The Legal Intelligencer Blog

Lessons Learned From Christian Louboutin v. Yves Saint Laurent

By Anthony S. Volpe
Special to the Legal

The recent U.S. Court of Appeals for the Second Circuit decision in Christian Louboutin v. Yves Saint Laurent, Case number 11-3303, has lessons in it for trademark owners and trademark attorneys.

In the first instance, the decision to uphold the red sole trademark for Christian Louboutin may look like a tremendous victory, but on further review the potential for competitors to use colored soles with shoe uppers of like color exists. This, in the first instance, looks like a tremendous victory for Yves Saint Laurent. However, they both lost something from a trademark perspective. Red soles may or may not continue to have the same market cache for either of them. In addition, other competitors may begin to market shoes with colored soles and no one will have any special appeal because everyone has something “like it.”

The lesson for trademark owners is to be vigilant about policing valuable marks and be especially mindful of continuing the advertisement of the mark. Just relying on the presence of the mark in ads without pointing it out may lead to a passive view of the mark from consumers.

The lesson for trademark counsel is to be sure to remind the trademark owner about the need to police and advertise the mark. Also, trademark counsel should urge the trademark owner to pursue all available protection for valuable marks and to take all necessary steps to enforce any violation as soon as it is discovered.

The subject case is also interesting because both parties, Christian Louboutin and Yves Saint Laurent, are famous high-end fashion houses. One has to wonder what precipitated the current battle. From the outside, it never appeared as if there could be an actual winner and the baby split by the Second Circuit looks to be confirmation of that initial view. Any erosion of trademark value for one of these high-end fashion houses has to have an adverse effect on both of them.

Thus, the final lesson for trademark owners and counsel is to be careful of what you wish for and consider all angles before involving the court. The court may not see the matter through the same prism as you.

Anthony S. Volpe, a shareholder at Volpe & Koenig, has corporate and private practice experience in securing, licensing and enforcing all aspects of intellectual property rights. His patent work includes appeals before the USPTO Board of Patent Appeals and interferences and international trade commission, prosecution of patent applications, rendering opinions regarding patentability and enforcement of patent rights.

 

Fresh Ink: Inside Today's Legal

Welcome to your Wednesday morning round-up of stories in today’s edition of The Legal Intelligencer. All of the links below will take you directly to today’s stories, or you can head straight over to The Legal’s homepage. (Some stories may require registration or a paid subscription.)

The top story this morning is a judge rejecting a discovery request on former state Senator Vince Fumo in the First Judicial District’s legal malpractice lawsuit against its ex-attorney on the family courthouse project. As reporter Amaris Elliott-Engel writes, the request was for Obermayer Rebmann Maxwell & Hippel to answer questions on whether Fumo requested the firm compensate him for including state funds for a new courthouse in the state’s capital budget for public works projects.

Also above the fold on Page 1, reporter Saranac Hale Spencer writes that allegations that more than a dozen Lackawanna County employees were fired as “political retaliation” following the county’s shift to Democratic control after the 2007 election survived summary judgment in federal court.

Below the fold on Page 1, reporter Zack Needles writes that managing employee 401(k) plans could be dangerous for lawyers, as Philadelphia litigation firm Harvey Pennington recently learned when the U.S. Secretary of Labor filed suit against the firm alleging it mishandled employee contributions.

In more Regional News on Page 3, two New Jersey defense lawyers have been hit with ethics charges for their use of Facebook’s friend request tool.

As always, our People in the News section is on Page 2, and the top stories from our sister publications across the country make up the Page 4 National News section.

In an Intellectual Property column on Page 5, Anthony S. Volpe and Max S. Morgan write about applying patent teachings in products liability cases.

In this week’s GC Mid-Atlantic column on Page 7, Bruce Green and Jordan Thomas of Legal affiliate Corporate Counsel write about when a corporation’s lawyer can blow the whistle.

