The popular UGG® branded sheepskin boots are at the heart of a dispute in the Northern District of Illinois. Deckers Outdoor Corp. (“Deckers”) owns 29 federal registrations for the trademark UGG in connection with numerous goods and services, including footwear, clothing, wallets, passport covers, plush toys and retail store services. The company also has four pending applications for UGG to add to this family of UGG trademarks.

Deckers sued Australian Leather Pty. Ltd. and its owner (“Australian Leather”) for trademark infringement and patent infringement for selling “ugg” boots.

UGG® branded boots have become very popular. Fashion forward celebrities, such as Blake Lively and Sarah Jessica Parker, are often pictured wearing the comfortable boots as they go about their daily lives. This provides the brand with free publicity and even more exposure.

Defendant Australian Leather alleged that the ugg mark was generic for sheepskin boots and that the doctrine of foreign-equivalents supported this conclusion. The parties brought cross motions for summary judgment on these issues and others.

Steve Baird has written about trademark genericide before on DuetsBlog. Generic trademarks are those where a brand name has become synonymous with a general class of product or service. Famous examples include: aspirin (Bayer lost this valuable mark), elevator and linoleum. Losing a trademark to genericide allows competitors to benefit from the originating company’s goodwill without being guilty of trademark infringement. Companies have undertaken advertising campaigns to prevent or combat their trademarks from becoming generic. For example, the Velcro Companies came up with the hilarious video, “Don’t Say Velcro,” explaining that the product is a “hook and loop” with the brand name VELCRO®. The company even came up with a sequel video called “Thank You For Your Feedback” that Steve Baird wrote about previously on DuetsBlog.

Luckily for Deckers, the Illinois Court found that its UGG® trademark was not generic. Deckers introduced a survey undertaken in 2017 in the United States of 600 women between the ages of 16 and 54 wherein 98% of the respondents viewed UGG® as a brand name. These results were even better than past surveys commissioned by Deckers in 2004 where 58% of the respondents viewed the mark as a brand, and in 2011 where 89% of respondents viewed UGG® as a brand name.

In turn, Australian Leather asserted that “ugg” was generic among American surfers in the 1970s. The Court found this group to be too narrow. Australian Leather also introduced evidence of “ugg” being generic for sheepskin boots in Australia. Not surprisingly, the Court did not find this evidence to win the day. The Court noted that genericness in another country could be at least relevant to consumer perceptions in the United States. However, it is important to remember that whether a trademark is generic in another country has little bearing on whether it is generic in the United States. Trademark rights are territorial. Having a registered trademark in the United States does not give a company rights in that mark in Australia or other countries.

The Court explained that the foreign-equivalents doctrine did not warrant another result. It explained that “the doctrine is not a perfect fit for English to English [terms, rather, the doctrine] is generally used to analyze non-English terms used in the American marketplace.” Steve Baird did a nice job of explaining the appropriate use of this doctrine in his post, here.

What genericide stories have you heard about?  It can be an ongoing and costly battle for brand owners to protect their valuable intellectual property rights.

— Jessica Gutierrez Alm, Attorney

trolls

We’ve spent time discussing the patent troll phenomenon in the past.  Patent trolls are less pejoratively referred to as non-practicing entities, because they do not make or use the inventions covered by their patents.  Instead, these non-practicing entities operate by purchasing patents on various technologies, accusing companies of infringing those patents, and demanding the companies pay licensing fees.  Faced with the threat of patent litigation, many companies—both large and small—will choose to simply pay the troll’s demand.  The infringement allegations might be thin, and the asserted patent might be invalid.  But the potential cost of litigation gives the patent troll great leverage over the companies they target.  Paying the demanded licensing fee is far more cost-effective than defending an infringement suit.

