Intellectual Property

FILE PATENTS NOW, Sell Later – The On-Sale Bar is Alive and Kicking!

Posted by on Jul 11, 2018 in Intellectual Property

As you have probably heard us say more than once, you need to file a patent application BEFORE you sell or offer to sell your invention. Under the America Invents Act (“AIA”), if you sell or offer to sell your invention before filing a patent application, you are not entitled to patent rights in the United States. This rule of law is commonly referred to as the “on-sale bar.” A 2017 Supreme Court decision affirmed the broad scope and drastic consequences of the “on-sale bar.” In Helsinn v. Teva, the Court considered four patents relating to a drug that helps reduce the side effects of chemotherapy. Two years prior to filing any patent applications, Helsinn agreed to supply a company with the subject matter of the patents. This sale was announced in a joint press release and in SEC filings, but the exact details of the invention were not disclosed to the public. After Helsinn sued Teva for infringement of various claims of those patents, Teva argued that the patents were invalid because of the prior sale. The Supreme Court agreed and found that the press release barred patentability, despite the fact that it did not disclose the details of the invention. The Helsinn decision stands as a not-so-gentle reminder that any sale or any offer to sell an invention prior to filing a patent application is a disqualifier, even if the sale or offer to sell does not disclose the details of the invention. Bottom-line – Do not sell or offer to sell your invention before you file a patent...

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USPTO No Longer Refuses “Disparaging” Trademarks

Posted by on Jun 29, 2018 in Intellectual Property

You’ve probably heard about the trademark dispute between a group of Native Americans and the Washington Redskins. For years the validity of certain Redskins’ trademark registrations has been challenged under a federal law that prevents the registration of disparaging trademarks. In 2014, six of the Washington Redskin’s trademark registrations were cancelled by the U.S. Patent and Trademark Office (USPTO). Then came The Slants, a band of Asian musicians. The band applied to register its name as a trademark. The trademark application was refused by the USPTO for being disparaging to Asians, and the band sued to appeal the decision of the USPTO. According to the band, they chose their name to “reclaim the term and drain its denigrating force as a derogatory term for Asian persons.” They also argued that the federal law preventing the registration of disparaging trademarks violated its First Amendment freedom of speech. The U.S. Supreme Court agreed and held that the law was unconstitutional. Since the decision in favor of The Slants, the Redskins’ six previously-cancelled registrations have been revived. Bottom-line – The USPTO will no longer solely refuse a trademark registration on the basis that it is...

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Patent Rights Are Exhausted After Invention Is Sold

Posted by on Jun 14, 2018 in Intellectual Property

How far do patent rights go? Well, it often comes down to the sale of the invention. Typically, a patent holder’s patent rights in an invention extend only until the invention is sold – this is known as patent exhaustion. After a first sale, the patent rights in the invention sold are exhausted, and the purchaser is not bound by them[1]. The law, however, was unclear as to whether a patent holder could extend patent rights beyond the first sale by imposing restrictions on the subsequent use or sale of the invention by a purchaser. For two decades, lower courts held that certain restrictions could be used to retain some patent rights after the invention was sold. For example, some courts have permitted patent holders to restrict the resale or re-use of a patented invention. In 2017, the Supreme Court clarified the scope of the Exhaustion doctrine in Impression v. Lexmark. Lexmark, a toner cartridge manufacturer, sold toner cartridges at a lower price if the buyer agreed to a restriction on resale. Meanwhile remanufacturers were gathering up toner cartridges and refilling and reselling them. Impression Products, Inc., a remanufacturer operating in the US and abroad, was purchasing cartridges that had been bought with the resale restriction. So naturally, Lexmark brought suit against Impression for patent infringement. The Supreme Court held that when a patent owner sells an item, that product is no longer within the limits of the patent rights’ monopoly and instead becomes the private individual property of the purchaser. They based this decision on a common principle that sellers should not be able to impose “restraints on alienation.” Purchasers should be able to buy goods without fear that the goods are burdened by “a legal cloud on title.” Without this level of protection, purchasers would have to research all of the goods they intend to purchase to discover any burdens that patent holders may have placed on the goods. Consequently, the Court ruled that Lexmark could not impose a resale restriction on its cartridges that would allow them to sue a subsequent purchaser for patent infringement. The Impression Court determined that the Exhaustion doctrine applies to both domestic and foreign sales of patented inventions. Some have expressed concern that the foreign application of the doctrine will adversely impact the U.S. market for certain goods, such as life-saving pharmaceuticals, which are sold to foreign nations at discounted prices. Now it is possible for foreign purchasers to resell the discounted goods back into the U.S. market at a still-discounted price relative to the U.S. price while also earning a profit. Alternatively, the application of the doctrine to foreign sales may result in price increases for goods sold abroad. [1] Provided however, that the lawful owner of the patented device may maintain and repair the device, but may not reconstruct it. Bottom-line – A patent holder has no patent rights in a patented invention after the invention is sold. If you have questions about patents or other IP matters, please contact...

