Abstract: Federal Circuit patent jurisprudence has typically focused on Federal Circuit law and Federal Circuit precedent. However, recent Supreme Court decisions such as eBay v. MercExchange, MedImmune v. Genentech, MGM v. Grokster, and KSR Intl. v. Teleflex cases have challenged that default position. These cases represent a directive from the Supreme Court that the interpretation of patent law doctrine requires a consideration of history and doctrines that arise from other areas of law. In this essay, I examine the recent Federal Circuit decision of SEB v. Montgomery Ward and consider whether that case represents a shift in Federal Circuit jurisprudence toward an increased influence of non-patent considerations when deciding patent cases and patent issues.
In late 2009, The North Face sued its mocking upstart rival The South Butt for trademark infringement and dilution. South Butt is owned and run by a University of Missouri student James Winkelmann who, according to his attorney, “is just a great kid” being beaten-down by the system.
In his first opinion of the case, Judge Sippel has denied the South Butt’s motion to dismiss – finding it without merit. In a style the fitting of the case, the Judge also warned South Butt’s attorney that “[a]lthough [South Butt’s motion] may not reach the level of frivolity, it approaches the line.” In the media, South Butt has been framing the legal question of whether consumers can “tell the difference between a face and a butt.”
As Professor Chiang notes, the classic line from the decision may be “I do not find it to be implausible that the marks cannot cause a likelihood of confusion or dilution.” (Emphasis of negatives added).
In a pre-litigation letter, Winkelmann indicated that he would sell the company to the North Face for $1,000,000.
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THE NORTH FACE APPAREL CORP. v. WILLIAMS PHARMACY, INC., JAMES A. WINKELMANN, JR., and THE SOUTH BUTT. LLC., 2010 U.S. Dist. LEXIS 11157 (E.D. Mo. Feb. 9, 2010)
MEMORANDUM AND ORDER
It’s a strange world of language in which skating on thin ice can get you into hot water.
~ Franklin P. Jones
Plaintiff The North Face Apparel Corp. brings this lawsuit for trademark infringement and dilution against Defendants Williams Pharmacy, Inc., James A. Winkelmann, Jr., and The South Butt, LLC. The North Face is an outdoor equipment and apparel company with an international market. In 2007, Winkelmann launched The South Butt as an apparel company in Missouri. Williams Pharmacy is a retail pharmacy that carries The South Butt products.
In this lawsuit, The North Face seeks an order preliminarily and permanently enjoining the defendants from infringing and diluting The North Face trademarks by using or selling The South Butt products under a confusingly similar trademark. Defendants Winkelmann and The South Butt have moved to dismiss all counts for failure to state a claim. For the reasons set forth below, I will deny Winkelmann and The South Butt’s motion.
Background relevant to this motion
The North Face filed a seven-count complaint which contains the following counts: (1) Trademark Infringement under 15 U.S.C. § 1114; (2) Federal Trademark Dilution under 15 U.S.C. § 1125(c); (3) False Designation of Origin under 15 U.S.C. § 1125(a); (4) Contributory Trademark Infringement; (5) Common Law Trademark Infringement; (6) Common Law Unfair Competition; and (7) Violation of Missouri Anti-Dilution Statute.
The complaint begins with a three paragraph “introduction” that describes the history of The North Face, summarizes the nature of the claims, and describes The North Face’s “iconic” Denali jacket. The North Face refers to its “best-selling” and “iconic” Denali jacket in paragraphs 12, 15, 23, and 49. In paragraphs 15, 49, 50 and 52, The North Face alleges that it has trade dress rights in the Denali jacket and that Defendants are trading on its trademarks and trade dress.
The complaint also alleges that the Defendants willfully intended to trade on The North Face’s reputation and willfully caused dilution of The North Face’s trademarks. Another allegation in the complaint is that Defendants have misrepresented and falsely described to the general public the origin and source of Defendants’ products. Attached to the complaint as Exhibits H, I and K were press releases and news articles that quoted Defendants informing the media that their products are not affiliated with The North Face and indicating it is not their intent to infringe on The North Face’s trademarks.
Legal Standard
When ruling on a motion to dismiss for failure to state a claim, I must accept as true all factual allegations in the complaint and view them in the light most favorable to the plaintiff. . . . An action fails to state a claim upon which relief can be granted if it does not plead “enough facts to state a claim to relief that is plausible on its face.” Bell Atlantic Corp. v. Twombly, 127 S.Ct. 1955, 1974 (2007). To avoid dismissal for failure to state a claim, the complaint must contain “a short and plain statement of the claim showing that the pleader is entitled to relief.” Erickson, 127 S. Ct. at 2200. Although the specific facts are not necessary, the plaintiff must allege facts sufficient to give fair notice of what the claim is and the grounds upon which it rests. Id. “The plausibility standard requires a plaintiff to show at the pleading stage that success on the merits is more that an ‘sheer possibility.’ It is not however a ‘probability requirement.'” Braden v. Wal-Mart Stores, 588 F.3d 585, 594 (8th Cir. 2009).
Discussion
Winkelmann and The South Butt argue The North Face’s claims should be dismissed on two bases. Winkelmann and The South Butt argue that The North Face has failed to state a claim for trade dress infringement. 1 Winkelmann and The South Butt also argue that because the complaint contains attachments quoting their attorney and Winkelmann that are inconsistent with The North Face’s allegations, the complaint should be dismissed in its entirety.
1 In the prayer for relief, Winkelmann and The South Butt ask to the Court to strike all references to trade dress, but the motion is titled a motion to dismiss. Winkelmann and The South Butt’s argument appears to be under Rule 12(b)(6) and not under Rule 12(f). Therefore, I interpret their motion as one to dismiss a trade dress claim and not one to strike references to trade dress. If Winkelmann and The South Butt intended this filing as a motion to strike, I would deny their motion for the reasons stated in my order denying Williams Pharmacy’s motion to strike.
Trade dress
Winkelmann and The South Butt argue that The North Face has failed to state a claim for trade dress infringement because it has failed to plead what qualifies its alleged trade dress as distinctive or arbitrary with sufficient specificity to support the notion that those features are distinctive, nonfunctional and have secondary meaning. The North Face acknowledges that the complaint does not contain a count alleging trade dress infringement. As a result, I will deny as moot Winkelmann and The South Butt’s motion to dismiss the trade dress claim.
The complaint in its entirety
Winkelmann and The South Butt acknowledge that The North Face has pleaded the requisite elements to state a claim for relief. They argue, however, that the complaint should be dismissed in its entirety because the complaint contains attachments quoting Winkelmann and his attorney that are inconsistent with The North Face’s allegations and because a comparison of the marks shows that The North Face cannot possibly show a likelihood of confusion or dilution. The North Face argues that Winkelmann and The South Butt’s motion could be described as frivolous.
The complaint alleges that the Defendants willfully intended to trade on The North Face’s reputation and willfully caused dilution of The North Face’s trademarks and that Defendants have misrepresented and falsely described to the general public the origin and source of Defendants’ products. The attachments that Defendants deem fatal to The North Face’s complaint were press releases and news articles that quoted the Defendants informing the media that their products are not affiliated with The North Face and indicating it is not their intent to infringe on The North Face’s trademarks. The North Face correctly argues that the Defendants’ self-serving statements made in anticipation of this litigation are not an appropriate basis for a motion to dismiss. Whether Defendants’ statements are credible is an issue to be determined at a later time and not in a motion to dismiss.
Winkelmann and The South Butt also argue that the marks are so dissimilar that The North Face cannot possibly prevail. I do not find it to be implausible that the marks cannot cause a likelihood of confusion or dilution.
I remind counsel of their obligations under Rule 11 and that, with each filing, they certify to the Court that the motion is not being presented to harass, cause unnecessary delay or needlessly increase the cost of litigation and that the legal contentions are warranted by existing law or nonfrivolous arguments for extending, modifying, or reversing existing law or for establishing new law. Although this filing may not reach the level of frivolity, it approaches the line.
Accordingly,
IT IS HEREBY ORDERED that Defendants Winkelmann and The South Butt’s joint motion to dismiss is DENIED.