If you have questions or comments about any of today's stories, or our coverage as a whole, we invite you to e-mail any of the reporters directly. We hope you'll enjoy today's Legal.

NPE: The Scarlet Letters of Patent Ownership

By Anthony S. Volpe
Special to the Legal

The continuing outrage against patent owners deemed nonpracticing entities (NPEs, aka trolls) appears to be part of our schizophrenia over wanting an economy dominated by creative business types and hating the creative business models that foster that domination. It now appears that there are further factures in what should be deemed a bad NPE and what should be considered a good NPE. In a recent congressional hearing, there were distinctions made among patent owners that just buy patents, patents owners that may have done research for some patents and may buy other patents and university research that produces patents that are commercialized by technology transfer departments.

This same division over what should be done with patent portfolios finds its way into many commercial situations. Consider the growing swell of criticism for Kodak’s failure to monetize its patent portfolio before going into bankruptcy. If Kodak had exploited its patent portfolio against commercial entities making products that were not produced by Kodak, would it have been an NPE for those assertions or a creative company that found a way to monetize its patent portfolio and recapture some of its investment in research? Some argue that Kodak and its assertion targets were not competitors, so Kodak, in those circumstances, is acting as an NPE. Others argue that even if Kodak and its assertion targets were not competitors, Kodak has an obligation to shareholders to return value on the money spent on research, regardless of whether it makes an actual product that incorporates the patented technology. Others argue that Kodak is still an NPE because it does not fit the university model of pure research for the educational value of the work, and it cannot hide behind its commercial research efforts. Similar situations present themselves when Google buys Motorola Mobility patents or the Rockstar consortium – Apple, Microsoft, Rim, Ericsson and Sony – buys the Nortel patents.

Many of the same entities that complained about NPEs are now in the same category if the classification for the category is based on the patent owner not producing the product covered by the patent or patents. See the Rockstar website. What all of this really means is that the term is poorly defined and the definition depends on which side you are at a given time.

What seems to be lost in the debate is the fact that patents are property that was developed at a cost to someone. The availability of a market for that someone to recover that cost or even profit is what drives the research in many of the smaller entities that cannot sustain large research budgets. As for companies like Kodak, it is the very availability of the aftermarket for patent portfolios that gives shareholders the best hope of some recovery and, at the same time, causes shareholders to wonder why such a valued asset was not monetized before the company went into bankruptcy.

Anthony S. Volpe, a shareholder at Volpe & Koenig, has corporate and private practice experience in securing, licensing and enforcing all aspects of intellectual property rights. His patent work includes appeals before the USPTO Board of Patent Appeals and interferences and international trade commission, prosecution of patent applications, rendering opinions regarding patentability and enforcement of patent rights.

Fresh Ink: Inside Today's Legal

Welcome to your Wednesday morning round-up of stories in today’s edition of The Legal Intelligencer. All of the links below will take you directly to today’s stories, or you can head straight over to The Legal’s homepage. (Some stories may require registration or a paid subscription.)

Today’s top story is Saul Ewing opening a Pittsburgh office by bringing on four attorneys from Schnader Harrison Segal & Lewis. As reporter Gina Passarella writes, the office will fit into a market that has become sought after not just because of the Marcellus Shale and work relating to it, but because of all the shale play brings with it.

Also above the fold on Page 1, reporter Saranac Hale Spencer writes that U.S. Court of Appeals for the Third Circuit Chief Judge Theodore McKee said that a limit on lengthy briefs announced in January is working.

Below the fold on Page 1, reporter Zack Needles writes that a worked injured in a wall collapse has settled his lawsuit for $2.6 million with the general contractor, a subcontractor and the site owner.

Also below the fold on Page 1, Saranac Hale Spencer writes that the ACLU is seeking to block the state voter ID law.

In more Regional News on Page 3, reporter Amaris Elliott-Engel writes that as savings are stagnating, the First Judicial District has asked for more funding during a lengthy round of Philadelphia City Council budget hearings.

