as an effective means of thwarting metatag keyword infringement and sponsored-linking infringement, at least outside the Second Circuit. But online trademark infringement will continue to evolve as the features and functions of the Internet adapt and change. By the time the law governing metatag keywords and sponsored linking is well settled, online infringers will have expanded into the next infringement gray areas, continuing to push the envelope. To the extent that companies have not already done so, it is imperative that they pay attention to their online presence. They must focus on developing and maintaining a favorable and economically beneficial online corporate image which includes preventing others from capitalizing upon the goodwill associated with their trademarks. The burden of trademark ownership is eternal vigilance. PROPOSED CHANGES TO INFORMATION DISCLOSURE STATEMENT REQUIREMENTS BY SANJIV M. CHOKSHI The United States Patent and Trademark Office (USPTO) promulgated proposed rules that will impact the prosecution of U.S. patent applications. More particularly, the proposed rules overhaul the current procedures governing the submission of Information Disclosure Statements (IDS). All individuals associated with the filing and prosecution of a U.S. patent application have a duty to disclose all known information that is material to the patentability of an invention. Failure to comply with the duty of disclosure can result in a finding of inequitable conduct (which has been reinvigorated by recent Federal Circuit law) and a substantial risk that a patent obtained on the application will be declared invalid. An IDS is a document that is used to cite such information to the USPTO. The USPTO proposed the IDS rule changes on July 10, 2006, and the Office of Management and Budget approved these rule changes on December 10, 2007. The IDS rule changes are purported to encourage individuals to provide the USPTO with the most relevant information related to an invention at the very beginning of the examination process. The proposed IDS rule changes divide the prosecution of a patent application into four separate time periods. The proposed requirements for filing an IDS are different for each of the four time periods. In general, the requirements become more stringent throughout each of the four time periods. The proposed requirements for filing an IDS within each of the time periods are summarized below. INTELLECTUAL PROPERTY & TECHNOLOGY UPDATE PAGE // 3

I. The Four Time Periods and the Proposed Requirements for Filing an IDS within Each Time Period First Period. The first period ends the later of three months after filing the patent application or prior to the mailing of a first Office Action on the merits. In general, an IDS may be filed within this time period without compelling any additional disclosure requirements. However, an explanation would be required for: any document exceeding 25 pages; any non-english language document; and all documents in each IDS when more than 20 documents are cited. An explanation must include: an identification of the specific feature, showing, or teaching that caused a document to be cited, and the specific location where the feature, showing, or teaching may be found; and a correlation of the specific feature, showing, or teaching to corresponding specific claim language (e.g., the pump in figure 2, element 22 of prior art reference A correlates to the pump recited in claim 1 of the present application) or to a specific portion of the supporting specification when the document is cited for that purpose. Second Period. The second period begins after the first period and ends with the mailing of a Notice of Allowability or Notice of Allowance, or a Notice of Intent to Issue Reexamination Certificate (NIRC). In general, an IDS may be filed within this time period; however, an explanation and a non-cumulative description would be required for any documents submitted in an IDS during this time period. A non-cumulative description would require a description of how each document is not merely cumulative of any other document, such as a description of a specific feature, showing, or teaching in each cited document that is not found in any other citation in the current or any prior IDS, or in any information cited by the examiner. Third Period. The third period begins after the second period and ends with the payment of the issue fee. An IDS may be filed if accompanied by the following: a certification that each document in the IDS is being filed within three months of the date it (a) was first cited by any foreign patent office in a counterpart foreign application or (b) first became known to the applicant; and one of the patentability justifications, including an amendment, if necessary. A patentability justification would require either of the following: an explanation, a non-cumulative description, and reasons why the independent claims are patentable over the information in the IDS being submitted, considered together, and in view of any information already of record; or an explanation, a non-cumulative description, and reasons why an amendment causes claims, admitted to be unpatentable over the information in the IDS being submitted, to now be patentable over such information when considered together, and in view of any information already of record. Fourth Period. The fourth period