After the Federal Circuit’s 2006 en banc decision in DSU Medical, charges of inducing patent infringement were thought to require that the accused infringer have actual knowledge of the asserted patent. In its recent decision in SEB v. Montgomery Ward, the Federal Circuit rejected that conventional wisdom and instead held that “deliberate indifference” to the existence of a patent would be sufficient to support an inducement finding. Thus, “a claim for inducement is viable even where the patentee has not produced direct evidence that the accused infringer actually knew of the patent-in-suit.”
An interesting aspect of the recent SEB decision is the court’s use of non-patent and non-Federal Circuit cases to aid its interpretation of the law. Specifically, the decision relies on three cases that are decidedly non-patent: Farmer v. Brennan, 511 U.S. 825 (1994); United States v. Carani, 492 F.3d 867, 873 (7th Cir. 2007); and Woodman v. WWOR-TV, Inc., 411 F.3d 69 (2d Cir. 2005).
Farmer v. Brennan involved the question of whether an incarcerated pre-operative transsexual who projects female characteristics could be held in a men-only prison. The Supreme Court there held that a prison official could be liable for “deliberate indifference” to inmate safety. US v. Carani involved an appeal of a child pornography conviction and the Seventh Circuit ruled that the defendant’s knowledge of the child-status of the pornography was satisfied by the defendant’s deliberate avoidance of or indifference to the truth. Woodman v. WWOR-TV involved an age discrimination charge against FOX and noted that knowledge of a fact may be proven through evidence that the party “consciously avoided knowledge of what would otherwise have been obvious him.”
Interestingly, the cases cited above are not found in the appellate briefs. Rather, the SEB court’s concept of “deliberate indifference” was raised sua sponte by the Federal Circuit.
A Broader Jurisprudential Outlook: In the past, I have spoken with appellate attorneys who suggested that briefs to the Federal Circuit should almost exclusively cite to prior Federal Circuit patent cases. I wonder if this decision is indicative of a shift in the court’s jurisprudence. In recent cases such as eBay, MedImmune, and Grokster, the Supreme Court pushed the Federal Circuit to consider non-patent jurisprudence when deciding patent cases. In KSR, the Supreme Court also suggested that the Federal Circuit should not overly bind itself to doctrine. These bits of Supreme Court guidance suggest a broader jurisprudential outlook. Additionally, soon-to-be Chief Judge Rader has a penchant for drawing connections across doctrinal lines. It will be interesting see whether this case is a sign of a new era or perhaps simply an aberration.
Part of the SEB decision revolved around the question of induced infringement. Under 35 U.S.C. 271(b) “[w]hoever actively induces infringement of a patent shall be liable as an infringer.” The defendant argued that it could not have induced infringement because it had no actual knowledge of the patent. That argument is supported by the Federal Circuit’s 2006 holding in DSU Medical v. JMS that the “requirement that the alleged infringer knew or should have known his actions would induce actual infringement necessarily includes the requirement that he or she knew of the patent.”
In this case, the Federal Circuit further fleshed-out that requirement of knowledge after first suggesting that the quoted DSU Medical statement was dicta. “The facts of DSU Medical did not require this court to address the scope of the knowledge requirement for intent.” Despite the “knowledge” language of DSU Medical, the SEB court here held that “deliberate indifference” to potential patent rights is be sufficient to satisfy the knowledge requirement of inducement charges. Thus, “a claim for inducement is viable even where the patentee has not produced direct evidence that the accused infringer actually knew of the patent-in-suit.”
To be clear, the court made a distinction between “deliberate indifference” and a “should-have-known” standard.
At the outset, this court notes that the Supreme Court has indicated, in a different civil context, that “deliberate indifference” is not necessarily a “should have known” standard. Farmer v. Brennan, 511 U.S. 825, 840 (1994). The latter implies a solely objective test, whereas the former may require a subjective determination that the defendant knew of and disregarded the overt risk that an element of the offense existed. . . . For example, an accused infringer may defeat a showing of subjective deliberate indifference to the existence of a patent where it shows that it was genuinely “unaware even of an obvious risk.” More importantly, and as courts have observed in a variety of settings, the standard of deliberate indifference of a known risk is not different from actual knowledge, but is a form of actual knowledge. See, e.g., United States v. Carani, 492 F.3d 867 (7th Cir. 2007) (“Deliberate avoidance is not a standard less than knowledge; it is simply another way that knowledge may be proved.”).