One company, however, is taking a different approach to what it views as a patent troll.  Cloudflare is an Internet security company and content delivery network.  Cloudflare is facing a patent infringement suit filed by patent owner, Blackbird Technologies.  The Complaint alleges Cloudflare is infringing the ‘335 patent, related to incorporating third-party data into existing Internet connections.  Cloudflare has vowed to fight the litigation, arguing both non-infringement and invalidity of the ‘335 patent.  To help in its efforts, Cloudflare is taking the creative approach of crowdsourcing its defense.   In a recent blog post, Cloudflare’s CEO offered up $20,000, to be divided among individuals who submit relevant prior art to invalidate the ‘335 patent.  In addition, and in an apparent effort to stop Blackbird from asserting any other patents against anyone, Cloudflare is offering another $30,000 for prior art submissions that invalidate Blackbird’s other 37 patents and patent applications.

Blackbird Technologies is . . . a law firm?  Blackbird’s website seems to offer legal services with “top law firm experience.”  But Blackbird is the plaintiff in the suit against Cloudflare.  Based on an assignment recorded with the U.S. Patent and Trademark Office, Blackbird purchased the ‘335 patent from the inventor in October 2016 for $1, and shortly thereafter initiated an infringement action against Cloudflare.  Blackbird is not merely representing a client, but instead appears to be stepping into the client’s shoes by purchasing the asserted patent and bringing suit as the plaintiff.

A little research reveals that this is a regular practice for Blackbird.  Blackbird owns at least 38 patents and published patent applications covering a broad range of technical fields.  Since September 2014, the firm has been named as the plaintiff in 109 federal patent infringement cases (107 in the District of Delaware, and 2 in the Central District of California).  The defendants in many of these cases were large corporations—Amazon, Wal-Mart, Petco, Uber, Lululemon, Target, and Netflix.

So, is Blackbird a patent troll?  Blackbird says its business model helps individual inventors and small companies by providing them with a low-cost solution to monetize their patents.  Blackbird also states that it is different from other companies labeled non-practicing entities, because Blackbird is “ready to litigate cases,” and is not merely looking “to settle cases quickly.”  Though it appears that most, if not all, of Blackbird’s suits have settled.

Cloudflare, however, views Blackbird as a pure patent troll, which led to Cloudflare’s crowdsourced effort to invalidate any and all of Blackbird’s patents.  Cloudflare’s CEO even went as far as a recent scathing blog post about the suit, accusing Blackbird of violating legal ethics rules.

Usually, infringement allegations asserted by non-practicing entities are quietly settled (see Blackbird’s 108 other cases filed since 2014).  Cloudflare’s approach to the infringement claims will be expensive, but also public.  Cloudflare’s response seems to include rallying its supporters and customers in publicly calling out Blackbird.  Cloudflare even invites supporters to “tell Blackbird Technologies what you think of their business practices” on Twitter.  It’s clear Blackbird has struck a nerve with this defendant.

— Jessica Gutierrez Alm, Attorney

Have you ever seen an ad for something and thought to yourself, “Hey, I had that idea years ago!” Some people take that thought a step further. One Florida man claims to have invented the iPhone in 1992, and is suing Apple to the tune of over $10 billion.

Thomas Ross filed a patent application for an “Electronic Reading Device” having a backlit LCD screen in 1992. Below are some images from Ross’s original filing, as presented in his Complaint against Apple.

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The application was ultimately abandoned in 1995 for failure to pay required fees. Ross therefore does not hold a patent on his invention. A patent application alone, without a resulting issued patent, does not itself grant any actionable rights. Even if Apple did copy the disclosed design in Ross’s patent application, he would not have a cause of action for patent infringement based on his abandoned application.

Since Ross cannot sue for patent infringement, he instead appears to hang his case entirely on copyright infringement. In 2014, Ross registered the drawings and text from his abandoned patent application for copyright protection. Importantly, copyright protection attaches to a work when it is initially “fixed” or written. Therefore, any copyright rights that Ross holds in the drawings and text originated when he initially wrote them in 1992.

