US
PTAB ‘almost always wrong’ on Fintiv trial dates: research
The US Patent Trial and Appeal Board’s (PTAB) dependence on trial dates to help it determine whether to apply the controversial NHK-Fintiv rule to inter partes review (IPR) petitions is flawed, according to research.
Established under former US Patent and Trademark Office (USPTO) director Andrei Iancu, the rule stemmed from NHK Spring v Intri-Plex (2018) in which the PTAB held that the existence of a parallel district court lawsuit should preclude an IPR.
Since May 2020, the PTAB has relied on the six scenarios outlined in Apple v Fintiv, including the trial date in a parallel litigation case, to justify the dismissal of a review petition.
But law firm Perkins Coie released findings on October 29 that revealed that its reasoning is often derived from inaccurate data as the trial dates are “almost always pushed back”.
For its study, the firm carried out a survey of all discretionary denials that were based on parallel litigation and issued between May and October 2020.
In a blog post, firm partners Andrew Dufresne, Nathan Kelley and Lori Gordon noted that: “Key among the factors guiding those Fintiv denials is whether and to what extent the other proceeding’s trial date is scheduled to precede the board’s deadline for issuing a final written decision.”
“Trial dates in patent litigation are not stable and make a very poor barometer for evaluating the potential efficiency of denying institutions based on a parallel proceeding.”
Andrew Dufresne, Nathan Kelley, & Lori Gordon, Perkins Coie
‘Remarkably inaccurate’
The firm’s research found that “the board was almost always wrong when predicting trial dates in parallel litigation” and that out of 55 discretionary denials, only seven cited a trial date that proved accurate.
Notably, in four of those, the cited date was correct because the trial had already occurred when the board denied the institution. However, when the board evaluated future trial dates, it was wrong 94% of the time.
The firm's research noted that out of the 51 cases where the board relied on a predicted future trial date, only three occurred on time.
Elsewhere, five trials were delayed by between one and three months, 17 were delayed by between three and six months, three were delayed by six and 12 months, and seven are still pending.
Another 15 litigations were terminated by the board without any ruling on validity on the grounds of settlement, bankruptcy, and summary judgment on other issues.
The partners concluded that the board’s reliance on scheduled trial dates has “proven remarkably inaccurate”, and that “trial dates in patent litigation are not stable and make a very poor barometer for evaluating the potential efficiency of denying institutions based on a parallel proceeding”.
IPRs denied by the PTAB in 2020 that came under NHK/Fintiv, or were based on the parallel petition requirements
Source: Unified Patents
A dramatic effect
Since May 2020, the effect of the rule has been dramatic: the PTAB denied a record number of IPRs last year, the vast majority—62%—came under NHK/Fintiv or were based on the parallel petition requirements, according to research carried out by Unified Patents.
In September 2021, Democratic senator Patrick Leahy announced plans for new legislation to erode the power of the PTAB to reject IPRs under the controversial rule.
According to Leahy, the new legislation would abolish PTAB’s ability to deny review petitions for reasons other than the merits of the case and would enable government agencies to file challenges.
In early November, Republican senator Thom Tillis wrote to the USPTO’s acting director Andrew Hirshfeld and published a letter regarding Apple v Fintiv, claiming that he was “concerned” about how its application is impacting patent litigation “in a single district court”.
This letter criticised a “sole judge” at the West Texas court, namely Judge Alan Albright, for scheduling very early trial dates, which are often “impossible” to fulfil alongside concurrent PTAB proceedings.
Tillis said: “Because the PTAB panels interpret Fintiv to require scheduled trial dates to be taken at face value, panels have regularly exercised discretion to deny IPRs in deference to litigation pending before that district.”
Image: Shutterstock.com / thansak253700
INDIA
Hirshfeld grants first USPTO director review after Arthrex
The acting director of the US Patent and Trademark Office Drew Hirshfeld has agreed for the first time to review a final written decision from the Patent Trial and Appeal Board (PTAB) after being given oversight over the board’s rulings in the Supreme Court’s Arthrex decision.
Hirshfeld will rehear a decision in Patent Trial and Appeal Board (PTAB) proceedings that invalidated a Samsung lithium battery patent, according to an order handed down on Monday, 1 November.
The June 21 decision in the United States v Arthrex gave the director of the USPTO authority to challenge final PTAB decisions. This order marks the first time that power has been exercised.
