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U.S. Intellectual Property and New Media Law Update FESTO FOREVER Festo Corp., v. Shoketsu Kinzoku Kogyo Kabushiki Co., (Fed. Cir. 2002) WHOSE SUIT IS IT ANYWAY Holmes Group, Inc. v. Vornado Air Circulation System, Inc., (June 3, 2002) OLD CLAIMS ARE BEST LEFT Jarrow Formulas, Inc. v. Nutrition Now, Inc., (9th Cir. 2002) BEANIE BABIES EXPOSED Ty, Inc. v. Publications International Ltd., (7th Cir. 2002) FESTO FOREVER Festo Corp., v. Shoketsu Kinzoku Kogyo Kabushiki Co., (Fed. Cir. 2002) The Federal Circuit's attempt to create a bright line rule on the interplay between the doctrines of prosecution estoppel and the doctrine of equivalency, and thus to avoid having to think, has been limited, but not stopped, by the Supreme Court. A short course in the history of the doctrine of equivalency in patent law follows. In the beginning, there was the word and the word was the claim. To infringe a patent claim, the infringing device had to have every element of the claim. The courts soon realized that this would cause manifest injustice where some unimportant element of the claim had substituted for it an equivalent element. Hence, the doctrine of equivalency. You still infringed if you substituted for an element in the claim, something which did the same thing, in the same way to produce the same result. The courts soon placed a limit on this doctrine. If during the prosecution of the application you specifically gave up the territory by express amendment of the claim to avoid rejection over prior art, you were estopped from claiming equivalency. Making the decision as to whether such an estoppel had arisen during the prosecution required a fair amount of legal horse power and the Federal Circuit had tired of judging the subtleties involved. Thus, in Festo, the Federal Circuit made a blanket decision that if there were any amendment of the claim with regard to a feature, which narrowed the claim to obtain allowance, that feature was not open to the doctrine of equivalence in that regard. Decisions on the doctrine of equivalency became a "no sweat" proposition. Here the Supreme Court told the Federal Circuit to get back to work and that the trier of fact had to look beyond the mere fact of amendment. At the same time, it did limit the doctrine significantly. The Supreme Court held that prosecution estoppel may apply to any claim amendment made to satisfy the Patent Act (requirement), not just amendments made to avoid the prior art. However, the bar was not absolute. While the amendment may be considered a general disclaimer of the territory between the original claim and the amended claim, the patentee can rebut the presumption by showing that at the time of the amendment, one skilled in the art could not reasonably be expected to have drafted a claim that would have literally encompassed the alleged equivalent. The patentee bears the burden of showing that the amendment does not surrender the particular equivalent in question. The decision can be viewed at: http://laws.findlaw.com/us/000/00-1543.html WHOSE SUIT IS IT ANYWAY Holmes Group, Inc. v. Vornado Air Circulation System, Inc., (June 3, 2002) Plaintiff brought a suit seeking declaratory judgment that its products did not infringe respondent's trade dress and for an injunction restraining respondent from accusing it of trade dress infringement. The defendant answered with, inter alia, a compulsory counterclaim asserting patent infringement. Plaintiff received Summary Judgment in its favor in the District Court and the defendant appealed to the Federal Circuit. The Federal Circuit took jurisdiction and vacated the District Court summary judgment. Here the Supreme Court again slaps the wrists of the Federal Circuit for overstepping its bounds. As Justice Scalia points out, the Federal Circuit is vested with exclusive jurisdiction over an appeal from a final decision of a District Court of the United States where the case arose in whole or in part under any act of Congress relating to patents. The key here is the requirement of "arising under." The well-pled complaint rule governs. Here, the only claim in patent law was found in a counterclaim and therefore the Federal Circuit did not have jurisdiction. In concurring opinions, Justices Ginsberg and O'Connor noted that since the counterclaim was compulsory, if there had been a trial on the merits on the patent claim, such claim would have been appealable to the Federal Circuit. This patent claim would give rise to an independent ground for jurisdiction, but this was not the case here, where there was not a trial on the merits on that issue. The decision can be viewed at: http://laws.findlaw.com/us/000/01-408.html OLD CLAIMS ARE BEST LEFT Jarrow Formulas, Inc. v. Nutrition Now, Inc., (9th Cir. 2002) This case presents the Ninth Circuit view on the doctrine of laches as applied to false advertising. Since about 1985 the defendant has distributed a probiotic nutritional supplement called PB8. Its label and advertising claimed it contains fourteen billion "good" bacteria of eight different types in each and every capsule and that it does not require refrigeration. The plaintiff says: "no way." Whatever the truth of the allegation of the complaint or the label, the plaintiff did not sue until 2000, some seven years after learning of, and first making complaints to the defendant about, the false advertising. The court differentiated the doctrine of laches from the statute of limitations. The statute of limitations is an absolute bar, usually statutory, based on time. There is no statute of limitation built into the Lanham Act and accordingly the equivalent fraud statute of the state where the court is sitting would be used. In this case, three years. Whether or not this Statute of Limitation should be applicable to a continuing false advertising claim was not decided by the court. The Statute, however, was used as a basis for determining whether laches (estoppel) based both on delay and the harm done to the defendant by such delay would be applicable. Here the court found no excuse for plaintiff's delay. Given that defendant's public acceptance was centered on the product claims, the Ninth Circuit found substantial harm to the defendant if an injunction now issued. Accordingly, it dismissed both the claim for damages and any prospective injunction, dismissing the argument that the public interest would be served in prohibiting future false claims by the defendant. The decision can be viewed at: http://caselaw.lp.findlaw.com/data2/circs/9th/0155154p.pdf BEANIE BABIES EXPOSED Ty, Inc. v. Publications International Ltd., (7th Cir. 2002) Plaintiff makes Beanie Babies. If you don't know a Beanie Baby from a bouncing baby, do not worry. All you need to know is they are dolls in an excess of variations. Defendant makes various books about Beanie Babies. The books range from ones clearly aimed at children, which are basically picture books of all the Beanie Babies with some accompanying childish text, to dedicated collector guide books containing a great deal of related information necessary to those feeling a compulsion to have, buy, sell or otherwise deal with those dear little overpriced mannequins. The District Court granted summary judgment against all the books for copyright infringement. It found all the books to be derivative works since each contained a set of color photographs of all of the Beanie Babies then produced, dismissing the defendant's fair use defense for all of the books. Judge Posner, writing for the court, indicated that whether or not these photographs in the books fell under the fair use doctrine as an aid in the collectors guides should be decided at trial. The court indicated that at least the simplest of the children books would most likely not be a fair use, since they are basically a picture book of Beanie Babies pictures. On the other hand, true collectors' guides might very well be permissible as a fair use, because, as Judge Posner explains, a collector's guide without the photographs would not be commercially viable. The court also noted that for any books found not to be a fair use, the measure of damages would be the profit differential between what the books could sell for with the pictures and without the pictures, which also could only be determined at a trial on the merits. The decision can be viewed at: http://laws.findlaw.com/7th/013304.html |
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