However, copyright and patent are two very different animals. Copyright protects creative works, such as literary, musical, dramatic, pictoral, graphic, and sculptural works. Copyright protection is not available for ideas, facts, or utilitarian aspects of an item. Ross’s copyright rights cannot protect the workings of an iPhone-like device itself. Copyright is not a substitute for a failure to obtain patent protection.

While Ross may have a valid copyright in the shape and other creative physical aspects of his Electronic Reading Device, an allegation of copyright infringement requires proof of actual copying.   That is, a plaintiff must show that the defendant actually copied the plaintiff’s copyrighted work, which may be shown by access to the plaintiff’s work and similarity between the works. This is required because copyright law does not protect against independent creation. If two people separately create the same glass vase or write the same poem, entirely independent of one another, they may both hold a copyright for the work. Ross does not appear to provide any evidence toward proving that Apple actually copied his works.

Based on the facts presented in Ross’s Complaint, he is unlikely to succeed in the copyright allegations.  The text of Ross’s 1992 patent application reveals what was likely an innovative design. He describes the device “greatly improve[ing] ready access to reading material without the traditional inconvenience of bulk associated with accessibility of large amounts of printed text, and bundled in a light, compact and easily portable device that would additionally function as a note-book (optionally), calendar, clock, timer, calculator, factsimile [sic] devices, cellular phone, [and] message handler.” Surely an innovative concept in 1992. Unfortunately, an idea itself, no matter how revolutionary, is not protectable intellectual property. Ross’s failure to obtain patent protection for his invention has led to a lack of enforceable rights.

 

— Jessica Gutierrez Alm, Attorney

Fantasy Live Role Playing Characters, Hardenstein 2014

Live Action Role Playing (LARP or LARPing) usually involves Renaissance Festival worthy costumes, foam medieval weapons, and an intense dedication to not breaking character.  I can’t say I’ve ever had the privilege of participating in a LARP event, but I also can’t say I’d turn down the opportunity.

A different kind of battle—the intellectual property kind—is being fought over the sale of some foam LARPing arrows.  Jordan Gwyther, a church pastor who sells LARPing equipment on the side, is being sued by the proverbial Goliath, Global Archery Products, Inc.  Jordan Gwyther owns LARPing.org and UpshotArrows.com, both of which offer foam tipped arrows for sale to LARPing enthusiasts.  Gwyther doesn’t manufacture the arrows; he imports and sells them.  Global Archery initially sued for patent infringement, trademark infringement, false advertising, and unfair competition.

The patent infringement claims relate to Global Archery’s two U.S. utility patents, each entitled “Non-Lethal Arrow.” The patents were granted in 2013 and 2015.

Here are some images from Global Archery’s patents:

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The scope of a utility patent, however, is defined by it numbered “claims.”  Claim 1 of one of the patents, for example, is directed to:

A non-lethal arrow, comprising:

a shaft; and

a foam tip assembly connected with an end of the shaft, wherein said foam tip assembly comprises a tip connector having a foam tip overmolded to at least a portion of the tip connector such that said foam tip is securely attached to said tip connector.

And here are some of Gwyther’s arrows accused of infringing the Global Archery patents:

IDV-03005_1_IDV-02002

At least upon first glance, there are surely some similarities here.

Gwyther responded to the lawsuit by launching a GoFundMe page with this video, asking the LARP community for help.  In the video, Gwyther claims that if Global Archery succeeds in its lawsuit against him, they will likely succeed in suing other foam arrow distributors and effectively end LARP archery in the U.S.

Global Archery motioned the court for a temporary restraining order and preliminary injunction to remove the video, stating the video led to “hateful phone calls, emails, and [social media] posts.”  Global Archery’s efforts at a so-called “gag order” did not sit well with the LARP community or the more general online community.  As a result, tech company Newegg joined in the fight, calling Global Archery a patent troll, and offering $10,000 and the proceeds from some anti-patent troll t-shirts to Gwyther’s cause.

