August 2004

Trademark Case: Jose Gaspar Gold

IN RE CHATAM INTERNATIONAL INCORPORATED (Fed. Cir. 2004) (Trademark Case)

The Federal Circuit (RADER with CLEVENGER and SCHALL) affirmed the TTAB’s decision to refuse to register the mark JOSE GASPAR GOLD in connection with tequila because of a perceived likelihood of confusion with GASPAR’s ALE.

Although the two names had only GASPAR in common, the court found that the other terms could be disregarded from the analysis because 1) ALE is generic; 2) GOLD establishes premium quality rather than name recognition; and 3) JOSE simply reinforces GASPAR as a name.

The court also supported the Board’s finding of a close relationship between tequila and beer or ale.

In this case, as in Majestic Distilling, the Board correctly determined that tequila and beer or ale are inexpensive commodities that consumers would be unlikely to distinguish by manufacturer.

China’s Competitive Advantage

Link: At least in the DVD market, Chinese companies are being forced to respect patent rights — and thus losing their competitive advantage.

According to Chen Xiang, secretary of the branch of the audio and video products of the [China Chamber of Commerce], the charge of patent fees, which weakened the products’ export competitiveness and eroded their profit margin, led to [a] decrease [in exports].

Federal Circuit: Lack of Enablement Affirmed

img044
ELSTER ELECTRICITY v. SCHLUMBERGER (Fed. Cir. 2004) (NONPRECEDENTIAL)

In this appeal of a summary judgment of invalidity for lack of enablement, the Federal Circuit affirmed.

Elster’s patent relates to a power supply of an electric energy meter that uses a specialized transformer. (U.S. Patent 5,457,621). At the district court, the judge found that the patent lacked enablement because the specification only enabled a “controller that responds to the third winding,” while the claim required a response to the “second winding.” Elster appealed, but the Appellate Panel affirmed, holding that the “written description fails to teach a response between the second and third winding, the district court ccorrectly concluded that [the] claims … were not enabled.”

Patent Explosion

The past twenty years has seen increadible increases in the number of patents both applied for and issued. In her most recent paper (PDF), Berkeley professor and empirical whiz, Bronwyn Hall, examines patenting data and arrives at some interesting conclusions.

1) Although patenting has increased in most technological fields, the explosive growth is largely accounted for by electrical and computing fields.
2) The explosion is drivin, for the most part, by U.S. firms, with some contribution from Asia and Europe.
3) Patenting has become a critical signal of viability for new entrants in many industries.

Professor Hall’s data shows that in most industries, increases in patenting were drivin by new entrants. However, patenting increases in electrical and computing industries were accomplished by a shift in patenting by industry stalwarts.

The figures reveal the following interesting fact: although the jump in patent applications within the U.S. occurred in all technology classes, when we look by broad industry class, we find that it occurred only in firms that are in the electrical, computing and instruments industries. That is, the increase in chemicals, mechanical and other technologies appears to have been driven by increasing patenting activity by firms that were not traditionally in these industries. This result is consistent with the view that there has been a major strategic shift in patenting in the electrical/computing industries, but not in other industries.

UPDATE: Professor Hall provided a correction to my original interpretation of her results. She interprets her results as showing “that patents held by new entrants in the electrical and computing industries became more valuable post-1985 than those held by incumbents, whereas there was no change in the chemicals-based sectors.”

According to Hall, new entrants need patents to as a basic proof of concept or a show of viability. Incumbents, on the other hand, often use patents defensively to ward off litigation and for cross-licensing. Thus, for an incumbent, a large patent portfolio may be an indication that it fears being sued for infringement.

ResQNet.com v. Lansa: Subpoena Quashed

img043
InventBlog: In an infringement case involving software for remotly downloading information (screen recognition and terminal emulation), a SDNY court recently quashed the defendant’s motion to depose the attorney who drafted and prosecuted the patent applications. In its decision, the court applied 2nd Circuit law disfavoring depositions of opposing counsel.

Lansa wanted to depose Mr. Kaplan on the prosecution of the patents, his communications with the Patent Office, prior art on the software and draft patent applications. It argued that the law of the Federal Circuit should apply.

Judge Sweet said that in “procedural issues not unique to patent law,” the Federal Circuit defers to the regional circuits.

The Second Circuit, he said, disfavors depositions of opposing counsel because they risk disrupting the attorney-client relationship and impeding litigation.

Comment: If this decision holds, it may push more patent litigation to botique firms that both prosecute and litigate patents.