Newsletter - Volume 48, January 2010
Federal Circuit Court of Appeals Completely Removes "Point of Novelty" from Design Patent Analysis
In 2008, the Federal Circuit's decision in Egyptian Goddess, Inc. v. Swisa, Inc.
significantly altered the infringement analysis in design patent cases by
determining that the "ordinary observer test" was the sole test that should be
applied by the finder of fact. In reaching this decision, the "points of
novelty" test, which had previously been applied in conjunction with the
"ordinary observer" test, became a thing of the past. The "ordinary observer"
test is a plain comparison of the patented design with the accused design. The
"points of novelty" test focused on identifying the points of novelty in the
patented design and determining if the accused product appropriated those
points of novelty. The Egyptian Goddess decision did not mandate a similar
change in analysis of "anticipation" issues, i.e., all elements of the
applied-for design found in the prior art, during prosecution of design patent
applications or challenges to validity of issued design patents. In
International Seaway Trading Corp. v. Walgreens Corp. and Touchsport Footwear
USA, Inc., the Federal Circuit addressed the issues left open in Egyptian
Goddess.
At the heart of the Seaway dispute were the plaintiff's patents covering designs
for casual, lightweight footwear, typically referred to as "clogs." During
examination of the patents-in-suit, the patent examiner considered prior art
consisting of various models of Crocs clogs from the Crocs website and
determined the applied-for designs to be patentable over this prior art. In
February, 2008, Seaway filed a complaint alleging infringement of its design
patents by Walgreens and Touchsport, where Touchsport imported the accused
product and Walgreens sold the accused product in its stores. Walgreens and
Touchsport filed a motion for summary judgment of invalidity of the
patents-in-suit in view of the Crocs prior art, which was granted by the
district court upon application of the "ordinary observer" test. In granting
the summary judgment motion and finding that the patents-in-suit were
"anticipated" by the prior art, the district court compared the exterior
portions of the prior art clogs to the exterior of the patented designs, but
did not compare the insoles of the prior art clogs and the patented designs.
Seaway appealed the district court decision, contending that district court
failed to properly apply the "points of novelty" test to the invalidity
analysis and failed to properly consider both the interior and exterior design
elements of the prior art and patented clog designs.
After addressing the history of application of the "ordinary observer" and
"points of novelty" tests, the Seaway court continued its analysis by
recognizing the longstanding general rule that the same test be used in both
the infringement and anticipation contexts. This general rule is derived from
the Supreme Court's 120-year-old proclamation in the context of utility patents
"[t]hat which infringes, if later, would anticipate, if earlier." In light of
Supreme Court precedent, Federal Circuit precedent holding that the same tests
must be applied for infringement and anticipation, and the Egyptian Goddess
decision dismissing the "points of novelty" test from infringement
consideration, the Seaway court determined that the "ordinary observer" test
was the logical, sole test for anticipation analysis. Relying solely on the
"ordinary observer" test would prevent inconsistency from developing between
infringement and anticipation analyses and continues the established practice
of maintaining identical tests for infringement and anticipation.
In supporting its decision, the court noted the problems inherent in the "points
of novelty" test in the infringement context were present in the anticipation
context. The test was difficult to apply as it encouraged focus on minor
differences between the prior art reference and the patented design and created
the need to canvass the entire body of prior art to identify points of novelty.
Eliminating the "points of novelty" test for anticipation also "has the
advantage of avoiding the debate over the extent to which a combination of old
design features can serve as a point of novelty under the ‘points of novelty'
test."
In Seaway the Federal Circuit finished what it had started in Egyptian Goddess
by dismissing the "points of novelty" analysis from all design patent analysis.
The case was remanded to the district court for further consideration of the
interior design features of the prior art Crocs clogs as they compared with the
interiors of the patented designs.
Big Problem, Small Package: A Summary of the Opel/Autec Decision Regarding Use of an Auto Manufacturer's Trademark on Third-party Toy Cars
On January 14, 2010, the German Federal Supreme Court (Bundesgerichtshof) ruled
that Autec's toy cars did not infringe auto manufacturer Adam Opel GmbH's
trademark rights, despite the appearance of Opel's trademark on Autec's toy
car's grill.
The claimant, Adam Opel GmbH (Opel), a German automobile company which is now a
wholly-owned subsidiary of General Motors, was the proprietor of the device
mark referred to as the "Opel-Blitz" (pictured below) which covered both motor
vehicles and toys.
