Nerac Patent Attorneys Look To The Coming Year

As 2008 unfolds, expect to see some changes in intellectual property law, from the way the international community designs new intellectual property protection to new rules that the U.S. Patent and Trademark Office is trying to implement. As might be expected, some of the changes result from federal court decisions, while others could emerge from current litigation. