Multiple Inventions Within a Single Patent
A patent application may contain claims to more than one invention. If an application contains claims to more than one invention, the United States Patent and Trademark Office (USPTO) may impose a restriction requirement. The applicant must then elect which one of the inventions should remain within the current application. However, if you choose not to pursue claims to one of the invention, you may file a continuation application, called a divisional, directed toward the nonelected invention(s).
The Independent and Distinct Standard
The Commissioner of Patents and Trademarks may require the restriction if two or more independent and distinct inventions are claimed in one application. However, current USPTO policy will not allow restriction, when the application includes multiple inventions, unless the claims directed towards the different inventions are separately patentable in light of the prior art and in light of each other. This means that neither is obvious in the light of the other.
“Independent” is defined by the USPTO as meaning not dependent or that there is no disclosed relationship between the two or more subjects disclosed.
”Distinct” is defined by the USPTO as meaning related or dependent, but capable of separate manufacture, use, or sale as claimed and patentable over each other.
Restriction is appropriate where two joined inventions are either independent or distinct.
The USPTO may require restriction where two or more inventions are related or dependent but nevertheless ”distinct.” Inventions are distinct if they are both capable of separate manufacture, use, or sale as claimed and patentable over each other. Assuming two joined inventions are distinct in this sense, then restriction will be required if, but only if, one or more of the following ”reasons” are present:
• separate classification
• separate status in the art
• a different field of search
Procedure for Division and Election
An examiner enters a restriction requirement when he or she determines that the application includes claims to independent and distinct inventions. The applicant must then indicate a provisional election and may traverse the requirement by requesting reconsideration. In the next action, the examiner may make the requirement final and will take action on the elected claims and any linking or generic claims.
Election of Restricted Invention
A restriction requirement calls upon the applicant to elect that invention to which his or her claims are to be restricted. Election is thus the designation of the particular one of two or more disclosed inventions that will be prosecuted in the application.
Traverse and Reconsideration
If the applicant wishes to contest the restriction requirement, he or she must traverse the requirement and request reconsideration as well as stating a provisional election. The applicant must give reasons why the requirement is in error. After traverse, the examiner reconsiders the requirement and may repeat and make it final. In making the requirement final, the examiner also acts on the merits of the elected invention.
Petition and Review
If the examiner makes a traversed requirement final, the applicant may petition the Commissioner to review the requirement. The applicant may file the petition after the restriction requirement is made final and must file it not later than an appeal on the merits of final rejection. A restriction requirement is subject to judicial review through mandamus and the Administrative Procedure Act.
Withdrawal of Claims for Nonelected Inventions or Species
After a restriction requirement becomes final, the examiner will withdraw from further consideration all claims for nonelected inventions or species. If claims to elected inventions are allowed, the claims to nonelected inventions must be cancelled. The applicant may traverse the examiner’s holding that a given claim is not for elected subject matter. Such a holding is an appealable rejection. The applicant may file a divisional application claiming the nonelected inventions or species.
Remedies for Patent Infringement
Under theories of patent infringement, there are no criminal penalties, but civil remedies are available in the United States under federal law. There are several forms of relief available to the patent owner who has successfully proven patent infringement. In such a civil action, the courts may afford either or both of two basic remedies — a judgment for monetary damages or an injunction. An injunction may be either preliminary or permanent. To recover damages, a patent owner must prove either the infringer was notified of the infringement and continued to infringe or if the patented device contianed a patent notice. Infringement remedies are only available for infringements that occur during the life of the patent.
Federal Court, Arbitration or the ITC
Remedies for patent infringement are obtained through suit in federal court. Alternatively, the patent owner and accused infringer can agree to settle their dispute through arbitration or arbitration may be required by a contract under which the dispute arises. The court action is quite formal and provides for appeals. Arbitration, while following the general rules of court proceedings, is less formal, and the decision of the arbitrator is binding. Generally, arbitration is less costly and faster than litigation in federal court. In either forum, the same basic remedies are available.
An alternative source of limited relief is available through the International Trade Commission (ITC) when the source of the infringing products is outside of the United States. The ITC can exclude from importation products that infringe a valid U.S. patent and cause injury to a domestic business. However, no compensation for past infringement or attorney’s fees are available in an ITC proceeding.
The patent statutes provide for the recovery of compensatory damages as the primary monetary remedy for patent infringement. The primary award should be the best approximation of the amount necessary to restore the owner to the financial position he or she would have enjoyed had the infringer not engaged in unauthorized acts in violation of the owner’s exclusive patent rights. The three traditional modes of measuring compensatory damages are lost profits, established royalty, and reasonable royalty.
Lost profits, in the form of sales diversion, price erosion, or increased expense, are an appropriate basis for recovery when the patent owner or an exclusive licensee exploits the lawful exclusive rights of the patent directly by manufacture, use, or sale.
If the owner chooses to exploit the patent through offering licenses at an established royalty rate, that rate is the appropriate basis for recovery.
Absent sufficient evidence of lost profits or an established royalty, the patent owner may in any case recover against the infringer not less than a reasonable royalty. A reasonable royalty is the royalty that willing parties would have agreed to had they negotiated a license under the patent.
The remedy against continued infringement of a patent is an injunction. In a patent infringement suit, an injunction is a court order prohibiting the manufacture, use, or sale of the patented invention. Violation of an injunction is considered contempt of court and is dealt with by contempt proceedings. In such a proceeding, only violation of the injunction need be proven. This may, however, require proof of infringement, as when a prior infringer attempts to avoid the claims of the patent by modification of the article or process. Typically, an injunction is issued at the conclusion of the case after all of the evidence and arguments have been heard. However, under appropriate circumstances, a preliminary injunction may be issued at the outset, thereby suspending the contested conduct while the case is being decided.
Preliminary injunctions are issued to protect the patent owner’s rights during the time of the lawsuit and will not be granted except upon a strong showing of probable success on the merits, irreparable injury, and an imbalance in the relative hardships. The standards for preliminary injunctions in patent infringement suits are basically the same as for preliminary injunctions in other types of suits. The patent owner must establish (1) a strong probability of success on the merits at the final hearing and (2) irreparable injury. In patent cases, the courts require a particularly strong showing of probable success.
The U.S. Court of Appeals for the Federal Circuit applies a four-factor test for preliminary injunctive relief against patent infringement. No one factor, taken individually, is necessarily dispositive. The four factors are:
1. reasonable likelihood of success on the merits,
2. irreparable harm,
3. balance of hardships tipping in its favor, and
4. the impact of the injunction on the public interest.
A patent owner prevailing on the merits of a patent infringement claim will usually be granted a permanent injunction against future infringement unless the public interest otherwise dictates. An injunction may be denied as to further use or sale of particular items if a damage award has provided the patentee full compensation for those items.
Damages can only be awarded if proper notice of the patent was given. Notice is given by the patent owner by marking the patented product with the designation “patented,” or the abbreviation “pat.,” followed by the patent number. Such notice should be applied to the patented article or articles made by a patented process. If this is not possible, labels bearing the notice should be applied to the packaging for the articles. In the absence of this marking, actual notice of the specific patent must be given to an infringer, and damages can then only be obtained for infringements after notice.
Trademark Dilution 2006
In general, trademark infringement liability occurs when a mark is used in a way to create consumer confusion. This occurs when the mark or a similar mark is used in a way that is likely to confuse the public into incorrectly believing that the trademark owner is the source or sponsor of another’s products. However, Trademark dilution liability occurs when a competitor’s mark is used in a way to dilute the value of the Trademark. Anti-dilution laws are intended to enable trademark owners to prevent the gradual weakening or whittling away of the strength of the Trademarks, through blurring or tarnishment, even if the public is not likely to be confused. Until 1996, trademark dilution laws consisted of a patchwork of non-uniform state statutes and common law. In early 1996, Congress enacted the Federal Trademark Dilution Act (FTDA) to provide nationwide injunctive relief for diluting uses of nationally famous trademarks. This law was revised in 2006 to expand the scope of liability to include not only famous marks but also widely recognized marks.