AUTEC AG (Autec), a German toy-car company, produces and manufactures toy cars
under the trademark CARTRONIC. Autec had allegedly produced and distributed
miniature toy copies of Opel's Astra V8 Coupé (pictured below) all of which
featured the Opel-Blitz mark on the miniature's grill.
Both Opel's automobile and Autec's toy car miniature displayed the Opel-Blitz
mark in the same location on the respective car and toy.
Opel objected to Autec's manufacture and distribution of the Opel Astra V8 Coupé
miniature, based on its existing trademark rights in the Opel-Blitz mark which
covered both motor vehicles and toys, fearing confusion would arise among
consumers.
Before ruling on the matter, the court of first instance, the Regional Court
Nürnberg-Fürth, requested a preliminary ruling from the European Court of
Justice (ECJ) on the matter. In decision C-48/05, the ECJ ruled that "affixing
by a third party of a sign identical to a trade mark registered for toys to
scale models of vehicles cannot be prohibited under Article (5)(1)(a) of the
directive unless it affects or is liable to affect the functions of that trade
mark." The ECJ also determined that it was the responsibility of the Regional
Court Nürnberg-Fürth to determine how the average consumer of toys in Germany
would respond to the issue. Namely, would this average consumer view the logo
affixed to the toy model car's grill and assume that the toy was either 1)
manufactured by Opel, or 2) that Opel and Autec were linked economically by
license or other legal design? The Regional Court Nürnberg-Fürth in its May
2007 decision concluded, "No," holding that the average consumer would believe
the logo featured on the toy car was simply part of the model, and thus would
not assume that this logo signified a link between the toy car company and the
automobile company and car upon which the model was based.
In its January 14, 2010 decision, the Bundesgerichtshof affirmed the Regional
Court's ruling denying that the Opel-Blitz trademark had been infringed. Even
though Bundesgerichtshof noted that the Defendant had affixed an identical
mark, Opel's logo, on identical goods, namely, toys, this particular use did
not rise to trademark infringement.
The Bundesgerichtshof reasoned that the use did not affect the main function of
the logo, namely, to indicate the "trade origin" of the goods (toy cars). The
use also failed to garner a negative consumer reaction, as the German toy
consumer would only understand the display of Opel's logo on the toy car as an
attempt to mirror the original Astra V8 in miniature version as much as
possible. The consumer would not see the logo and assume that the toy car was
manufactured by Opel.
Finally, Autec's use of the logo on its model Astra V8 toys did not rise to
infringement of a mark with a reputation, as the use did not have detrimental
effect on the reputation acquired under Opel's mark for motor vehicles. Thus,
the Bundesgerichtshof dismissed the case, denying any trademark infringement
relief to Opel.
A comment on the ECJ's initial ruling at the outset of the matter with respect
to Article 5(1)(a) of the Trade marks Directive: The ECJ's decision is
consistent with earlier case law which notes that infringement exists under
Article 5(1)(a) only when the use by a third party harms a function of the
trade mark, the guarantee of origin function being the most prominent of
functions. The ECJ also appears to have widened this exception, insisting that
the public must see a commercial link between plaintiff and defendant. Thus,
the ECJ may have introduced, albeit indirectly, a "risk of confusion element"
under Article 5(1)(a) of the Directive. Additional discussion on this point may
be viewed at
http://jiplp.oxfordjournals.org/cgi/content/abstract/3/8/507.
Come and Get It! Extra PTA Days, Courtesy of the Federal Circuit
Patent holders Wyeth and Elan Pharma successfully challenged the USPTO's method
for calculating patent term adjustments (PTAs) this month, adding about 8-9
months each to the terms of 2 patents covering treatments for Alzheimer's
disease. Wyeth and Elan Pharma International Limited v. Kappos, No. 2009-1120
(Fed. Cir. 2010).
The Federal Circuit held that USPTO rules applied 35 U.S.C. §154(b) "overlap"
provisions too broadly. Under 35 U.S.C. §154(b)(1) and (2), a patent term may
be extended by the number of days lost due to (i) USPTO delays during
prosecution, or (ii) prosecution occurring more than 3 years after filing.
However, where only one day was lost, a patentee cannot recoup two days, even
if the lost day falls under ("overlaps") both criteria. The decade-old USPTO
rules started the "overlap" clock 3 years too early, said the Federal Circuit,
resulting in calculations according fewer PTA days than allowed under 35 U.S.C.
§154(b).
We expect that the term of many issued patents will be extended as a result of
this ruling. The USPTO has advised that it is changing its method for
calculating PTAs and that it will issue guidance for expediting recalculation
requests in the near future.