Here, the Federal Circuit agreed with the district court that there was “adequate evidence to support a conclusion that [the Defendant] deliberately disregarded a known risk that SEB had a protective patent.” In particular, the Federal Circuit noted (1) that the defendant had copied SEB’s product; and (2) that the defendant hired a patent attorney to conduct a right-to-use study but did not tell the patent attorney that it had copied the SEB product; and (3) that the defendant’s president was well versed in US patent law. Taking these facts together, the court found “considerable evidence of deliberate indifference.”
A failure to inform one’s counsel of copying would be highly suggestive of deliberate indifference in most circumstances.
Today, the Antitrust & Competition Policy Blog is hosting a “Competition in Agriculture Blog Symposium.” Much of the focus will be on the interplay between antitrust and patent law in the world of genetically modified seeds.
LegalZoom has brought low-cost legal forms and legal filings to the masses.
LegalZoom offers a “provisional patent package” for $199. I have not tried their service, but the advertising indicates that the inventor completes a “simple online questionnaire” and LegalZoom then “create[s] your Provisional Application for Patent and file[s] it electronically with the U.S. Patent Office.” An extra $329 buys Attorney Review and Preparation.” Perhaps the most misleading aspect of their promotions is the discussion of “provisional patents.” Of course, there is no such thing as a provisional patent.
LegalZoom also offers to prepare a utility patent application (up to four pages of specification and ten claims) for $3788 and a design patent for $899. In both cases, legal zoom relies on “expert patent professionals” to provide “expert review, advice and suggestions for improvement.” At the same time, LegalZoom makes clear (repeatedly) that LegalZoom is not acting as your attorney.
In the past, Gene Quinn has written about LegalZoom alleging their unauthorized practice of law in both trademarks [here] and patents. Recently, LegalZoom has been sued in Missouri for engaging in the unauthorized practice of law. That case, however is based upon LegalZoom’s preparation of a “customized last will and testament.”
I would be interested in hearing comments regarding LegalZoom’s approach. Do any Patently-O readers work as patent attorneys for LegalZoom?
Edward Reines and Nathan Greenblatt have returned with an extension of their 2009 article on the proposed right of interlocutory appeals of claim construction. This new article considers the impact of the recent Supreme Court decision of Mohawk Industries, Inc. v. Carpenter as well as proposed modifications to the Patent Reform Act of 2009. Cite as Edward Reines and Nathan Greenblatt, Interlocutory Appeals of Claim Construction in the Patent Reform Act of 2009, Part II, 2010 Patently-O Patent L.J. 7 (2010). [Download Part II Reines.2010][Download Part I, Reines,2009]
Edward Reines and Nathan Greenblatt have returned with an extension of their 2009 article on the proposed right of interlocutory appeals of claim construction. This new article considers the impact of the recent Supreme Court decision of Mohawk Industries, Inc. v. Carpenter as well as proposed modifications to the Patent Reform Act of 2009. Cite as Edward Reines and Nathan Greenblatt, Interlocutory Appeals of Claim Construction in the Patent Reform Act of 2009, Part II, 2010 Patently-O Patent L.J. 7 (2010). [Download Part II Reines.2010][Download Part I, Reines,2009]
ResQNet.com and Jeffrey Kaplan v. Lansa, Inc. (Fed. Cir. 2010)
The district court held that one of ResQNet’s patents was infringed and awarded $500k in past damages based on a 12.5% royalty rate. The court denied the patentee’s requested permanent injunction but instead ordered an ongoing license at the 12.5% royalty rate. The court also awarded sanctions against ResQNet’s counsel for failing to withdraw patents from suit that were clearly not infringed.
On appeal, the Federal Circuit took issue with the damages calculation — holding that the lower court had “relied on speculative and unreliable evidence divorced from proof of economic harm linked to the claimed invention.”