Hirshfeld is currently filling the role of director at the USPTO, but in early November, President Joe Biden officially nominated the head of Winston & Strawn’s Silicon Valley office Katherine (Kathi) Vidal to officially take the position.
Samsung requested that Hirshfeld review the PTAB’s final decision on August 14, claiming the board erred in finding challenged claims in US patent 9,8199,057 obvious in light of two references named Fujii and Yamada. As a result, the board found claims 1-5 and 13-17 unpatentable.
“Samsung requested that Hirshfeld review the PTAB’s final decision on August 14, claiming the board erred.”
Samsung also claimed that the board’s obviousness ground of unpatentability over the two references “materially differed” from the grounds asserted in the petition and that the board “improperly ignored” the specification and prosecution history of the ‘057 patent in proceedings.
In the order granting the review, Hirshfeld claimed that the PTAB board did not specifically address the patentability of claims 5 and 17 of the ‘057 patent, leading him to vacate the final written decision and order the PTAB to issue a new one.
Post-Arthrex process
The USPTO issued new interim procedures in June following the Arthrex ruling, giving the office’s direct to rehear final PTAB rulings and allowing parties to request an inter partes review or post-grant review of the decision from the director.
To further clarify the process, the office also released a Q&A further detailing the review process.
Image: Shutterstock.com / sheff
US
PepsiCo faces preliminary injunction in trademark suit
Cold-brew company Rise Brewing secured a preliminary injunction against food and beverage giant PepsiCo in the companies’ ongoing trademark dispute on November 3.
The dispute between the parties started in June 2021, when Rise filed a lawsuit at the US District Court for the Northern District of Illinois accusing PepsiCo of being a “repeat trademark offender”.
Rise sells ready-to-drink canned coffee and tea-based beverages. The trademark ‘Rise Brewing Co’ is featured on each can, with the word ‘Rise’ appearing in large red capital letters. The trademark (registration number 5,333,635) was registered in 2017.
PepsiCo launched its Mtn Dew Rise range of caffeinated energy drinks earlier this year. The range comprises caffeinated canned beverages sold under the trademark ‘Mtn Dew Rise Energy’, with the word ‘Rise’ appearing in large, brightly-coloured capital letters.
Rise claimed that it is a “classic case of reverse confusion”, whereby a larger brand adopts the mark of a smaller competitor to confuse customers into thinking the two are connected.
“PepsiCo’s actions in unlawfully adopting Rise Brewing’s mark are the latest chapter of its storied history of taking instead of innovating, a story that is well documented in prior litigations where PepsiCo has repeatedly been accused of and found liable for infringing on others’ trademark rights,” said the complaint.
The decision
PepsiCo has now been ordered not to use or display the ‘Mtn Dew Rise Energy’ trademark on its canned beverages in the US.
District judge Lorna Schofield said that Rise had offered “credible evidence on incidents of actual confusion, the likelihood of confusion, and irreparable harm” following an evidentiary hearing in October.
“The two marks are confusingly similar in appearance.”
Judge Lorna Schofield, US District Court for the Northern District of Illinois
“The two marks are confusingly similar in appearance,” she said. “On both of the parties’ respective products, ‘Rise’ is printed on a beverage can, in large typeface, in all-capital letters, in a bright colour against a light background and is the dominant feature occupying the top third of the can.”
The judge was not persuaded by PepsiCo’s argument that the marks are not confusingly similar because the cans themselves are different sizes and the logos are in different fonts.
PepsiCo had also argued that it would incur substantial costs in rebranding and lost sales if a preliminary injunction were to be granted, but Schofield said she had to balance these costs against the harm that would be done to Rise if it were not granted.
Rise had shown that the risk of reverse confusion is probable, according to Schofield, meaning that Rise is at risk of being overwhelmed by PepsiCo—a larger and better-known company—without the injunction.
Schofield found that Rise “submitted credible evidence that it faces an existential threat” from PepsiCo’s infringement.
The judge added that she was unpersuaded that the harm this may cause PepsiCo was “not of its own making” because Rise had sent a cease-and-desist letter two months before the launch of the Mtn Dew Rise range.
Under the terms of the preliminary injunction, PepsiCo cannot feature ‘Mtn Dew Rise’ or any mark which is confusingly similar to it in connection with the promotion, sale, or distribution of single-use, canned energy beverages, nor can it use the mark in any advertising.
PepsiCo is required to comply with the order within seven days and, within eight days, it must file a report setting out how it has done so. The preliminary injunction will remain in place until the conclusion of the proceedings, or until a motion to dissolve it is granted.
