Miscellaneous IP Nuggets #9

  • The USPTO confirmed  that David Kappos will step down as the director for Patents in January, 2013.  This is very unfortunate since Kappos has been doing an outstanding job as commissioner. Kappos’ accomplishments include reduction of pendency,  an increase in quality  and professionalism.  Kappos is also to be remembered for his strong support for software patents.
  • By now most everyone is aware of the news that Hostess — the company that makes ‘Twinkies’ and other such foods — will be liquidated in bankruptcy. However, it appears that the intellectual property for the brand names and ingredient lists will be an important part of any liquidation. Might another company purchase the ‘Twinkie” trademark and trade secrets at auction? Stay tuned.
  • Chief Judge Randall R. Rader of the U.S. Court of Appeals for the Federal Circuit and his predecessor, Paul R. Michel, have recently made statements supporting the current patent system as enabling innovation and keeping the United States competitive.  Although the current system does have problems, the criticism by the popular press is almost always based on misconceptions and/or illogical conclusions.

Supreme Court Hears Case Involving First Sale Doctrine

A long standing principle of copyright law is that a purchaser of a copyrighted work has the right to resell the item without obtaining permission from the copyright owner.  So, it is permissible, for example, to resell a college text book at a used book store. This legal principle, known as the ‘first sale doctrine’ is codified in Section 109(a) of the Copyright Act.  However, Section 602(a)(1) of the Copyright Act, prohibits the importation of a work without the authority of the copyright’s owner – and the interplay between these sections of the Copyright Act is the issue in the  case Kirtsaeng v. John Wiley & Sons Inc., to be decided by the U.S. Supreme Court.

The facts are as follows: Supap Kirsaeng came to the United States as a college student in 1997. While in this country Mr. Kirsaeng started a side business importing from his native Thailand college text books which he then re-sold on Web sites such as eBay. For various reasons, publishers charge much less for books in developing countries such as Thailand than in the United States.  When publisher Wiley & Sons discovered Mr. Kirsaeng’s business, they filed suit in federal court alleging a violation of Section 602(a)(1) of the Copyright Act, whereas the defendant argued that he had a right to resell the books based on the first sale doctrine. The federal district court held for Wiley & Sons, and on appeal the same result. Kirsaeng then appealed to the  U. S. Supreme Court.

If Kirsaeng prevails, publishers such as Wiley & Sons will be less likely to supply books at discounted prices in Third World countries – and this would be unfortunate.

However, as some commentators have noted, if the decision is upheld, the case could have certain unintended consequences. For example, would it be unlawful to import a copyrighted work, such as a book or magazine? Should such items  be seized at customs when a person enters the U.S.?

In my opinion, any “solution” should be narrowly tailored, but it appears the real problem lies with the Copyright law.  Congress should address the issue and amend the Copyright Act to allow publishers to go after re-sellers but make exceptions for  importation of copyrighted material which is done for personal use.

Philadelphia Deli Sues Trademark Office Over Apostrophe

A deli in Philadelphia has filed suit against the U.S. Patent and Trademark Office over an apostrophe, claiming that its “Philadelphia’s Cheesesteak” is “so superlative,” so “gloriously gluttonous,” it could not possibly be confused with the generic “Philadelphia Cheesesteak.”

Campo’s Deli sued the U.S. Patent and Trademark Officer Director David Kappos in Philadelphia Federal Court. The deli applied for a trademark in 2009, was rejected in 2010, appealed, and were rejected again after an oral hearing in March of this year. The family says that they’ve been using the trademark since at least January 1, 2009 at four retail outlets, including the stadiums for the Phillies, the Flyers and the Sixers.

The Campos insist that their trademark request is valid given that it is specific to an exact variety and quality of sandwich. They say that their trademark “is not, in any sense, an attempt to improperly control the phrase ‘Philadelphia Cheesesteak.’” They acknowledge that the phrase without the apostrophe is a generic term used only to describe a type of sandwich.

The complaint went on to say that, “The difference in the two phrases, of course, is an (‘s), which demarcates a particular kind of gloriously gluttonous sandwich provided only by the plaintiff – not just a Philadelphia Cheesesteak, but ‘Philadelphia’s Cheesesteak.”

The family says that their attempt at a trademark is descriptive of a unique and “tremendously delicious” product and is not meant only as a geographic description of the product. They say that the mark will be used to allow the company to franchise; something that will be needed to demonstrate to customers that the brand is the very best example of what is otherwise a common, simple sandwich. The complaint was certainly creative, at one point saying that their product has such a “propensity for myocardial infarction that it could only be called ‘Philadelphia’s Cheesesteak.’”