This appellate decision should be seen as an extension of the Federal Circuit’s 2009 Lucent v. Gateway decision. The issue of sufficiency of expert testimony on damages has been brewing for some time. I remember sitting near Judge Rader (one of the authors of this opinion) and both of us listening to Northern District of California Judge Ron Whyte refer to economic damages experts as the “most intellectually dishonest witnesses” that testify in his court.
Hypothesize Rather than Speculate: The statutory minimum damages for patent infringement is a “reasonable royalty.” That calculation typically involves a “hypothetical negotiation” in an attempt to calculate the rate at which the patentee would have licensed the patent to the infringer prior to the infringement. Although the hypothetical negotiation is always involves guesswork, here the Federal Circuit reiterated the koan that the guesses must be based on evidence: “a reasonable royalty analysis requires a court to hypothesize, not to speculate.” Everyone understands that the arguments must have some evidentiary basis. Here, the real question was the type of evidence that can be applicable. In particular, the appellate court held that the only relevant evidence is evidence related to “compensation for the economic harm caused by infringement of the claimed invention.”
Past Royalty Rate Must be Tied to Invention: The first problem with ResQNet’s evidence was that it presented past ResQNet license rates that were not bare patent licenses. Addressing a similar issue, the CAFC wrote in its 2009 Lucentdecision that a reasonable royalty damage award “cannot stand solely on evidence which amounts to little more than a recitation of royalty numbers, one of which is arguably in the ball-park of the jury’s award, particularly when it is doubtful that the technology of those license agreements is in any way similar to the technology being litigated here.” Lucent. According to the appellate panel, ResQNet’s expert witness Dr. Jesse David “used licenses with no relationship to the claimed invention to drive the royalty rate up to unjustified double-digit levels.” The court indicated that experts need even more credible justification when the proposed royalty rate is much higher than might be expected.
Although the discredited prior licenses used by Dr. David were ResQNet licenses, those licenses were directed to the software code and re-branding rights but apparently did not specifically mention the patent number in suit and the evidence did not tie the licenses directly to the claimed invention. The appellate panel rejected these licenses as irrelevant to estimating royalty rate for the infringed patent: “In simple terms, the ’075 patent deals with a method of communicating between host computers and remote terminals—not training, marketing, and customer support services. The re-bundling licenses simply have no place in this case.”
The defendant Lansa did not offer any expert testimony on damages to counter Dr. David. However, that failure does not remove the patentee’s burden to properly prove its damages. “As a matter of simple procedure, Lansa had no obligation to rebut until ResQNet met its burden with reliable and sufficient evidence.”
Judge Newman writing in dissent argued that the appellate panel over-stepped its bounds:
This is not a case of constructing, and applying, a royalty rate from totally unrelated content; it is simply a case of determining the evidentiary value of the infringed subject matter by looking at the various licenses involving that subject matter, and allocating their proportional value, with the assistance of undisputed expert testimony.
In the district court, ResQNet’s damages expert Dr. David, a qualified economist with experience in the field, followed the traditional application of the Georgia-Pacific factors, analyzing the impact of all of these factors in an extensive Expert Report and in testimony at trial. He was subject to examination and cross-examination in the district court, and the district court provided a full and reasoned analysis of the evidence. No flaw in this reasoning has been assigned by my colleagues, who, instead, create a new rule whereby no licenses involving the patented technology can be considered, in determining the value of the infringement, if the patents themselves are not directly licensed or if the licenses include subject matter in addition to that which was infringed by the defendant here. In this case, the added subject matter was usually the software code that implements the patented method, as the district court recognized, and whose contribution to the value of the license was evaluated by the damages expert and discussed by the court. My colleagues’ ruling today that none of that information is relevant to the assessment of damages is unprecedented, and incorrect.
Judge Newman was a member of the Lucent panel and argues that the majority decision here is “distorting the principles” of that case.
Ongoing damages: The appellate panel did not consider the issue of ongoing damages (compulsory license) because that question was not appealed.