Federal Trademark Dilution Act
The Federal Trademark Dilution Act (FTDA) became law in 1995 and was revised in 2006. The newly revised statute within the Lanham Act provides a federal remedy for dilution. State law is not preempted. In fact, the laws of many states go farther in granting more protection than that provided in the federal statute. Although many states had enacted laws that prohibited trademark dilution, the FTDA was intended to provide uniform and nationwide protection for famous marks. “Dilution” may occur when a mark is used in a way that is likely to cause dilution by blurring or by tarnishment. Dilution by blurring is defined as using a mark similar to a famous mark in such a way that it impairs the distinctiveness of the famous mark. Dilution by tarnishment is defined as associating a similar mark with a famous mark in such a way that it harms the reputation of the famous mark. Dilution may occur regardless of the presence or absence of (1) actual or likely confusion, mistake or deception, (2) competition between the owner of the famous mark and other parties, or (3) actual economic injury.” The FTDA applies to famous marks which are distinctive, inherently or through acquired distinctiveness. The term “famous” is defined as marks which are widely recognized by the general consuming public.
In determining whether a mark is famous a court may consider the following non-exclusive factors:
• the duration, extent and geographic reach of the mark in connection with the goods or services with which the mark is used;
• the amount, volume and geographic extent of the sales of goods or service offered under the mark;
• the extent of actual recognition of the mark;
• whether the mark was registered under the Act of March 3, 1881, or the Act of February 20, 1905, or on the principal register.
“Blurring” typically refers to the “whittling away” of distinctiveness caused by the unauthorized use of a mark on dissimilar products. Dilution by blurring can occur when a trademark is used by someone other than the trademark owner on products that are very different from those normally produced by the trademark owner.
“Tarnishment” involves the unauthorized use of a mark which links it to products that are of poor quality or which are portrayed in an unwholesome or unsavory context that is likely to reflect adversely upon the owner’s product.
Remedy – Injunctive Relief
Generally, only injunctive relief is available under the FTDA. However, if the defendant willfully intended to trade on the owner’s reputation or to cause dilution of the famous mark, the owner of that mark may also be entitled to other remedies, including defendant’s profits, damages, attorneys’ fees and destruction of the infringing goods. The availability of monetary relief is a striking departure from state dilution laws, which have typically provided only for injunctive relief. Additionally, the FTDA provides that the ownership of a valid federal registration is a complete bar to the assertion of a dilution claim under state law.
The FTDA allows injunctive relief to owners of famous marks against another’s use of the mark if:
1. the use of the mark is commercial,
2. the use began after the senior mark became famous, and
3. the use dilutes the distinctive quality of the mark.
Nonactionable Use of a Famous Mark
The following are not actionable under the FTDA:
• fair use of a famous mark by another person in comparative commercial advertising or promotion to identify the competing goods or services of the owner of the famous mark
• noncommercial use of a mark
• all forms of news reporting and news commentary
State Dilution Laws
More than half of the states afford protection from trademark dilution through statutory or case law. The FTDA expressly states that the federal statute does not preempt state dilution laws. Where the federal statute provides protection for dilution of nationally famous marks, state statutes seek to protect interests of a more local nature. Courts have acknowledged that trademarks need not be nationally famous for a mark to be strong in a particular geographic region or industry segments. In addition, whereas the FTDA requires actual dilution, state laws sometimes require only a showing of likelihood of dilution to grant injunctive relief.
Dilution in the United States Patent and Trademark Office
Although the FTDA became effective in 1996, it was not until 1999 that dilution became a basis on which an application or registration of a mark could be challenged in a U.S. Patent and Trademark Office opposition or cancellation proceeding. It still is not a basis on which an examiner can reject an application during an ex parte examination
A trademark license is a contractual arrangement whereby a trademark owner permits another to use the owner’s trademark under circumstances where, but for the license; the other would be a trademark infringer. However, such a license is unnecessary where the use of the mark would not infringe, such as where the other user is merely a re-seller of the trademarked product.
Franchising and Increased Trademark Protection
A trademark may be licensed to a single licensee or to multiple licensees. Trademark licensing activity has increased in the United States mainly because of franchising and increased trademark protection. Franchising links groups of businesses together into systems identified by eye-catching, distinctive trademarks. At the same time, the courts have extended the scope of protection to prevent infringements on an ever-widening variety of products they have stimulated licensing activities. The trademark is usually the single most dominant unifying element in a franchise system. It identifies the particular product or service to the purchasing public and guarantees a uniform standard of quality.