Undue Pressure or Undue Blame – Foreign Countries React to the Prospects of US-like Copyright Legislation
Reports surfaced this month taking a somewhat accusatory tone against the United
States and its alleged tactics for getting other countries to enact copyright
legislation similar to its own. Tico Times, a leading weekly paper in Costa
Rica reported on January 15, 2010 that the United States is delaying market
access to Costa Rican sugar producers until the country's legislators approve
the 14th Amendment to the Central America Free Trade Agreement ("CAFTA"), which
covers copyright law.
Initially, Costa Rica was the only signatory that did not ratify CAFTA due to
strong opposition in the country from various groups, including farmers,
students, and trade unions. The legislation was partially pushed through in
October 2007, with the section covering several provisions related to
intellectual property, Amendment 14, left out and never officially signed into
law. Similar to other TRIPS-plus agreements, the provisions go beyond what is
required under International agreements. For example, the Agreement requires
that member countries develop a uniform domain name dispute resolution policy
to assist in settling domain disputes, provide copyright protection for the
life of the author plus 70 years, enact provisions on anti-circumvention, under
which member countries must prohibit tampering with technology used to protect
copyrighted works, and provide for civil and criminal liability.
The country originally faced a December 31, 2009 deadline to approve the
controversial portion, but discussions have been delayed, sources cite, due to
the Costa Rica's extensive government process and political disagreement.
Sources in Costa Rica note that there are currently 121 motions related to the
law that need approval. For each motion, there must be a vote in the Commission
and up to 45 minutes of debate on the floor of the assembly must be allowed.
Moreover, Costa Rica is currently in the middle of a presidential election and
Parliament is unlikely to convene before its completion.
Adding to the administrative barriers is the lack of support for the provisions
within the region. Costa Rican papers are reporting that the prospect of the
copyright provisions being passed is setting off protests by students who are
concerned about the effect of proposed changes on their education by way of
altering current study and research practices. Health officials in the region
are also expressing disdain for the proposed provisions, claiming that they
will "bankrupt the public health system" by making it impossible to develop
generic low-cost versions of pharmaceuticals without being in contravention of
the trademark and patent provisions in the Act.
Currently, a reported 11,880 metric tons of sugar which were ready for export to
the United States are on hold, unable to be sold. While this plays well into a
powerful-country-threatens-small-lesser-developed-country story, the US Embassy
has denied that failure to enact copyright reform is a cause for the delay.
Rather, the US indicated that the delay is simply a matter of the fact that the
country has already met its allocated sugar export quotas, which were set back
in September. The quotas are designed to protect local producers, and to allow
countries to export a specified quantity of a product to the US at a low
tariff, while subjecting all imports above the pre-determined threshold to a
higher tariff.
Costa Rica isn't the only region which the US is accused of bullying into
copyright reform. The United States has also received some heat from the
Bahamas. According to local reports, the country recently proposed IP
enforcement reforms after alleged pressure from the United States Trade
Representative, who was reported to have accused the Bahamas of being "lax" in
enforcing intellectual property laws. The Chamber of Commerce President has
since taken steps to strengthen the country's enforcement regime, but has also
placed some of the blame back on the US, arguing that 90-95% of the counterfeit
products sold in the Bahamas come from the United States.
WIPO to Discuss Protection of Pharmaceutical Test Data
On February 8, 2010, the World Intellectual Property Organization is holding a
Symposium on test data protection in Geneva.
Under Article 39.3 of the WTO TRIPS Agreement, undisclosed test data submitted
to gain marketing approval for a new drug is generally considered to be
protected information. The US FDA and other nations' drug regulatory bodies
keep such data secret for several years. However, generic pharmaceutical
companies would like access to such data as early as possible, to facilitate
generic drug entry into the marketplace.
The WIPO Symposium is meant to provide a forum for further discussion of this
unique form of intellectual property protection.
Disclaimer: The contents of this newsletter are presented for information purpose only, and as such are not intended to constitute legal advice and should not be construed as such or acted upon without seeking advice of legal counsel. This information is not intended to and shall not create an attorney-client relationship of any kind or nature with IpHorgan Ltd. Please contact the firm with queries, concerns or for further details regarding the information presented herein. The entire contents are current only as of the date of the newsletter and are not to be interpreted as the opinions of our clients past, present, pending or future. (c)2010, IpHorgan Ltd. All Rights Reserved.
Newsletter Volume 55, August 2010