Newegg_Anti_Troll_Shirt
Newegg states, “Proceeds from the sale of this shirt will be used to support Mr. Gwyther’s legal defense fund.”

But is Global Archery really a patent troll?  There are a few ways to define a patent troll.  Usually, the term is used to refer to a non-practicing entity—a company that owns patents for the purpose of collecting license fees and/or settlement money.  Non-practicing entities do not actually make, use, or sell the things their patents cover.  That definition does not seem to apply to Global Archery, however, since it is a company directly involved in various forms of archery, even if it does not market directly to the LARP community.  Other times, “patent troll” is used to refer to a patent holder using its patents to assert overly broad and even baseless claims against others in order to collect settlement checks.  This definition, too, seems inapplicable given the apparent similarities between the patent claim language and Gwyther’s arrows.  Perhaps a more broad definition of a patent troll is simply a large company that enforces its patent rights against smaller companies?

Patent troll or not, the patent claims were recently dropped.  Gwyther cited a German patent, predating Global Archery’s patents, as invalidating prior art.  Here are a couple images from the German prior art patent:

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After reviewing the German patent, Global Archery voluntarily dismissed the patent infringement claims against Gwyther.  According to the online file histories, neither of Global Archery’s two patents received much push back from the U.S. Patent Office prior to allowance.  Apparently, Global Archery decided it would be safer to drop the patent infringement claims against Gwyther than be forced to defend the novelty and non-obviousness of its patents.

Invalidity is a frequent offensive strategy to combat patent infringement claims, and Gwyther did well to bring in the German patent.  Gwyther won the battle, it seems, but the war rages on.  It will take something stronger than foam arrows to defeat the remaining trademark, false advertising, and unfair competition claims asserted in the suit.

Sri Sankaran, Patent Attorney, Winthrop & Weinstine

Recent developments in executive, legislative, and judicial branches present new challenges for patent trolls (or less pejoratively “non-practicing entities” or “assertion entities”).

The White House recently outlined a series of initiatives to address the impact that patent assertion entities have on the economy.  The administration cited a report from the National Economic Council and the Council of Economic Advisers, entitled Patent Assertion and U.S. Innovation.  The report states that patent assertion entities bring 62% of all infringement suits and took in $29 billion in 2011 alone. Patent assertion entities are described in the report as not playing a role in the U.S. “invention ecosystem,” and instead focus on aggressive litigation tactics such as threatening to sue thousands of companies at once without specific evidence of infringement of any of them.  The report suggests that patent assertion entities have a negative impact on innovation and economic growth that far outweighs any benefit to the assertion entities themselves.  Pointing to a study of 14 publicly traded patent assertion entities from 2001 to 2012, the report contends that during that period the assertion entities had revenues of $7.6 billion, while during the same period patent infringement lawsuits they initiated were associated with an $87.6 billion dollar decline in the share price of the defendant companies.

The Obama administration has proposed a number of legislative and executive steps to address the economic impact of this type of litigation.  The proposed steps include: laws requiring disclosure of the real party of interest behind efforts to enforcing patents; giving courts more flexibility in awarding attorney’s fees to the prevailing party; restricting infringement actions against consumers or companies that buy a product off-the-shelf and put it to its intended use; and limiting the circumstances in which the International Trade Commission can ban imports of infringing products. The White House proposals join other initiatives already percolating in Congress.

A key issue underlying any effort in this area is whether the new rules will apply just to “trolls” and, if so, exactly how a troll is defined.  Universities, for example, may own patents but not manufacture and sell patented products.  The same could be true for individual inventors.  If production of patented products is to be the benchmark, how much production is necessary to turn a “troll” into a member in good standing of the “innovation ecosystem.”  Similarly, if the International Trade Commission’s (“ITC”) exclusion remedies are to be limited, is that limitation only for “troll” cases?  What is the justification for such a limitation when a party seeking relief in the ITC must first prove, as part of its claim, that there is a domestic industry in patented products.