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Reaping Innovative Rewards With a Well-Sown NDA

Posted by on Apr 19, 2018 in Intellectual Property

Whether you are a recently forged startup or rapidly growing business venture, you likely have a strategy, technique, procedure, trade secret, or some other confidential information you hold dear to your success. The uniqueness of your innovation certainly is worthy of protecting as you work to cultivate and fertilize it with the expectation of ultimately reaping its rewards at harvest time. At some point in the lifecycle of virtually any business, however, the time will come when you want or need to share your confidential information with another party. Whether it be a customer, supplier, or consultant, chances are one or more strategic alignments with others will be deemed beneficial in order for your innovation to reach its full potential. For example, have you ever wondered about how to prevent a departing employee from poaching key design or development ideas, or how to prohibit a third party service provider from sharing your original concepts with a competitor? Confidentiality Agreements or Non-Disclosure Agreements (collectively, “NDAs”) permit you to exchange confidential information with others underneath the protection of legally binding contractual obligations that have appropriately identified your “secret recipe” and prohibited the receiving party from disclosing that information to anyone other than persons you authorize. NDAs may impose mutual restrictions on you and one or more other parties, or they can unilaterally proscribe one or more parties from disseminating your confidential information in a manner that does not comply with the NDA. While many NDA forms express similar concepts and attempt to offer the same protections, keep in mind that variations in fact and circumstance should influence how the NDA is tailored to your specific situation. Fundamentally though, any well-drafted NDA should at a minimum seek to address: The business purpose of the agreement The definition of the confidential information being shared The exclusions from this definition of confidential information The nondisclosure obligations of the receiving party The use and access restrictions of the receiving party The remedies of the disclosing party in the event of a breach The return or destruction of confidential information The non-solicitation of employees of one or both parties One startup-specific qualification should be noted here. If you are looking for potential investors in your business, careful thought should be given as to whether it makes sense to require them to sign NDAs before pitching your business. While a certain amount of due diligence is no doubt appropriate to vet investors and ensure your ideas are not stolen, practically, many investors will simply be unwilling to sign such a document. And, it would be a shame for you to expend significant time and resources to produce an NDA that is unusable. Bottom-line Every business has tangible and intangible assets to protect, and a well-drafted NDA may just be the crucial legal document your business needs to solidify the safety of what’s yours. *This blog post is brought to you by Jed...

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Intellectual Property Law Series: Common Trademark Pitfalls Even the Pros Make

