What Are the Most Important IP Protections for U.S. Businesses?

A recent study reveals that most U.S. businesses view trademarks and trade secrets as the most important forms of intellectual property (IP) protection. The study was conducted by the National Science Foundation (NSF) and the U.S. Census Bureau as part of their Business R&D and Innovation Survey (BRDIS).

According to a NSF press statement, the survey polled a nationally representative sample of about 40,000 companies, including companies in both manufacturing and non-manufacturing industries. Here’s what else they had to say:

Fifteen percent of all businesses reported trademarks as either very important or somewhat important to their business (6 percent said trademarks were very important, while 9 percent said they were somewhat important).
Fourteen percent of surveyed businesses reported trade secrets as very important or somewhat important (6 percent and 8 percent respectively).
Twelve percent of those surveyed identified copyrights as important.
Five percent of respondents indicated that design patents are important, while four percent viewed utility patents as an important form of IP protection.
“Much of today’s business derives its competitive advantage from the ability to protect and exploit exclusive rights over investments in intellectual property,” said John Jankowski, lead author of the report in NSF’s National Center for Science and Engineering Statistics. “Hence, IP protection is a persistent and recurrent concern of businesses.”

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USPTO Announces Reforms after Examiner Golfed on the Job

The US Patent and Trademark Office (USPTO) recently announced that it would reform its workplace practices after it was discovered that patent examiners golfed while supposedly on the job.

The revelation about the golfing appeared in a review of the USPTO’s time and attendance policies by the Department of Commerce’s Office of the Inspector General.

The report followed an earlier internal report by the USPTO itself. The draft version of the internal report said that patent examiners “can work inconsistently throughout the year, and even fail to be present at work, with little or no consequences.” However, the final version of the internal report said that investigators were “not able to reach a conclusion” about work-time abuses.

According to the Inspector General’s report, “Inspector A” was authorized to telecommute. The report found that he committed at least 730 hours’ worth of time and attendance abuse and was paid about $25,000 for time he did not actually work in Fiscal Year 2014 – about 43% of the hours he reported.

The investigation was launched when two supervisory patent examiners found copies of an anonymous letter claiming that Examiner A came into the office only at the end of the quarter and that his work was “garbage.”
Examiner A was joined on his worktime golf outings by at least one USPTO co-worker.

The Inspector General referred the matter the US Attorney’s office, which declined to prosecute Examiner A.

When she was still deputy-director of the USPTO, current director Michelle K. Lee told members of Congress that fraudulent time and attendance reporting would be met with appropriate disciplinary action.
Reforms to combat telecommuting abuse at the USPTO include:
• Annual required training on time and attendance rules
• Identifying the causes for attendance misconduct
• Forming employee teams to combat the problem

Many patent applicants are frustrated by the extremely slow pace of the patent examination process. It is not clear whether lax workplace policies may play a role in examination delays, but with these reforms the USPTO is showing acute sensitivity to any indication that its examiners are less than diligent.

Supreme Court Will Review Attorneys’ Fees Award

The U.S. Supreme Court granted certiorari in John Wiley & Sons Inc. v. Kirtsaeng, No. 15-375 (cert. granted January 15, 2016). The issue in this case is the appropriate standard in awarding attorneys’ fees to a prevailing party under Section 505 of the Copyright Act.

There are currently four different standards used by district courts for awarding attorneys’ fees: (1) whether the prevailing party’s successful claim or defense advanced the purposes of the Copyright Act (9th and 11th Circuits); (2) a presumption in favor of attorneys’ fees for a prevailing party (5th and 7th Circuits); (3) the four “non-exclusive factors” listed in Fogerty v. Fantasy, Inc., 510 U.S. 517, 534 n.19 (1994) (3rd, 4th, and 6th Circuits); and (4) the 2nd Circuit’s placement of “substantial weight” on the objective reasonableness of the losing party’s claim.

In this case, a college student sought to win attorneys’ fees after defeating claims he imported and illegally sold foreign edition textbooks on eBay.  The case first reached the Supreme Court in 2013 where it was held that the Copyright Act’s first-sale doctrine applies to goods made anywhere.

As a result of the ruling, Kirtsaeng did not have to pay $600,000 in damages to Wiley for willfully infringing the company’s copyrights. However, Kirtsaeng lost his bid to obtain attorneys’ fees from Wiley, which lead to the present case.

Stay tuned for more information as the case develops.

Copyright FAQ: Who Has the Rights to a Collective Work?

Special copyright rules apply to collective works under the Copyright Act.  A collective work is defined as a work “in which a number of contributions, constituting separate and independent works in themselves, are assembled into a collective whole.” Common examples include magazines, academic journals, anthologies, and encyclopedias.  The articles, columns, or short stories that make up the collective work are referred to as “contributions to a collective work.”

The copyright in a collective work covers only the collective work as a whole (i.e., the order and organization of the entire magazine or encyclopedia). Thus, the copyright in each individual contribution is distinct from the larger work.