As always, our People in the News section is on Page 2, and the top stories from our sister publications across the country make up the Page 4 National News section.

In this week’s GC Mid-Atlantic column on Page 5, Gina Ameci writes about the challenging personalities to be encountered during employee performance reviews.

In an Intellectual Property column on Page 7, Anthony S. Volpe and Carey Kulp write about improving the likelihood that you own the IP rights to a property.

If you have questions or comments about any of today's stories, or our coverage as a whole, we invite you to email any of the reporters directly. We hope you'll enjoy today's Legal.

Supreme Court Invalidates Medical Treatment Claims as Unpatentable Subject Matter

By Douglas J. Bucklin
Special to the Legal

The U.S. Supreme Court’s March 20 decision in Mayo v. Prometheus invalidated patent claims when they invoke a law of nature but do not “confine their reach to particular applications of those laws.” The court discussed the following representative claim.

A method of optimizing therapeutic efficacy for treatment of an immune-mediated gastrointestinal disorder, comprising:

“(a) administering a drug providing 6-thioguanine to a subject having said immune-mediated gastrointestinal disorder; and (b) determining the level of 6-thioguanine in said subject having said immune-mediated gastrointestinal disorder,

wherein the level of 6-thioguanine less than about 230 pmol per 8x108 red blood cells indicates a need to increase the amount of said drug subsequently administered to said subject and

wherein the level of 6-thioguanine greater than about 400 pmol per 8x108 red blood cells indicates a need to decrease the amount of said drug subsequently administered to said subject.”

The two “wherein” clauses state a newly discovered correlation. Drug levels below 230 pmol per 8x108 red blood cells are insufficient and the amount of drug administered should be increased. On the other hand, drug levels above 400 pmol per 8x108 red blood cells are too high and the amount of drug administered should be decreased. The court stated that steps (a) and (b) were “well-understood, routine, conventional activity already engaged in by the scientific community; and those steps, when viewed as a whole, add nothing significant beyond the sum of their parts taken separately.” Thus, the claim attempted to patent a law of nature itself, without any restriction on how it is applied, and was invalid.

A patent claim will be invalid as directed to unpatentable subject matter if it recites application of a law of nature by well-understood, routine, or conventional activity previously engaged in by those in the field. This rule will hold even if the law of nature is newly discovered, and the remaining steps are concrete, tangible and useful – but previously engaged in by those in the field.

Going forward, claims applying a law of nature should separately recite method steps that are novel and non-obvious in the absence the law of nature. This should be done to frame application of the law of nature as restricted to the particular “inventive concept” embodied in the separately recited method steps.

Douglas J. Bucklin is an intellectual property attorney at Volpe & Koenig and provides clients strategies to secure and protect their intellectual property. He also advises clients on strategies to avoid or defend themselves against third-party intellectual property. His experience ranges in technical areas from biotechnology to genetics, pharmaceuticals, chemicals, food technology and medical devices.

Did Penn Law Mean to Upset Louis Vuitton?

By Anthony S. Volpe
Special to the Legal

The recent dust-up between University of Pennsylvania Law School and Louis Vuitton raises the question of motivation. Is it a matter of seeking free publicity or lacking attention to detail in drafting the invitation? The current flap surrounds Penn Law’s invitation to an upcoming fashion law symposium (full disclosure, I plan to attend) that LV believes misused elements of its famous trademark.

There is no dispute that LV’s mark is famous and that it is considered to be the source of high-fashion items. So, if we concede the issue of fame and recognize that the mark can be subject to dilution, the question becomes: How can this symposium dilute the mark’s fame? The focus of the symposium is the protection of high fashion – haute couture, if you will – and that is the exact space where LV is famous. So, one would suspect that people in that market space would recognize LV as an entity that will benefit from heightened awareness of the desire to protect high fashion. It does not look like a dilution issue to me.