Posted by on Dec 4, 2017 in Intellectual Property

We’ve all heard of trademarks. But, what exactly do they do? And how do you select your trademarks, protect them, and then properly use them in commerce? As we discussed in the previous article, trademarks identify original sources for products and services and ideally help distinguish one source’s goods and services from another source’s goods and services. Trademarks can come in a variety of forms, including logos, taglines, product or service names, colors, scents, etc. As many of you already know, selecting a trademark is not always an easy task. And, properly using your trademark in commerce requires diligence. Avoiding the mistakes below can help you protect your trademarks, wallet, brand, and reputation. 7 Tips to Avoid Common Trademark Pitfalls: 1. Select a distinctive mark. In order for you to distinguish your goods and services from others, your trademark must be distinctive, i.e. not confusingly similar to another’s mark for similar goods or services. If your trademark confuses consumers as to the source of origin of your goods or services, you run the risk of losing your mark and even a lawsuit for infringement. So, make sure your mark is distinctive before you begin to use it in commerce. Trademarks can be: Arbitrary (Apple for computers, Kodak for cameras) or Suggestive (Microsoft for microprocessor software)   However, trademark protection is not afforded to marks that are: Descriptive (Smartphone for smart phones) or Generic (Escalator, Realtor, Dumpster) 2. Conduct a search to see if any others are using your mark or something confusingly similar. Even if your mark is not identical to another’s mark, you could still be at risk. We recommend searching through online search engines like Google and reviewing the U.S. Patent and Trademark Office (“USPTO”) database records. Not all trademarks are registered with the USPTO, but you still need to be cautious of using marks similar to others that already exist. Run the search before registering your trademark or using it in commerce. Example of Confusingly Similar Names but Vastly Different Products 3. Register your mark with the USPTO. Trademark registration gives you the exclusive right to use your mark in all 50 states for the covered goods/services, except for prior users. The registration process can be started based on the intent to use the mark in commerce, even if you haven’t used it yet. After five years of continued use in commerce, a registered mark can become incontestable, meaning that others cannot contest the validity of your mark. 4. Properly mark your trademark. Remember this difference: a common law trademark (a mark that is not registered with the USPTO) is marked with ™, and a mark that is registered with the USPTO is marked with ®. Use the ™ symbol before you file your trademark application with the USPTO and during the pendency of the federal trademark application. Upon receiving a federal registration, switch the ™ symbols to ® symbols. 5. Use your trademark as a proper adjective. The proper adjective describes the generic name of goods or services to which it applies. For example, we stocked up on Q-tips® cotton swabs and Little Debbie® snack cakes. Incorrect: Little Debbie® represents a third of the snack cake market. Correct: Little Debbie® snack cakes represent a third of the snack cake market. The risk of using your mark as a noun instead of an adjective is total loss of your trademark rights. If your mark is used as a noun and becomes a generic term for the goods or services with which it is used, you will lose your exclusive rights to the term and your competitors will be able to...

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Intellectual Property Law Series: Do Trademarks Matter? Yes.

Posted by on Nov 9, 2017 in Intellectual Property

Companies have many assets to protect, such as cash, equipment, inventory, furniture, etc. But, one asset that is often overlooked is intellectual property (IP), such as trademarks, patents, copyrights, and trade secrets. In today’s global economy, it is critical for business owners, executives, inventors, authors, and marketing professionals to identify their IP, take the steps necessary to protect it, and enforce their rights when appropriate. Our team presents this first article of a series that will provide you important reminders and tips for protecting your IP. This first one specifically covers IP assets protected under trademark principles, including the following: Trademarks – identify goods or products Service marks – identify service provided for the benefit of another Trade dress – identifies packaging and product configurations Trade names – identify names under which businesses operate A trademark identifies which person or company is the original source of a product or service and distinguishes it from those made or provided by competitors. Trademarks can take the form of names (Gillette®), brands (Johnson & Johnson’s “Band Aid®”), designs and symbols (Starbuck’s twin-tailed mermaid logo), and slogans (Walmart’s “Save Money. Live Better.”). A service mark identifies a service provided for the benefit of another, such as Unum insurance. Trademarks consisting of color, sound, packaging, and scents are commonly referred to as trade dress like the shape of a Coca-Cola glass bottle and the colors of 7-Eleven’s logo. A trade name is the name under which businesses operate and is usually different from their legal name. When managing your IP, the first step is to always identify your assets. The second step is to protect them. And, not protecting your IP could result in the loss of money (lawsuits, license fees, and settlements), time (fighting to protect your rights), credibility, and even your brand or company identity. The following articles in this series will address mistakes to avoid when managing your trademarks and copyrights. If you have questions about identifying, protecting, or enforcing your IP, please contact us. Interested in learning more about Paul and the Chambliss IP practice? Click to watch Paul’s video in our “UNLEASHED” video...

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