Licensor Required to Exercise Control Over Nature and Quality of Goods or Services
Authorized third-party uses of a mark should be licensed, and all licensing agreements should be written carefully, signed, and enforced. The agreement must set standards concerning the licensee’s use of the mark and the quality of products or services with which the mark will be used. Some trademark owners omit these formalities due to the nature of their relationship with a particular licensee. If the parent company or franchise owner engages in conduct that makes confusion likely, trademark rights may be abandoned because trademark law is designed to protect consumers from confusion regarding the source or origin of products and services. If control is not adequately maintained, the license is a ”bare” or ”naked” license and the trademark owner faces possible abandonment of his trademark rights.
“Naked licensing” occurs when third-parties are allowed to use a trademark without restriction; when the quality of goods or services provided under a mark by third parties is not controlled; or when rights in a mark are assigned, in whole or part, without the goodwill of the business symbolized by the mark. Naked licensing severs a mark from its source-identifying function, and thus results in the loss of trademark rights through abandonment. Naked licenses deceive customers, who are entitled to rely on the mark as signifying consistency and predictability. If the licensor does not hold its licensees to a certain standard, the public will be misled by the use of the mark, whether or not the products are in fact of good quality.
The Related Companies Doctrine
The Lanham Act does not expressly require a trademark licensor to exercise quality control. Nor does it establish a principal-agent relationship. Instead, it operates through the ”related companies” doctrine on a reward-punishment incentive system. If the licensor controls quality adequately, the licensee becomes a ”related company” and the licensor obtains the relevant benefits. If he or she does not, and the mark thereby ceases to function as an identification of source, trademark rights are lost through abandonment.
Provisions Essential to Trademark License
A trademark license should identify the following:
• the trademark
• the licensor and the licensee
• the trademark right(s) to be licensed, and
• the nature and quality of the goods and services that the licensee will offer under the trademark.
Other Issues to Address in Trademark License
• Royalty. When a licensor grants a trademark license in return for a royalty payment from its licensee, a royalty amount is usually set forth in the license.
• Trademark Usage. The licensor may specify the manner in which the trademark will be used on or in connection with the goods and services of the licensee and on advertising and promotional materials. The licensee may be required to obtain the licensor’s permission before using any new presentation of the trademark.
• Quality Control Monitoring. A licensor may require access to a licensee’s facilities, raw materials, finished products, personnel, and records to monitor the licensee’s adherence to the licensor’s quality standards.
• License Term. A trademark license usually states a fixed term for the license and the conditions under which the license may be renewed.
• Exclusivity. A trademark may be licensed exclusively to a single licensee or licensed non-exclusively to one or more licensees. In a non-exclusive licensing arrangement, the licensor may retain rights to use the trademark.
Recording of Trademark License
In some countries, including the United States, there is no legal requirement that trademark licenses be recorded with the Trademark Office. Such recording simply provides notice to the public of the existence of the license agreement. In other countries, however, a license must be recorded to be effective against third parties.
Online Copyright Infringement
Copyright infringement is a growing concern for businesses or individuals with an internet presence. In order to prevent onging infringement, a take down request may be sent to the infringing party adressing the infringement. In addition to the owner of the website, the online service provider (OSP) may also be liable for the display of the infringing material. Congress enacted a safe harbor within The Online Copyright Infringement Liability Limitation Act (OCILLA) to OSPs who promptly take down content once they have received notice that they are infringing another’s copyrights. The takedown request is a powerful device for the protection of copyright on the Internet.
Service Provider Defined.
The OCILLA provides a definition of “service provider” for purposes of the limitation as follows:
• an entity offering the transmission, routing, or providing of connections for digital online communications between or among points specified by a user, or material of the user’s choosing, without modification as to the content of the material as sent or received; and
• a provider of online services or network access, or the operator of facilities therefore.
All entities whose services fit these descriptions may qualify with regard to those activities. However, to the extent the functions of the OSP involve creation and posting of content, choosing recipients of messages or controlling users, the limitation does not apply and regular copyright rules respecting proper clearance, as well as fair use and other defenses, are applicable.
Benefits to Online Service Providers and Customers
OCILLA provides the following benefits to OSPs:
• new protection from liability to its own customers as a result of a decision to remove material;
• clear procedures for removing and restoring material; and
• a safe harbor against infringement claims, duplicating the protection against copyright infringement liability provided by the Communications Decency Act.
Customers gain through a reduced chance that works will be removed unnecessarily by an OSP which hasn’t received an infringement complaint.