Sanctions: The appellate panel did reverse the imposition of sanctions on Jeffrey Kaplan’s firm. In its decision, the court noted (i) the untimeliness of the motion for sanctions; (2) Kaplan’s prompt withdrawal of one of the three patents-in-suit; and (3) the actual “litigation substance” concerning the patent that was only withdrawn at the last minute.
The French company SEB sued Montgomery Ward, Pentalpha and others for infringement of its patent covering deep-fat-fryer. Patent No. 4,995,312. SEB won a jury verdict verdict of willful infringement and was awarded $4.6 million in damages, but the district court reduced the damage award to $2 million and refused to award enhanced damages for willfulness citing Seagate.
f.o.b. sales: Pentalphia shipped its products f.o.b. China and argued that it therefore could not be liable for sales in the US. The Federal Circuit rejected that argument — holding instead that the US shipment destination and the intended US retail location were sufficient for a jury to find that the sales were within the US for the purposes of 35 U.S.C. 271. This decision follows the precedent of the 2008 Litecubesdecision. In Litecubes, the court held that a foreign company’s “sale” may properly be considered within the US if the seller deals directly with US customers and then ships to the US — regardless of whether title to the goods was legally transferred in another country.
Patent Attorney Expert: Noted patent attorney Charles Van Horn testified at the trial as expert witness explaining the infringement. Although he is not an expert on deep-fat-fryers, the Federal Circuit held that the lower court did not err in allowing his testimony:
District courts enjoy “wide latitude” to determine admissibility and “the mode and order” of evidentiary presentations. In this case, the district court was in the best place to judge that Mr. Van Horn had the “knowledge, skill, experience, training, [and] education” of a “specialized” nature that was likely to “assist the trier of fact to understand the evidence or to determine” infringement. Fed. R. Evid. 702.
In its decision, the appellate panel looked specifically at Van Horn’s 31 years at the patent office examining material-science related patents as well as his undergraduate chemistry degree.
The decision also discusses claim construction; infringement; prosecution history estoppel; and willfulness.
Intellectual Ventures (IV) is seeking a patent attorney who “loves fast-paced business action, is detail-oriented, independently motivated, and has the confidence and ability to interact with clients and co-workers in a professional, approachable, and positive manner.” (Bellevue Washington).
Intellectual Ventures (IV) is seeking a patent attorney who “loves fast-paced business action, is detail-oriented, independently motivated, and has the confidence and ability to interact with clients and co-workers in a professional, approachable, and positive manner.” (Bellevue Washington).
The graph below shows examiner experience as grouped by technology center as of the end of FY2009. The blue-bars represent the percent of examiners and SPEs that have fewer than three years experience at the PTO. The red-bars represent the percent of examiners and SPEs that have ten or more years experience at the PTO. This is a continuation of an earlier discussion.
A major reason for the current USPTO budget shortfall is the dropping rate of renewal. According to the USPTO annual reports, the "maintenance fees have traditionally been the largest category of patent fees." Renewal rates are charged in three-stages. The first-stage payment of $980 is due 3.5 years after issuance. The second-stage payment of $2,480 is due 7.5 years after issuance. And, the third-stage payment of $4,110 is due 11.5 years after issuance.
In FY2009 renewal rates dropped for each stage. Most troubling for future PTO revenue, the first-stage renewal rate for FY2009 was the lowest in a decade. The graph below is based on historic USPTO Annual Reports.
The US Patent Office has announced a “targeted effort to recruit patent examiners.” In particular, the Office is hoping to lure former examiners back to the office with the hope that experienced examiners can hit the job running with only a minimal amount of training. However, time-saving and efficiency are only part of the story.
As indicated in the graph above the percentage of patent examiners with fewer than three years of examining experience is at its highest level in recent memory. Almost 80% of patent examiners have fewer than three years examining experience. Less than 10% of the examiners have been working at the office for more than 10 years. In addition to efficiency, the overwhelming number of neophites threatens the professionalism and tradition of the Office. My hope is that the new hires will be leaders in the Office in addition to their role as more efficient examiners.