Image: Shutterstock.com / monticello
CHINA
Pocky can’t convince SCOTUS to rehear trade dress suit
The US Supreme Court won’t reconsider a precedential ruling on trade dress protection against Ezaki Glico, the maker of Pocky biscuits.
Ezaki Glico failed to convince the court to review a US Court of Appeals for the Third Circuit ruling that invalidated its trade dress protection for the stick-shaped confectionery, according to a notice denying Ezaki’s writ of certiorari published on November 1.
The Third Circuit noted that the cookie design was “functional” and therefore not entitled to trade dress protection, which allowed competitor Lotte International America Corp to continue selling its own similarly shaped snacks.
The Japanese confectioner started selling Pocky in the US in 1978 and secured trademarks and patents in order to ward off imitators, including two product configurations registered as trade dress.
It also had a utility patent for a “Stick Shaped Snack and Method for Producing the Same”.
Lotte started making its own stick-shaped biscuits called Pepero in 1983, which prompted Ezaki to send letters to Lotte notifying it of its registered trade dress and asking Lotte to cease and desist selling Pepero in the US.
“If an inventor created a new light-bulb shape that improved illumination, he could not trademark that shape.”
Judge Madeline Arleo, US Court of Appeals for the Third Circuit
But Lotte continued selling Pepero, with no action taken until 2015 when Ezaki filed a lawsuit against its competitor with the US District Court for the District of New Jersey, alleging trademark infringement and unfair competition.
The New Jersey court granted a summary judgment for Lotte, holding that because Pocky’s “configuration” is functional it cannot be protected as trade dress.
This led Ezaki to appeal the summary judgment to the Third Circuit, which claimed that patents, not trademarks or dresses, covered useful inventions, stripping Ezaki of its decades-old trade dress protections.
When judging the functionality of Pocky, it cited Ezaki’s internal documents that show that it wanted to make a snack that people could eat without getting chocolate on their hands. The stick shape was also created in order to make it “easy to hold so it can be shared with others”. This, according to the Third Circuit, constituted functional value.
“If an inventor created a new light-bulb shape that improved illumination, he could not trademark that shape,” the Third Circuit noted.
Writing for WIPR last year, Julia Anne Matheson of Potomac Law said Pocky’s loss at the Third Circuit could have repercussions for US trade dress law.
Image: Shutterstock.com / Zety Akhzar
CHINA
Spain adopts EU new copyright directive
Spain is the latest country to adopt the EU’s new copyright directive, which allows publishers to negotiate rates to rehost their news on search engines and social media websites.
The Directive on Copyright in the Digital Single Market was passed in 2019, giving publishers the right to authorise or prohibit third-party online platforms from reproducing their content on a voluntary basis.
The Spanish Culture Ministry announced it had implemented the EU law on November 2. “The Royal Decree-law does not pronounce on the matter, thus giving the option and freedom to each editor and owner of rights to manage it, either individually through direct negotiation with the aggregators, or through a collective management entity on a voluntary, non-mandatory basis,” said the ministry.
Countries such as France and Germany have already adopted the directive, which was meant to be implemented into national law across the union by June 2021, but 23 of the 27 member states failed to do so.
Google news
Spain passed a similar law in 2014, which required news aggregators such as Google to pay for a licence to use any snippet of news content, which led to the shutting down of Google News in the country.
However, the introduction of the EU copyright directive will allow Google to strike individual deals with publishers on a voluntary basis, a move that could lead to Google News’ being relaunched in Spain.
Following the launch of the EU copyright directive in 2019, reports surfaced that Google’s parent company Alphabet was in talks with Spanish publishers to start hosting their content again.
“Conditions look promising for the potential launch of Google News in Spain.”
Spokesperson for Google Spain
Following the launch of the EU copyright directive in 2019, reports surfaced that Google’s parent company Alphabet was in talks with Spanish publishers to start hosting their content again.
A spokesperson for Google Spain told Reuters: “Based on the initial information, conditions look promising for the potential launch of Google News in Spain. However, we will need to see the final law before making any formal announcements.”
Paying for content
Pressure is mounting on governments across the world to implement similar laws to reimburse content creators for rehosting their work.
Earlier this year, Australia passed a law requiring Google and Facebook to negotiate compensation with press publishers.
The US Copyright Office is also seeking submissions on whether ancillary copyright protections are warranted in the US in light of the new EU and Australian copyright laws.
Image: Shutterstock.com / stoyanh