Requirements to Obtain the Safe Harbor
To obtain the safe harbor the OSP must:
• not have actual knowledge that the material or an activity using the material on the system or network is infringing;
• not be aware of facts or circumstances from which infringing activity is apparent;
• upon obtaining such knowledge or awareness, act expeditiously to remove, or disable access to, the material;
• not receive a financial benefit directly attributable to the infringing activity, in a case in which the service provider has the right and ability to control such activity; and
• have a designated agent registered with the U.S. Copyright Office to receive notifications of claimed infringement, which are also called takedown notices. If the designated agent receives a notification which substantially complies with the notification requirements, the OSP now has actual knowledge and must expeditiously disable access to the work.
The OSP must make available to the public through its service, including on its Web site substantially this information:
• the name, address, phone number and electronic mail address of the agent
• other contact information which the Register of Copyrights may deem appropriate
The OSP must also:
• adopt, reasonably implement, and inform subscribers and account holders of a policy that provides for the termination in appropriate circumstances of subscribers and account holders of the service provider’s system or network who are repeat infringers and
• accommodate and not interfere with standard technical measures used to identify and protect copyrighted works.
Notification of claimed infringement
If an infringement has occurred a copyright holder may send a written notification of claimed infringement to the designated agent. If a notice which substantially complies with the requirements of OCILLA is received, the OSP must expeditiously remove or disable access to the allegedly infringing material. After the notice has been complied with, the OSP must take reasonable steps to promptly notify the alleged infringer of the action. If there is a counter notification from the alleged infringer, the OSP must respond appropriately to it. If the OSP complies with this and the counter notification procedures, it is safe from legal liability to its own customer as a result of taking down the material.
An alleged infringer may file a counter notification to the OSP. Once a valid counter notification has been received the OSP must:
• promptly provide the person who filed the original notification with a copy of the counter notification and inform them that the material will be replaced or access to it restored in 10 business days and
• replace the material and cease disabling access to it not less than 10 and not more than 14 business days following receipt of the counter notification. This does not apply, and the material should not be replaced, if the designated agent receives notification that legal action to seek a court order to restrain the subscriber from engaging in infringing activity to the material has been commenced.
Actual knowledge of infringement
The law requires “actual knowledge” of infringement before action must be taken. Because the OSP may have some potential liability to a customer under contract law for inappropriately removing the customer’s material, waiting for infringement notifications before acting is a prudent course to take. Then, the material can be removed, with the safe harbor protecting the OSP from liability both from the customer and the third party.
Additional Provisions of OCILLA
• The section about transitory network communications says that service providers aren’t liable just because traffic passes through their networks, so long as it is not stored on their systems and is handled automatically by their systems and they don’t control or modify it. Essentially, this says that Internet Service Providers (ISPs) aren’t responsible for what flows through their networks, even if it is infringing and they know it. There are no takedown provisions
• The section about system caching says that system caching conducted in standard ways and not interfering with copy protection systems is fine. If the cached material is made available to end users the system provider must follow the takedown and put back provisions.
• The section about information residing on systems or networks at direction of users applies to personal home pages, Web sites, Internet providers, message boards and a very wide range of other services. It is the cause of the vast majority of activities relating to this law.
• The section about limitation on liability of nonprofit educational institutions protects nonprofit educational institutions from liability for the actions of faculty and graduate student employees relating to course materials placed online for use within courses provided in the preceding three years, provided the institution doesn’t receive more than two infringement notifications about the same individual in a three-year period. The institution must provide informational materials which accurately describe and promote compliance with U.S. copyright laws.
• The section about misrepresentations says that anyone who makes a false claim of infringement or false counter-notification is liable for the damages suffered by the other parties, including legal fees.
Limitations on Relief
A service provider that fails to satisfy one of the limitations of liability set forth in OCILLA may find itself charged with copyright infringement, and thus subject to many remedies. However, a service provider who succeeds in invoking one of OCILLA’s safe harbors is exempt from monetary damages and equitable relief apart from injunctions.
Notwithstanding its limitations on liability, OCILLA still allows injunctions to issue against those service providers who find shelter within its safe harbors, subject to limitation as to their scope. OCILLA creates two types of injunctive relief, depending on which limitation of liability is implicated.