The drop in the percentage of experienced examiners (10+ years) from 20% to 7% over fiscal years 2004–2009 has two components. First, the absolute number of these experienced examiners dropped from 750+ to just over 400 based on attrition. At the same time, the total number of examiner rose from 3900 to 6500. The PTO is hopeful that some of these 350 examiners who left the office during the Dudas regime will now return.
Outside the Box Innovations, LLC v. Travel Caddy, Inc., (Fed. Cir. 2010)(order)
In a non-precedential order, the Federal Circuit has disqualified the law firm of King & Spalding from representing Travel Caddy on appeal. At the district court level, Outside-the-Box was successful in proving that Travel Caddy’s patent should be held unenforceable due to inequitable conduct. In post-verdict motions, a King & Spalding partner (Tony Askew) filed an expert witness declaration on behalf of a Outside-the-Box indicating that the requested attorney-fees were reasonable. For the appeal, however, three other King & Spalding attorneys began representing Travel Caddy on the other side.
Writing for a unanimous appellate panel, Judge Dyk indicated that King & Spalding’s actions are improper regardless of whether Askew’s expert work created an attorney-client relationship with Outside-the-Box. In particular, the court noted the likelihood that King & Spalding’s new client Travel Caddy will need to challenge the sufficiency of the expert opinion that it provided earlier.
The question whether King & Spalding should challenge the expert opinion of one of King & Spalding’s partners in our view would materially and adversely affect the firm’s representation of Travel Caddy on appeal. We determine that Rule 1.7(a) is applicable. There has been no showing that Travel Caddy waived the conflict pursuant to GRPC 1.7(b), even assuming that the conflict is one that can be waived. For example, there is no written waiver included in the submissions; there has been no showing that Travel Caddy “received in writing reasonable and adequate information about the material risks of the representation”; or that Travel Caddy was “given the opportunity to consult with independent counsel.”
The case was litigated in Georgia and the Federal Circuit based its decision upon the Georgia Rules of Attorney Ethics. It did not seem to matter that the King & Spalding appellate counsel were all Texas attorneys.
Patentees now proceed with caution when approaching a potential licensee. The Supreme Court’s 2007 MedImmune v. Genentech decision broadened the availability of declaratory judgment actions even when the potential licensee has no apprehension of suit. In a recent IP Today [$$$] article, Kristen Doyle provides five tips to help patentees avoid declaratory judgment jurisdiction:
File suit prior to sending a demand letter. (The suit typically need not be pursued for 3-4 months).
Send bland demand letters that avoid infringement allegations, threats of litigation, or even for licensing fees and that are signed by non-lawyers. Doyle could find not post-MedImmune decision that finds DJ jurisdiction based only on a letter that merely identified a patent and stated that the patent was available for licensing.
Establish a definite negotiation period.
Ask for a confidentiality agreement when negotiating.
Section 154(b) of the Patent Act includes an odd provision indicating that a "third party" may not appeal or challenge the USPTO's patent term adjustment determination prior to the patent issues:
35 U.S.C. 154(b)(4)(B): The determination of a patent term adjustment [PTA] under this subsection shall not be subject to appeal or challenge by a third party prior to the grant of the patent.
Although not a necessary conclusion, this provision prompts a negative implication that a the PTA may be subject to challenge by a third party after the grant of patent. Of course, the statute does not explicitly create that right.
As it stands, third party challenges to patent rights come in three forms: (1) interference proceedings; (2) inter partes and ex parte reexaminations; and (3) patent infringement litigation (including declaratory judgment actions). However, allegations of an improper PTA calculation do not create grounds for starting either an interference or reexamination. As discussed, improper PTA calculation could be the proper subject of a declaratory judgment challenge. However, by statute, it appears that that challenge is limited to instances when potentially infringing actions are occurring during the extension portion of the term.
All this leaves me confused as to why the provision is law.
In late 2009, The North Face sued its mocking upstart rival The South Butt for trademark infringement and dilution. South Butt is owned and run by a University of Missouri student James Winkelmann who, according to his attorney, “is just a great kid” being beaten-down by the system. 
The following is a list of upcoming events that I will be attending. I look forward to seeing you there!: 
Outside the Box Innovations, LLC v. Travel Caddy, Inc., (Fed. Cir. 2010)(