begins after the payment of the issue fee or mailing of an NIRC, and ends when there is no longer sufficient time for the IDS to be considered by the examiner prior to issuance of the patent or Reexamination Certificate. An IDS may be filed if accompanied by the following: a certification that each document in the IDS is being filed within three months of the date it (a) was first cited by any foreign patent office in a counterpart foreign application or (b) first became known to the applicant; a petition to withdraw the application from issue; and an unequivocal statement that one or more claims are unpatentable in view of the cited information, an amendment to such unpatentable claims, and a patentability justification. II. Meaningful Submission and Updating Requirements Individuals are required to meaningfully comply with the additional disclosure requirements. The explanations and noncumulative descriptions must be significantly different for each document. Pro forma explanations and non-cumulative descriptions will not be accepted. If amendments affecting the scope of the claims are filed after submitting an IDS, any explanation of the references previously submitted must be reviewed and updated where necessary in view of the amendments, or a statement that no updating is unnecessary will be required. III. Practical Considerations It would typically be prudent to file an IDS during the first time period since the proposed rules for submitting an IDS generally become more stringent during the later periods. However, the time periods restart when a continuation, divisional, or continuation-in-part application is filed. Thus, it may be advisable in certain circumstances to file a continuation application and submit an IDS during the first time period rather than comply with the more stringent requirements of the later time periods. PAGE // 4

IV. Reexamination Proceedings The proposed changes discussed above would also apply to an IDS submitted during ex parte and inter partes reexamination proceedings. V. Safe Harbor The USPTO proposes creating a safe harbor to the duty to disclose Rule 56 for individuals complying with IDS requirements if they have acted in good faith, such as by making reasonable inquiry, and they have a reasonable basis for the statements they have made. However, please note that U.S. courts are not bound to the duty of disclosure standard established by the USPTO. Thus, the safe harbor might not serve as a complete defense to a charge of inequitable conduct. VI. Fee Requirements All fee requirements for IDS submissions are proposed to be deleted. VII. Duty to Review The USPTO points out that individuals are required to review information submitted in an IDS to assure that the submitted information will not either cause unnecessary delay or needlessly increase examination costs, or obscure material information. VIII. Conflict with Recent Case Law In McKesson Information Solution, Inc. v. Bridge Medical, Inc., 487 F.3d 897 (Fed. Cir. 2007), the Federal Circuit emphasized the breadth of the duty of disclosure requirement. Specifically, the Federal Circuit affirmed a finding of inequitable conduct when the patentee failed to fully disclose information to the USPTO during prosecution. Such information concerned copending related applications and associated Office Actions and Notices of Allowance. In an effort to satisfy the duty of disclosure requirements imposed by this Federal Circuit case, individuals will likely cite more than 20 references in an IDS when prosecuting applications having related applications corresponding thereto. Exceeding the 20-reference threshold will trigger the heightened disclosure requirements of the first period. Though the matter is presently on appeal, the U.S. District Court for the Eastern District of Virginia has voided the USPTO s proposed rule changes relating to the number of patent claims and continuation applications that could be filed. The court held that these rule changes were found to be substantive in nature, and the USPTO does not have the authority to issue substantive rules. If the proposed IDS rule changes are enacted, it is possible that an entity will argue that these IDS rule changes are substantive in nature, and then file a lawsuit against the USPTO in an effort to strike down these changes. PREVENTIVE MEDICINE FOR LICENSE AGREEMENTS BY WILLIAM A. ZUCKER You have entered into a license agreement with a modest royalty rate to prevent your competitor/licensee from challenging the validity of your patent. Seems like a smart practice. Or, you have not revisited your boilerplate license provisions in years and believe that your license protects you from having the licensee challenge the validity of the licensed technology. Wrong or right? Good business strategy or just another example of smart, smart, dumb? There is a 2007 Supreme Court decision that has altered standard licensing practice. The decision is MedIummune, Inc. v. Genetech, Inc., 127 S. Ct. 764 (2007), and the important business take away is that the Supreme Court ruled that a licensee can, while still a licensee, seek a determination that the underlying patent is invalid or not infringed by your competitor s product. What that means is that a licensee, without risk to its business, can enter into a license with you and then go and seek a declaratory judgment from a court that your patent is invalid