Posts Tagged: "Congress"

Trader Joe’s sued Hallatt (d/b/a Pirate Joe’s) for trademark infringement in the Western District of Washington, invoking the court’s federal question and supplemental jurisdiction. Trader Joe’s alleged that: (1) Hallatt misled consumers into falsely believing Pirate Joe’s was authorized or approved by Trader Joe’s; (2) utilized a confusingly similar “South Pacific” trade dress for his Pirate Joe’s store; (3) displayed Trader Joe’s trademarks in connection with the sale of products at Pirate Joe’s; and (4) resold Trader Joe’s products without authorization and without adherence to Trader Joe’s’ strict quality control practices. Trader Joe’s claimed Hallatt’s behavior diluted its trademarks, confused consumers, and damaged Trader Joe’s reputation by associating it with high price, lower quality products. Trader Joe’s sought damages and to permanently enjoin Hallatt from reselling its goods or using its trademarks in Canada.

Prepared statements released in advance of the hearing talked tough, but that was pretty much it. Insofar as getting to the root of the problems identified in the IG report the hearing turned out to be a big, fat nothing burger. I guess when the fraud is only 2% of the hours worked that is seen as a moral victory and a sign of good government. Perhaps 2% fraud in government is the best we can expect, but if you dig even one fraction of a level deeper within the IG report you will notice that almost 45% of those hours characterized as fraudulent were claimed by fewer than 5% of patent examiners. How is it possible that less than 5% of patent examiners accounted for nearly half of the fraudulent hours identified by the Inspector General? If there are valid reasons that the many hard working, conscientious examiners might be working and not logged in then why are so many of these questionable hours disproportionately being claimed by only a small number of patent examiners?

The Supreme Court granted certiorari this term in Star Athletica, L.L.C. v. Varsity Brands, Inc., which considers whether typical designs on cheerleading uniforms can be copyrightable subject matter. The appeals court believed that the designs were appropriate, but my guess is that several Supreme Court justices reacted with skepticism, which is why they decided to take the appeal. Those engaged with product development eagerly await the decision in this case because there is significant judicial uncertainty about the application of copyrights to useful products, and in particular, with how to draw the line between artistic craftsmanship and industrial design. Unfortunately, this case raises rather narrow issues, and the Court will be able to resolve them while skirting the most difficult debates. Thus, I believe that those looking for hard-and-fast rules will ultimately feel no more satisfied than observers did after the Court’s decisions with patentable subject matter, such as in Bilski v. Kappos.

All of the post grant challenges ushered in by the America Invents Act (AIA) were a bad idea. They never should have been created in the first place. All the post grant proceedings have done is make infringing patents a more economical choice, while making it more costly for innovators to obtain and keep the protection they need to make innovating a worthwhile endeavor. It was all too predictable that a new tribunal would over assert its own jurisdiction, but the breadth of just how arbitrary, capricious and fundamentally unfair the process would be was simply not predictable.

Unfortunately, Mr. President, after five years I cannot report back that the AIA has yet ”improve[d] patent quality and help[ed] give entrepreneurs the protection and the confidence they need to attract investment, to grow their businesses, and to hire more workers.” The current implementation of PTO post issuance proceedings is undermining confidence in our patent system, chilling innovation at its roots, and, in eyes of some, giving the AIA a bad name.

“My team and I do not tolerate time and attendance abuse,” Lee told the subcommittee. While she did note that the USPTO had taken disciplinary actions against examiners that have abused time and attendance reports, such actions ranging from counseling to expulsion and repayment for hours not worked, she added that there was evidence that instances of time and attendance abuse were not widespread. She cited a report on the USPTO’s telework program issued by the National Academy of Public Administration (NAPA) in July 2015. The report found that “It would appear to be unlikely that [time and attendance] abuse is widespread or unique to teleworkers, and it does not appear to reflect the actions of the workforce as a whole.” Additionally, the report indicated that the agency’s telework program saved the agency $7 million each year on average by allowing examiners to continue working in spite of government shutdowns caused by weather or other reasons.

If Congress, nevertheless, is unmoved by the constitutional arguments for reforming the IPR process, it should weigh the strong economic policy arguments supporting IPR reform, which are outlined in various amicus curiae briefs supporting certiorari. As pointed out in a brief filed on behalf of the Houston Inventors Association, the IPR system “has a great attraction to ‘patent pirates’, companies who [sic] infringe patents and then deny liability, because the IPR has a high rate of success for ‘patent pirates’ to invalidate patents.” In other words, the IPR system facilitates infringers who want to free ride on the fruits of patentees’ labors, thereby ineluctably diminishing marginal incentives for investment in patentable innovations. As a brief filed on behalf of the University of New Mexico explains, the threat of IPR (in particular its anti-patent “death star” reputation), and inconsistencies between PTAB and federal district court patent validity standards, devalue and harm university patents.