There is no dispute that Penn Law is a top-notch school with some very brilliant faculty and students. So, if we concede that Penn Law’s students and faculty had the tools to draft a non-offending invitation, the question becomes: Why use a possibly offending invitation? Penn Law’s apparent purpose for holding a symposium on the protection of high fashion is to demonstrate its understanding of current copyright and trademark issues facing the fashion houses that provide the haute couture. It seems that easy solutions were available to avoid the problem. The invitation could have noted the actual ownership of trademarks and could have gone even a little further by noting that the trademark owners did not endorse the symposium. Because these actions, although possibly overkill, were available to Penn, one would conclude that it was an embarrassing mistake that should have never happened. Furthermore, I find it difficult to believe that part of LV’s brand expansion plan is to move into the space for legal seminars. This does not look like trading off LV’s famous mark.

This brings us back to LV’s motivation. I cannot see it as a need for publicity for what is an already famous mark. My guess is that it was a bit of an overreaction to make the complaint and it is now a bit of an embarrassment to LV.

To quote a famous, but unnamed musician, it is sometimes better to, “breathe in, breathe out and move on.”

Anthony S. Volpe, a shareholder at Volpe & Koenig, has corporate and private practice experience in securing, licensing and enforcing all aspects of intellectual property rights. His patent work includes appeals before the USPTO Board of Patent Appeals and interferences and international trade commission, prosecution of patent applications, rendering opinions regarding patentability and enforcement of patent rights.

Can the America Invents Act Deliver on Its Promise?

By Anthony S. Volpe
Special to the Legal

The initial driver for the America Invents Act was to create a stimulus for the American knowledge industry, create jobs and reaffirm American leadership in technology. The Judiciary Committee described the AIA purpose as follows:

Background on H.R. 1249, the America Invents Act: On September 16, President Obama signed into law the Leahy-Smith America Invents Act (H.R. 1249), a bipartisan, bicameral bill that updates our patent system to encourage innovation, job creation and economic growth. Both Houses of Congress overwhelmingly supported the proposal, which was sponsored by House Judiciary Committee Chairman Lamar Smith (R-Texas). The House of Representatives passed H.R. 1249 by a vote of 304-117 earlier this year. The Senate passed the bill by a vote of 89-9. Senator Patrick Leahy (D-Vermont) partnered with Chairman Smith on the legislation. Congressman Smith led the House efforts on patent reform for more than six years.

Much-needed reforms to our patent system are long overdue. The last major patent re-form was nearly 60 years ago. Since then, U.S. innovators have developed cell phones and launched the Internet. And yet the laws protecting the technologies of today are stuck in the past.

Our outdated patent system has been a barrier to innovation, unnecessarily delaying American inventors from marketing new products and creating jobs for American workers. It takes over three years to get a patent approved in the U.S. American innovators are forced to wait years before they can hire workers and market their inventions. Meanwhile, our competitors are busy developing new products that expand their businesses and grow their economies. This year, for the first time, China is expected to become the world’s number one patent publisher, surpassing the U.S. and Japan in the total and basic number of patents. We cannot expect America’s innovators and job creators to keep pace with the global marketplace with the patent system of the past. We need a system that ensures patent certainty, approves good patents quickly and weeds out bad patents effectively.

The Leahy-Smith America Invents Act is one of the most significant job creation bills enacted by Congress this year. The Act implements a first-inventor-to-file standard for patent approval, creates a post-grant review system to weed out bad patents, and helps the Patent and Trademark Office (PTO) address the backlog of patent applications. The enactment of H.R. 1249 is a victory for America’s innovators and job creators who rely on our patent system to develop new products and grow their businesses. The America Invents Act brings our patent system into the 21st century, reducing frivolous litigation while creating a more efficient process for the approval of patents. These reforms will help the innovators and job creators of today launch the products and businesses of tomorrow.