In the absence of an express transfer from the author of the individual article, the copyright owner in the collective work is presumed to have acquired only the right to use the contribution in the collective work and in subsequent revisions and later editions of the collective work. However, in many cases, authors submitting articles to magazines and journals must agree that they will not retain a copyright to the work once it is published as part of a collective work.

For individual advice on the copyrights to a contribution to a collective work, please contact me.

Supreme Court Will Review Claim Construction Standard

The U.S. Supreme Court granted certiorari in Cuozzo Speed Technologies, LLC v. Lee, U.S. No. 15-446 (cert. granted January 15, 2016).  There are two issues in this case.

The first issue is in regards to the claim construction standard used during Inter Partes Review (IPR) proceedings before the Patent Trial and Appeal Board (PTAB).  Currently, the PTAB construes the claims of an issued patent in an IPR proceeding according to their broadest reasonable interpretation.  This standard is different than the “plain and ordinary meaning” standard used in federal district court. The question is whether or not the PTAB is using the correct claim construction standard, or if it the claims should be interpreted according to their plain and ordinary meaning.

The second issue is whether or not the PTAB’s decision to institute an IPR proceeding is judicially unreviewable. In Cuozzo, the Federal Circuit held that 35 U.S.C. 314(d) bars it from reviewing a PTAB decision to institute an IPR, even if the issue is raised in an appeal of a PTAB final decision.

Stay tuned for more information as the case develops.

What Are the Most Important IP Protections for U.S. Businesses?

A recent survey reveals that most U.S. businesses view trademarks and trade secrets as the most important forms of intellectual property (IP) protection. The study was conducted by the National Science Foundation (NSF) and the U.S. Census Bureau as part of their Business R&D and Innovation Survey (BRDIS).

According to a NSF press statement, the survey polled a nationally representative sample of about 40,000 companies, including companies in both manufacturing and non-manufacturing industries. Here’s what else they had to say:

  • Fifteen percent of all businesses reported trademarks as either very important or somewhat important to their business (6 percent said trademarks were very important, while 9 percent said they were somewhat important).
  • Fourteen percent of surveyed businesses reported trade secrets as very important or somewhat important (6 percent and 8 percent respectively).
  • Twelve percent of those surveyed identified copyrights as important.
  • Five percent of respondents indicated that design patents are important, while four percent viewed utility patents as an important form of IP protection.

“Much of today’s business derives its competitive advantage from the ability to protect and exploit exclusive rights over investments in intellectual property,” said John Jankowski, lead author of the report in NSF’s National Center for Science and Engineering Statistics. “Hence, IP protection is a persistent and recurrent concern of businesses.”

Use of Discovery in Inter Partes Proceeding

The scope of discovery permitted during an inter partes review is different then discovery in an infringement action.
Under the Leahy-Smith America Invents Act, additional patent discovery is available for “what is otherwise necessary in the interest of justice.” As the Patent Trial and Appeal Board (Board) notes, this standard is “significantly different from the scope of discovery generally available under the Federal Rules of Civil Procedure.”
In Garmin Int’l Inc. v. Cuozzo Speed Technologies, LLC, Case No. IPR2012-00001 (PTAB March 5, 2013), Cuozzo Speed Technologies, LLC attempted to label all of its document requests and interrogatories as “routine discovery,” for which the Board’s authorization is not required. However, the Board strongly disagreed with this characterization, calling it unreasonably broad.
As explained by the Board, “Routine discovery under 37 C.F.R. § 41.51(b)(1)(iii) is narrowly directed to specific information known to the responding party to be inconsistent with a position advanced by that party in the proceeding, and not broadly directed to any subject area in general within which the requesting party hopes to discover such inconsistent information.”
In determining whether to grant a request for additional discovery, the Board stated that the following factors should be taken into consideration:

  • More Than A Possibility And Mere Allegation: The mere possibility of finding something useful, and mere allegation that something useful will be found, are insufficient to demonstrate that the requested discovery is necessary in the interest of justice.
  • Litigation Positions And Underlying Basis: The Board has established rules for the presentation of arguments and evidence. Thus, asking for the other party’s litigation positions and the underlying basis for those positions is not necessary in the interest of justice.
  • Ability To Generate Equivalent Information By Other Means: Information a party can reasonably figure out or assemble without a discovery request would not be in the interest of justice to have produced by the other party.
  • Easily Understandable Instructions: The questions should be easily understandable. For example, ten pages of complex instructions for answering questions is prima facie unclear.
  • Requests Not Overly Burdensome To Answer: The requests must not be overly burdensome to answer, given the expedited nature of Inter Partes Review. Requests should be sensible and responsibly tailored according to a genuine need.

When taking the factors above into consideration, the Board found that Cuozzo’s discovery requests failed to meet the “necessary in the interest of justice” standard. For instance, with regard to requested items related to its potential assertion of secondary considerations of nonobviousness (i.e., long-felt but unresolved need, failure of others, commercial success, and copying by others), the Board concluded that the company failed to provide a threshold amount of evidence or reasoning tending to show beyond speculation that the information to be discovered would be “useful.”