Apart from these federal developments, at least one state government has also weighed in.  Spurred by a desire to facilitate “the efficient and prompt resolution of patent infringement claims,” build the local economy, and attract small and medium size internet companies to the area, Vermont recently enacted a statute prohibiting bad faith assertion of patent infringement.  The statute, 9 V.S.A. §§ 4195-99, provides that violators can be sued by the state attorney general or by the targets of the bad faith assertion.  The statute provides for equitable relief, damages, costs, and attorney’s fees.  In addition, the court can award as exemplary damages, the greater of $50,000 or three times the actual damages, costs, and attorney’s fees.

Continue Reading New Challenges for So-Called “Patent Trolls”

Jason Voiovich, Director of Corporate Marketing, Logic PD

Bottom Line: It won’t be long before cheap and ubiquitous 3D printing technology will present design patent owners with a choice: Seize the opportunity to license their designs to be created (and modified) at home, or resist patent infringement and litigate millions of potential offenders.  My advice?  Resistance is futile.

Our kitchen knives suck.

It’s not that they’ve always sucked, but you can’t expect a 10-year old set of KitchenAid private label knives to hold up to hundreds of dishwasher cycles without the love and attention of a sharpening stone.  Lesson learned.  It was finally time to visit Williams Sonoma for a set of big boy knives from Wusthof (along with a lesson in proper knife care).  $550 later we have a set of knives capable of trimming flank steak for Korean barbecue without trimming in a bit of Jason along with it.

Let’s go on a brief journey into the not-to-distant future for a different sort of experience.

It’s 2016.  I still head off to Williams Sonoma to try out the knives, but I don’t leave with them.  Instead, I purchase the digital 3-Dimensional artwork file for each knife I want in my collection along with the file for a customized countertop storage block.  On my way home, I stop at Target for a refill on the resins and raw materials I’ll need for my at-home 3-Dimensional printer.  (Last week, Target ran a special on a popular printer model for $99.  I couldn’t resist.)  Looking at the material prices, I fume a bit.  Just like 2012, they get you on the inputs.  Then, it was ink.  Now, it’s resin.

At home, I upload the design files to my printer and make a few “adjustments”.  My wife has entered a “pink” phase and would love all of the knife handles to match the new oven knobs we printed earlier in the day.  Grudgingly, I select the appropriate Pantone® pink for the handles and hit “print”.  It takes about 90 minutes to print all of the knives and the storage block.  The knives are a hit with the misses, but the block color doesn’t match.  No matter.  Our new printer can recycle the material, recolor it, and reprint it in the space of 15 minutes.

Sound far-fetched?

It isn’t.  This new world will be here faster than you might think.

In the early 2000s, I had the opportunity to do some marketing work for a local firm that was doing something amazing.  Prior to that time, if you wanted a 3-D printer, it cost $250,000 and filled a small room.  It used an “additive” process of laying down successive layers of melted plastic resin to “build” solid models.  It was complex, smelly, and reasonably difficult to use.  The parts didn’t hold up well, and they looked pretty bad, but it was a great way for industrial designers to get a feel for a design before expensive tooling was created.

This company created the same thing (I would say a better thing) for $25,000.

The result was startling.  Instead of Fortune 1000 buyers and specialist prototype houses, lots of companies could afford one.  Just like the big guys, they could prototype their designs quickly and successfully.  The printer was an obvious success.

Fast forward to 2012.  I just ordered a new 3-D printer for R&D projects.  And no, I didn’t need a purchase requisition.  It wasn’t even a big decision, really.  It fit comfortably on a credit card.  It was the $2,000 MakerBot Replicator 2.  And it’s very, very easy to use.

You may have heard about it in “Time” magazine , or if you’re a bit techy, on “Wired”.