Congress acted on this legislation under the premise that our patent system was the cause of the lagging U.S economy. Now, the United States Patent and Trademark Office is dealing with the task of establishing regulations and practices to implement the new law. Considering the time it will take for the USPTO to establish them and the time for industry and the legal profession to sort them out and create a working environment, there remain real questions about whether the AIA can or will do anything to improve job creation or economic growth.

In the fight leading up to passage of the AIA, the warring sides were largely made up of multinational companies fighting over what provisions were best for them. There was little to truly address the domestic issues of job creation or economic growth.

Consider the following: The USPTO has an impressive display of many patents issued to Apple’s Steve Jobs – an impressive display that reflects brilliance, if not genius. However, the truth is Apple is not an engine of economic growth or the creator of jobs that are needed domestically. While Apple’s stock price tops $500 and it becomes the most valuable enterprise, its products are made in China and very few, if any, of the lower tech manufacturing jobs needed for domestic growth are available in this country.

Apple cannot be faulted for following the business model that the market demands. However, it is but one example of why patents are not and are not likely to be the engines Congress hopes for. Moreover, the number of U.S. patents granted to foreign nationals is increasing quickly. An effort to reverse that trend will require long-term rather that short-term fixes and lofty goals in the Congressional Record. Ultimately, the task of creating jobs will fall to the educational systems that train the next generations and governmental policies that encourage domestic investment over short-term returns.

Anthony S. Volpe, a shareholder at Volpe & Koenig, has corporate and private practice experience in securing, licensing and enforcing all aspects of intellectual property rights. His patent work includes appeals before the USPTO Board of Patent Appeals and interferences and international trade commission, prosecution of patent applications, rendering opinions regarding patentability and enforcement of patent rights.

Should Graduating College Students Attend Law School?

By Anthony S. Volpe
Special to the Legal

The January/February 2012 issue of The Pennsylvania Lawyer has an interesting debate on the pros and cons of law school for college graduates. While both sides make interesting arguments, it is my humble opinion that both sides missed a critical point. During my 35+ years in the legal profession, I have often been asked to speak with prospective law school students or newly minted lawyers about the profession. My advice almost always starts by asking the same questions: What do you expect from the law and what are you personal views and ambitions?

Whether you focus on the job market and financial aspects of a legal education or on the potential fame and fortune that may be available on the horizon, the decision is always a personal one. I have spoken with students, in both college and law school, who have unrealistic expectations of what follows law school graduation and passing the bar exam. It has been my practice to revert back to the two basic questions asked at the start of the conversation. For the uncommitted individual, the failure to land the prized job upon graduation or to attain the desired fame from the practice may define a life of failure. Conversely, an individual committed to the law may find an interesting position at a lesser salary provides the personal satisfaction one seeks in a professional life. Doing a job the right way may not win public acclaim, but it can be very rewarding.

I do not mean to suggest that students should not dream of future success or even wealth. Rather, it is my point that a focus on either money or fame, regardless of whether it is seen as a pro or con, begins the conversation from the wrong point. Since the ultimate decision to attend or not attend law school is highly personal, there needs to be a realistic assessment of the individual’s expectations and ambitions in view of the pros and cons of the legal profession. It is always possible that an individual may be disappointed in the decision; however, it is better to be disappointed in your decision than to have been steered in either direction by someone that may not take into account your personal views and ambitions. In many ways, this is the same advice we give our children about decisions throughout their lives: Actions have consequences.

Anthony S. Volpe, a shareholder at Volpe & Koenig, has corporate and private practice experience in securing, licensing and enforcing all aspects of intellectual property rights. His patent work includes appeals before the USPTO Board of Patent Appeals and interferences and international trade commission, prosecution of patent applications, rendering opinions regarding patentability and enforcement of patent rights.