The Campos do acknowledge that the Patent and Trademark Office has a point about similar trademarks having been issued in recent years. Three nearly identical trademarks have been issued which the Office has deemed too similar to the Campos’ proposed mark, these include: Philadelphia’s Cheesecake Co., Philadelphia Cheesesteak Co. and The Original Philadelphia Cheesesteak Co.

Though these may seem almost indistinguishable from the Campos’s mark, the family insists that there could be no confusion between the brands. This is because they claim the name is not about identifying the company, but instead identifying a special variety of an otherwise generic sandwich. They say that there’s no likelihood of confusion between the marks given that the other three companies produce wholesale sliced meat. “They have different products, different consumers, and entirely different avenues of commerce.” Whether that argument holds water remains to be seen, the case is currently awaiting an initial hearing.

Source:Deli sues feds for refusing to trademark its ‘Philadelphia’s Cheesesteak’,” by Michael Hinkelman, published at Philly.com.

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Inventor Claims Credit for Heinz’s “Dip & Squeeze”

The latest front in the battle over intellectual property rights involves a ketchup packet and who can lawfully lay claim to the honor of inventing the “Dip & Squeeze.” An employee of the Chicago Housing Authority has filed suit against one of the big boys in the ketchup work, H.J. Heinz Co., on the grounds that his invention was the basis the recently released ketchup packet introduced last year.

The man, Scott White, claims that he applied for a patent for his invention back in 2005 which was ultimately granted last month. The patent was supposed to be for a condiment container that gave the user (or dipper) the option of either squeezing out the contents or opening the top to access its contents.

White says that his creation was dubbed the “CondiCup” and was even pitched to Heinz at one point. White says he traveled out to the company’s Pittsburgh headquarters to show executives the product. Heinz has remained mum on the work they did or didn’t do with White.

It’s important to note that White’s creation is not exactly identical to the product marketed by Heinz. His creation was round and meant to fit into a car cup holder without spilling. Heinz’s contraption is in the shape of a very small ketchup bottle and is not meant to be put in a cup holder.

White acknowledges the differences, but says that the basic novelty of his CondiCup was copied by Heinz: the fact that the top can be opened two different ways, permitting squeezing onto a hamburger or dipping for fries. White says it is this exact feature that has been so heavily promoted by Heinz as a breakthrough for its Dip & Squeeze line of ketchup containers. White points to the company’s 2010 annual report which mentioned the “revolutionary design” of the new packet ahead of its launch. White also cited a 2011 press release discussing the packet which said the design took the company three years to develop. This happened two years after White first approached Heinz with the idea.

For its part, Heinz has remained quiet. A company spokesperson only had this to say, “Heinz will defend its position and demonstrate that the plaintiff’s allegations are groundless and without merit.”

Source:Suit claims Heinz stole idea for ketchup packet,” by Martha White, published at FoxNews.com.

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Chinese Counterfeiter Gets Life Sentence

In a recent case out of China’s Heyuan Intermediate People’s Court, Xiao Zhenjiang, the leader of a counterfeiting gang was sentenced to life in prison and all of his belongings and property were confiscated. The arrest happened after public security officials last year raided his factory in the small city of Heyuan, according to a statement on the court’s website.

Officials found 100 million yuan (about $15.7 million) worth of fake Hermes purses, the statement said. Three accomplices were sentenced to seven to 10 years in prison and were handed fines of 500,000 yuan to 800,000 yuan ($79,000 to $126,000). According to the court, Xiao was reportedly a repeat-offender and the gang was allegedly passing off the goods as genuine.

This case stands out due to both the severity of the sentences as well as the huge amount of counterfeit goods at stake. Legal experts said that the sentence is unusually severe, as the average criminal sentence handed to counterfeiters is three to seven years in prison.

Another reason that the decision is of interest is that the court chose to refer to the market value of the goods as if they were genuine, not the street price for the knockoff purses. This is something seldom seen in Chinese opinions and has important implications in terms of criminal sentencing as value determines whether prosecutors are interested in pursuing the case in the first place. The decision marks a major victory for brands that have been pushing for such a calculation of value for years and may be a sign that China is beginning to take counterfeiting seriously.

Given recent episodes of death and serious illness related to counterfeit pharmaceuticals and health products sentences for those behind the fake products have been increasingly severe. It’s rare however for such a sentence when the offender was primarily making counterfeit luxury goods.

Though the Chinese have often been accused of being soft on IP infringement, this latest example seems to run counter to that notion. Many Western observers hope that the severe penalties have the intended effect of reducing the rampant piracy that exists in China.

Source:Hermes counterfeiter gets life sentence in China,” by Laurie Burkitt, published at MarketWatch.com.

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