A lot of folks are convinced these things will change the world.  Count me among them.  Sure, not just yet.  $2,500 is a bit much for the average home.  What’s more, the software to create “things” isn’t very easy to use by the average person, and the parts you get out of it don’t match the quality and finish of mass-produced items.  All true.  But both my kids took middle school classes on product design and 3-D rendering in the Mounds View School District.  Yeah.  Middle school.  To them, designing “things” is as natural as writing papers or taking photos.  To them, it’s just software.  To them, the quality of the parts will get better.

Consider the next order of magnitude in price reduction.  What if you could buy a 3-D printer for $250.  Would you?  I’ll bet you would.

This gets me to the point of this little trip into the future for all of us in the business of creating and protecting intellectual property.

What if I can scan that knife I wanted to buy at my friend’s house and print a copy of it at home?  What about printing a replacement for a cracked cabinet door handle?  What about upgrading the review mirror in my car?  What does that mean for the owners of the intellectual property – the design patents – whose designs I am copying?  Is it fair use?  But what if I sell my printed copy?  Or just give it away?  Am I infringing?  What if the design fails and the part breaks?  Can I sue?  Can they sue me?

Frankly, today, there are more questions than answers.  But if the recording and film industries have taught us anything, it is that resisting this transition is futile at best, destructive at worst.

The futuristic example I shared earlier illustrates a different path forward.  Instead of resisting change, embrace it.  Instead of selling physical items, why not sell the electronic files to replicate the item at home?  Why not allow people to make minor adjustments (like the color of the knife handle) to suit their tastes?  I’ll bet people would pay more for the privilege.  Would they pay as much as they would for the finished item today?  No.  But then again, Williams Sonoma in my example didn’t need to carry inventory that might not sell.  Wusthof didn’t need to ship it, insure it, package it, or fabricate it.  Those things cost money, and by nature of economies of scale, limit customer choice.

There is a better way, but it will take creativity from the legal community to structure licenses in such a way to allow whole new business models to emerge.  It’s offensive versus defensive.  It’s protection through openness.  It’s different.  Scary.  And very, very cool.

But it’s coming.  It makes sense to be ready.

–Susan Perera, Attorney

The tech industry has opined on the conflict between 3D printing and intellectual property for a few years, and the debate may be heating up.

3D printers allow a user to create and “print” a 3-dimensional object through the use of a digital file and a “printer” that dispenses material in successive layers to create a specific shape.  In the past few years there has been a significant amount of growth in the field of 3D printers, which are now reasonably affordable for personal purchase and use.  For example, MakerBot sells a 3D printer for under $2,000 that can extrude plastic into just about any shape imaginable.

Want to see how it works?  There are multiple videos on YouTube and I can think of at least a few people who would find this mini-manufacturing machine to be an addictively interesting gift.  But what about the IP concerns?

As discussed by Steve Wildstrom last week at Tech.pinions, this method of copying could usher in intellectual property concerns.  Just as video recording did for film, or the copying concern over digital music files, 3D printers may open the door to the infringement of the  intellectual property rights of others.

In additional to possible copyright claims, 3D printers could infringe the protected functionality or design of a product by allowing an individual to make an item that is protected by a utility or design patent.  Websites allowing parties to share digital files for use with 3D printers could also be subject to a claim of indirect infringement for providing the digital files that allow others to make the infringing product.  Further, trademark infringement concerns could also be implicated as 3d printers may allow users to copy the visual impression of a product that could be protected by trade dress or a product configuration trademark.

So what are people making with these 3D printers? Everything from spare parts, to toys, to iPhone cases.  See Dylan Love’s article at Business Insider, for some other examples of what can be made.  As 3D printers become more affordable and consumer use increases, it is quite possible that the IP issues surrounding these little machines will come to the forefront.

Just yesterday, Mike Masnick at TechDirt had an interesting post about the release of a printing kit that allows users to create universal adapter bricks for toy construction kits (basically allowing multiple brands of building toys to now be used together, including K’Nex, Lincoln Logs, Lego’s, and TinkerToys, to name a few) and the IP issues that may be involved.

Based on this, I’ll be keeping an eye out for other developments in the 3D printing field.