At Issue: State Governments Interfering With Law School Clinics

By Anthony S. Volpe
Special to the Legal

The recent news report that Maryland Governor Martin O’Malley threatened the budget of the University of Maryland Francis King Carey School of Law because it filed suit against Perdue Farms Inc. and a chicken farm that supplies Perdue is troubling on all levels. Putting aside all merit considerations regarding the suit, there are no positives in the governor’s actions.

Law schools are charged with educating advocates for all sides of an issue and the decision to use the clinic program to advocate for a particular position should not be influenced by the potential that it could result in a loss of funding for the school. The only lesson that can be learned from such meddling is negative – powerful people or companies can apply pressures to bend and twist events to their advantage regardless of the law.

In addition to the harmful lesson this teaches at the law school, it reinforces the public perception that the law is manipulated by the rich and powerful. There is already too much distrust of the process and a public intervention by the state’s top official in a litigated matter can have no good outcome. The governor’s argument that he intervened to save a family chicken farm is unavailing. While it is commendable that the governor is protecting the welfare of the chicken farmer, the families down stream of the alleged pollution and the many users of the Chesapeake Bay are entitled to the same protection. Since there is an obvious dispute over the accuracy of the pollution charges, the matter is best settled by the courts.

There is no good that can come from politicians mixing in judicial issues, regardless of how pure the heart of the mixer.

Anthony S. Volpe, a shareholder at Volpe & Koenig, has corporate and private practice experience in securing, licensing and enforcing all aspects of intellectual property rights. His patent work includes appeals before the USPTO Board of Patent Appeals and interferences and international trade commission, prosecution of patent applications, rendering opinions regarding patentability and enforcement of patent rights.

Has Philadelphia Finally Hit Political Bottom?

By Anthony S. Volpe
Special to the Legal

The recent election of Thomas Nocella as a judge in the Philadelphia Court of Common Pleas was not unique in many ways. He was the Democratic Party candidate and Philadelphia is a largely democratic city. Nocella alleges he had provided years of free legal work for the party and that got him the backing of the Democratic Party boss, U.S. Rep. Bob Brady, which is a huge boost in a democratic city. As expected, the electorate supported the party candidate and Nocella won a judgeship. To that extent, it was very much a standard matter of a party loyalist being rewarded with party support. Nocella's candidacy was vetted by the Philadelphia Bar Association and he received a "recommended" rating. Nothing untoward there … or so it would seem.

However, Nocella has been sanctioned for ethics violations, and apparently admits that he accepted a $60,000 payment for signing a sales document when he was neither an officer of the selling organization nor even a member of the organization. This type of information, which was apparently ignored by the Democratic Party and the Philadelphia Bar Association in advancing his candidacy and recommending his election, gives true meaning to him "winning" a judgeship. It says nothing about earning the right to serve as a judge.

Party politics and the rewarding of loyalist are not bad or corrupt practices. However, ignoring the obligation to advance candidates that meet the job qualifications in training and ethics is a bad or corrupt practice. Likewise, the vetting process of the Philadelphia Bar Association must be reviewed to find and correct the flaw that allowed the recommended rating. I have no reason to suspect that there was any deal between the Philadelphia Bar Association and the Democratic Party to promote Nocella's candidacy, but it has that "something is not right" appearance, especially when the candidate so brazenly admits that it was purely a payback. Philadelphia has many fine jurists who should not be tarred by the election of a judge whose sole basis for being elected is, "That's the way it is done in Pennsylvania."

Politics is not a dirty business until people make it dirty. Philadelphia's political leaders need to raise the bar. Philadelphia cannot be seen as "corrupt and content" if it hopes to attract increased business investment and increasingly affluent residents.

Anthony S. Volpe, a shareholder at Volpe & Koenig, has corporate and private practice experience in securing, licensing and enforcing all aspects of intellectual property rights. His patent work includes appeals before the USPTO Board of Patent Appeals and interferences and international trade commission, prosecution of patent applications, rendering opinions regarding patentability and enforcement of patent rights.