Drug company Allergan transferred its Restasis drug patents to a Mohawk tribe in upstate NY. Under the deal, Allergan paid the Indian tribe $13.75 million and agreed to further payment of $15 million in annual royalties while the patents were in force. In exchange, the tribe agreed to lease the patents back to Allergan and promised to claim sovereign immunity in any USPTO patent challenges. Under the law, Indian tribes possess inherent sovereignty; however, this sovereignty may be limited through treaty or federal statute. Additionally, Congress possesses plenary power over tribes, allowing it to alter or abolish tribal sovereignty at will. The US Supreme Court recently held that Indian tribes cannot use sovereign immunity to shield themselves from patent challenges brought within the USPTO. The court did not decide whether sovereign immunity claims could be used by states.
The Supreme Court recently granted a petition for writ of certiori in Helsinn Healthcare S.A. v. Teva Pharm. USA, Inc. The court will be asked to determine whether the Leahy-Smith America Invents Act (AIA) bars an inventor from selling to a third party when that third party has a duty of confidentiality to the seller. Such an “on-sale” bar would prevent the inventor or assignee from filing a patent for that invention.
Update: Supreme Court holds that that a secret sale qualifies as prior art.
Cancellation of a trademark registration does not extinguish common law trademark rights. If the owner continues to use the mark after abandonment or cancellation by the USPTO, that owner will still enjoy common law protections allowing for use within the current “zone of commerce.” While it may possible to register a canceled or abandoned mark, one should think carefully and research any potentially confusingly similar uses.
A hand bag company called My Other Bag (MOB) has been engaged in a long legal battle with Louis Vitton. The company claimed that MOB’s canvas tote bags depicting images of Louis Vitton bags was an infringing use of their copyrights and trademarks and was diluting their brands. The District Court for the Southern District of New York held that such use amounted to parody and was an acceptable use. The Second Circuit affirmed and the Supreme Court rejected Louis Vitton’s appeal.
In July 2016, Amazon submitted an application to trademark the blue rings that encircle the top of their Echo product. This type of trademark has been granted in the past and will turn on whether the general public associates these cyan rings with the voice-controlled speaker.
“Threatening” a potential infringer for acts performed in the UK will now be governed by a new Intellectual Property Unjustified Threats Act. The act took effect on October 1, 2017 and outlines “permitted communications” between potential adversaries in patent, trademark and designs. It should be noted that the act will not apply to copyright infringements, assertions of passing off or trade secret actions.
After two years of trying to secure the color yellow as a trademark, the TTAB has ruled that consumers do not necessarily associate a yellow box with Cheerios brand cereal
A recent Forbes article notes that nearly 1500 utility and plant patent applications have been filed since 1942. Half of those applications were filed in the last 25 years and there are 500 active patent applications for cannabis related products. The data shows that about half of these applications have been approved.
Written by: Hilary J. Sumner, Esq.
What is DTSA? The Defend Trade Secrets Act (DTSA) was signed into law on May 11th, 2016. This law creates the first federal civil remedy to address the misappropriation of trade secrets. Prior to the enactment of this law, civil trade secret actions were governed primarily by individual state unfair competition laws. These conflicting laws led to varying standards of protection and remedies to injured parties and non-uniformity created uncertainty as to best means to protect and defend trade secrets in interstate commerce.
The DTSA provides a robust and uniform protection for any trade secret that is related to a product or service used or intended for use in interstate or foreign commerce. It gives US district courts original jurisdiction over civil actions involving trade secret misappropriation, allowing the granting of an injunction, damages for actual loss, unjust enrichment and reasonable royalties. If the plaintiff successfully demonstrates that the misappropriation was willful or malicious, exemplary damages as well as reasonable attorney’s fees may also be awarded; but protections are offered to the defendant as well. If the defending party can demonstrate that a claim of misappropriation was made in bad faith, reasonable attorney’s fees may be awarded to the defense.
What qualifies as a Trade Secret? The certainty provided by this new legislation has prompted many companies to revisit their intellectual property profiles. Unlike patents, trade secrets do not need to be technical in nature to be deserving of protection nor do they need to be new, useful or non-obvious. A trade secret must only confer some economic benefit to the owner. That economic benefit cannot be derived from the information itself but from the fact that the information is not known to others.
In order to qualify for protection, the trade secret owner must take reasonable steps to keep that information a secret. The information cannot be generally known to the public or to others in the same industry or business. Customer lists, recipes, special manufacturing processes, marketing plans, and sales methods are all examples of items that may be protected by trade secret law. Coca-Cola provides a prime example of the power of a trade secret, holding their recipe in confidence since 1903. Unlike patent protection, trade secret protection can last indefinitely so long as the information remains undisclosed. It is important to note that a competitor is free to ascertain the trade secret through any lawful means including reverse engineering.
What is the Best Method for Protecting Trade Secrets? Companies should periodically audit their intellectual property portfolio and determine what qualifies as a trade secret. Once a trade secret has been identified, it should be recorded in a trade secret asset management system that will track and identify the appropriate level of protection needed for each trade secret. This system should also identify the person(s) in the organization responsible for safeguarding each trade secret. A policy should be created to periodically review each trade secret and the steps being taken to limit access and prevent unintentional disclosures. All employees with knowledge of the trade secret(s) should be trained in the proper disclosure and safeguarding and access to this information should be limited to those with a genuine need to know.
Contracts Involving Trade Secrets: Contracts involving trade secrets must also be reviewed. The DTSA provides immunity to employees reporting a suspected violation of law. Employers are required to provide notice of this immunity in any employee agreement governing the use of a trade secret or confidential information. Failure to include this immunity provision may result in the loss of exemplary damages and attorney’s fees.
Trade secrets have always provided a robust means of long term protection for intellectual property and the certainty of this protection will only increase with the introduction of DTSA. Those with trade secrets should take the necessary steps to make the most of this new legislation.
While copyright law will not protect utilitarian articles, it will protect the creative expression in making those articles. As a result, expressive culinary works may be protected by copyright law. Additional IP protections may also be available such as design patent, trademark and trade secret law.