Three of the judicial emergencies, just less than 10 percent of all judicial emergencies in the U.S. federal court system, are in the U.S. District Court for the Eastern District of Texas (E.D. Tex.). With the judicial vacancies in E.D. Tex., the concern is that a growing docket of patent infringement cases could create a bottleneck for the court, greatly increasing the amount of time that it takes the court to issue a decision. Business litigation is typically given a backseat to criminal litigation in district courts as American law upholds a suspected criminal’s right to a speedy trial. The vacancies also naturally result in an increased percentage of U.S. patent infringement cases assigned to Judge Rodney Gilstrap. This January, we reported that Judge Gilstrap could be deciding as much as 20 percent of all patent infringement cases filed in U.S. district courts. The fact that one judge could be deciding as much as one-fifth of the patent infringement docket at the district court level seems a little less than democratic.

Removing section 101 would remove the language granting patents only to processes, machines, manufactures, compositions of matter, or new and useful improvements thereof. These categories however have only rarely been used to limit patentablity. The Court has in fact described these terms as expansive. Their removal would not suddenly make the inventions found unpatentable by the Court as abstract ideas or articles of nature patentable. As shown by the discussion above, the judicial exceptions do not rest on a legal interpretation of section 101 in any of its forms. They come from Supreme Court precedent established BEFORE section 101 existed.

How will our patent system treat this wonderful new discovery? How long will it take before its curative benefits can be deployed ? We can only hope that DC’s meddlers in our innovation ecosystem read the Ms. Sun’s article. Because however fervently the medical and scientific communities respond to this growing superbug crisis, IP’s DC government legal eagles are either unaware or unconcerned. The USPTO is regularly rejecting microbial patent applications in blind servitude to Alice-Mayo’s confusing eligibility formula. We can hope, but cannot be assured, the Federal Circuit will make sense some day of Alice-Mayo’s two-step test. But when? Worse, it appears that SCOTUS is infected by the anti-patent poison infesting our Capitol. How refreshing it would be to have our Congress and the nation’s highest Court be as concerned with superbugs as they seem to be with PR-created patent trolls.

The VA announced this April that its EHR system had reached certification for interoperability, months after the DoD had reached the same milestone, but investigators at the U.S. Government Accountability Office (GAO) reached a different conclusion. A recent GAO report indicated that, although the goal of true interoperability between the agencies can be met within two years according to agency planning, the two systems weren’t truly interoperable… It’s in this environment, heavily tinged by the recent GAO report, that a subcommittee of the U.S. Senate Committee on Appropriations came together to take a closer look at what was being done by the VA and the DoD to reach true interoperability.

While the Supreme Court spoke clearly and unanimously on the issue in Cuozzo, this hardly means the standard to be applied to claim construction in IPRs has been settled. Rather, it means only that the solution to the problem lies outside the courts. Because the Patent Office has adopted, by regulation, an unsatisfactory standard, Congress should step in. In the context of IPR proceedings, the Patent Trial and Appeal Board (PTAB) should be instructed to give claim terms their plain and ordinary meaning to one of skill in the art, just as the courts are instructed to do.

On the morning of Tuesday, July 12th, members of the U.S. Senate Committee on Commerce, Science, & Transportation convened for a hearing on a notice of proposed rulemaking recently issued by the Federal Communications Commission (FCC). The hearing, titled How Will the FCC’s Proposed Privacy Regulations Affect Consumers and Competition, did much to talk about the potential effects of the FCC’s increased oversight of broadband Internet service providers even as partisan viewpoints among committee members were exposed.

The day’s most withering criticisms, however, came from the House science committee’s ranking Republican, Rep. Lamar Smith (R-TX). Smith contended that NOAA’s problems had been debated by the committee for years and focused on the delays and rising costs of the current JPSS program. “Congress should not continue to fund an over-budgeted program that has not performed to standards,” he said. He added that he wasn’t convinced that the NOAA is adequately addressing weather data gap risks and said they were “dragging their feet” on considering options. “If NOAA’s afraid of innovation, maybe they shouldn’t be in the business of deciding what technologies are needed to improve forecasting,” Smith said.

Though much of today’s proposed patent legislation is controversial, removal of the Brulotte rule remains largely uncontested by analysts and has historically garnered support on both sides of the political divide. Replacing the Brulotte rule with the rule of reason from antitrust law would improve market efficiency and spur innovation by increasing the dissemination of intellectual property in the marketplace. To unlock those benefits, Congress must modernize how Federal Courts evaluate post-expiration patent royalty cases.