or that its technology does not infringe your patent. The licensee thus has the best of both worlds. To avoid this, you should reexamine your standard license agreements. Various provisions can be inserted that would make it more risky for a licensee to raise such issues. For example, you should consider revising your licensing agreements across the board to: require a licensee to make the Hobbsian s choice of terminating the license before seeking declaratory relief; accept as a basis for the license facts that later would make it difficult to attack the patent; require alternative dispute resolution before seeking judicial intervention; insert a covenant not to seek declaratory relief regarding the licensed techn ology; or insert cost-shifting provisions in order to make the cost of seeking such a determination prohibitively expensive. Preventive medicine often prevents the illness in the first place. All it takes is a little extra effort to rethink provisions in your licensing agreement and insert changes that may pass as simple boilerplate. INTELLECTUAL PROPERTY & TECHNOLOGY UPDATE PAGE // 5

PATENT INFRINGEMENT AND THE UNFAIR IMPORTATION OF GOODS UNDER SECTION 337 BY PATRICK A. WALKER, III, Ph.D. The U.S. International Trade Commission (ITC) has become an attractive alternative to district court litigation for U.S. patent holders seeking to enforce their rights. Section 337 of the Tariff Act of 1930 is a primary remedy available for preventing the importation of infringing goods into the United States. The Court of Appeals for the Federal Circuit s (CAFC) decision in Amgen v. ITC and Roche addressed the application of the so-called Safe Harbor provision of 35 U.S.C. 271(e)(1) in a Section 337 proceeding. See Amgen v. ITC and Roche, 519 F.3d 1343 (Fed. Cir. 2008). Under Section 271(e)(1), infringement may typically not be found when the sole uses of the invention are reasonably related to the development and submission of information under a federal law that regulates the manufacture, use, or sale of drugs. The CAFC s decision to enforce the Safe Harbor provision should not discourage potential plaintiffs from utilizing Section 337 proceedings. Despite Amgen, the inherent advantages of these proceedings remain, and the narrow exception carved out by the Safe Harbor provision is likely not available to the majority of patent-eligible subject matter. Section 337 of the Tariff Act of 1930 was originally enacted to protect U.S. domestic industries from unfair competition in the importation into the United States of goods made by foreign companies. See, e.g.,19 U.S.C. 1337. Over the years, Section 337 has evolved into one of the primary means for companies to protect U.S. intellectual property rights in cases involving infringing imports. Section 337 proceedings provide a number of advantages over district court litigation. Primarily, these may include speed and cost, but they may also include jurisdictional considerations, the availability of effective equitable remedies, and competent claim construction. See Russell E. Levine, P.C., The Pro s and Con s of Patent Litigation Before the International Trade Commission, available at www.abanet.org/litigation/committees/intellectual/roundtabl es/1106_outline.pdf. In a typical Section 337 proceeding, the Commission s investigation, discovery, trial, and the administrative law judge s decision on the merits are typically completed in under 18 months. This is considerably shorter than typical district court litigation and often as fast or faster than the rocket dockets of the Eastern District of Texas, the Western District of Wisconsin, and the Eastern District of Virginia. This is primarily due to the shorter discovery time, and the fact that there is no jury option, there are no damages to litigate, and there is in rem jurisdiction. Initial up-front costs, however, are greater in ITC proceedings. The ITC requires that complaints alleging patent infringement include certified copies of the patent(s), patent assignment(s), and related file history. The ITC does exercise in rem jurisdiction over the accused imports, which allows for a single action to be brought against multiple respondents in different jurisdictions. Also, if an ITC exclusion order is obtained, the order bars the entry of infringing goods into the U.S. at the border. So, the U.S. patent holder is not solely responsible for ensuring that the infringer is complying with the ITC s exclusion order. Finally, district courts are reversed by the Federal Circuit with regard to the meaning of patent claims (i.e., claim construction) approximately 50% of the time, while ITC claim construction, on the other hand, has rarely been reversed by the Federal Circuit. One particular advantage of Section 337 proceedings is the unavailability of the 35 U.S.C. 271(g) defenses. Section 271(g) prohibits the importation of an article that was manufactured abroad by a process that infringes a valid U.S. patent. However, Section 271(g) also sets forth two defenses to an allegation of infringement. A product that is made by a patented process will not be considered to be made after it is materially changed by subsequent processes or it becomes a trivial and nonessential component of another product. In Kinik Company v. ITC and 3M, the CAFC affirmed that these defenses do not apply to ITC proceedings. See Kinik Company v. ITC and 3M, 362 F.3d 1359 (Fed. Cir. 2004). In March 2008, the CAFC decided the availability of another 271 defense, namely the Safe Harbor provision of 35 U.S.C. 271(e)(1). See Amgen, supra. Section 271(e)(1) states that [i]t shall not be an act of infringement to make, use, offer to sell, or sell within the United States or import into the United States a patented invention solely for uses reasonably related to the development and submission of information to the U.S. Food and Drug Administration (FDA). Id. Roche planned to import peg-epo (recombinant human erythropoietin) for testing in clinical trials and eventually seek FDA approval. In a Section 337 action, Amgen sought to enjoin Roche s importation, alleging that such imports violated up to six of Amgen s U.S. patents related to EPO technology. Roche argued that its actions are exempt under the Safe Harbor provision. The ITC sided with the accused infringer, Roche, finding that Roche was exempt from charges of infringement under the Safe Harbor provision. While some decisions have broadly interpreted various terms of the Safe Harbor provision, it is ultimately limited to those acts reasonably related to FDA approvable products. The Supreme Court in Merck v. Integra has held that the exemption is sufficiently broad to cover all uses of patented inventions, including the use of patented compounds in experiments that are not ultimately submitted to the FDA. See Merck v. Integra, 545 U.S. 193 (2005). Likewise, the Eli Lilly Court determined that patented invention in Section 271(e)(1) includes all inventions, not drug-related inventions alone. See Ely Lilly & Co. v. Metronic, Inc., 496 U.S. 661 (1990). As written, however, Section 271(e)(1) still appears to be generally limited to potentially infringing acts related to medical devices, drugs, and human biological products that are reasonably related to a potential FDA filing. The scope does not appear to embrace the related basic scientific research nor the vast remainder of eligible subject matter patentable under 35 U.S.C. 101. As such, for the majority of U.S. patents, the patent holder may seek to enforce its rights quickly and inexpensively through Section 337 proceedings before the ITC. PAGE // 6

McCarter & English, LLP is a firm of over 400 lawyers with offices in Boston, Hartford, New York, Newark, Philadelphia, Stamford and Wilmington. In continuous business for more than 160 years, we are among the oldest and largest law firms in America. Our stability, growth, and success reflect a culture in which, time and again, integrity, selflessness, hard work, and an understanding of our clients businesses and objectives have achieved powerful legal outcomes and real-world successes. We view our history, however, not as a source of self-satisfaction, but as a platform for continuous improvement, and we ve earned a reputation for constantly seeking innovative, efficient, and effective ways to attain our clients goals. We are honored to be the chosen law firm of clients ranging from Fortune 100 companies to middle-market and emerginggrowth companies to individual people. When our clients do great things, we are pleased to get the assist. PARTNERS William J. Heller Practice Group Leader 973.639.6973 wheller@mccarter.com Scott S. Christie 973.848.5388 schristie@mccarter.com Gary H. Fechter 212.609.6823 gfechter@mccarter.com John E. Flaherty 973.639.7903 jflaherty@mccarter.com Michael R. Friscia 973.639.8493 mfriscia@mccarter.com Mark D. Giarratana 860.275.6719 mgiarratana@mccarter.com Eric E. Grondahl 860.275.6704 egrondahl@mccarter.com John A. Kostrubanic 617.449.6587 jkostrubanic@mccarter.com Basil S. Krikelis 302.984.6393 bkrikelis@mccarter.com Basam E. Nabulsi 203.399.5920 bnabulsi@mccarter.com Robert W. Smith 973.639.2061 rsmith@mccarter.com William A. Zucker 617.449.6516 wzucker@mccarter.com ASSOCIATES Mark H. Anania 973.848.5302 manania@mccarter.com Kelly J. Garrone 973.639.6977 kgarrone@mccarter.com Steven E. Halpern 973.848.8623 shalpern@mccarter.com Irene M. Hurtado 973.848.5371 ihurtado@mccarter.com Scott Kaliko 973.639.7980 skaliko@mccarter.com David S. Kim 212.609.6819 dkim@mccarter.com Mark E. Nikolsky 973.639.6987 mnikolsky@mccarter.com Jonathan Short 973.848.5394 jshort@mccarter.com Lori J. Shyavitz 617.449.6561 lshyavitz@mccarter.com Alexandra B. Stevens 203.399.5930 astevens@mccarter.com Elizabeth M. Swift 860.275.6738 eswift@mccarter.com Paul F. Swift 973.848.5373 pswift@mccarter.com Richard J. Twilley 860.275.6705 rtwilley@mccarter.com Marc A. Vivenzio 860.275.6778 mvivenzio@mccarter.com Patrick A. Walker, III, Ph.D. 302.984.6358 pwalker@mccarter.com Copyright 2008, McCarter & English, LLP, all rights reserved. You may reprint sections of this material only with attribution and only after receiving written permission. The information contained in this publication is general in nature, is not intended to constitute legal advice and should not be acted upon absent professional guidance relevant to specific facts and circumstances. Aaron P. Bumgarner 203.399.5946 abumgarner@mccarter.com Bryan D. Zerhusen, Ph.D. 860.275.6735 bzerhusen@mccarter.com Robert J. Burger 973.622.4444 rburger@mccarter.com Sanjiv M. Chokshi 973.848.5368 schokshi@mccarter.com Gavin Cunningham 203.399.5928 gcunningham@mccarter.com INTELLECTUAL PROPERTY & TECHNOLOGY UPDATE PAGE // 7

BOSTON HARTFORD NEW YORK NEWARK PHILADELPHIA STAMFORD WILMINGTON www.mccarter.com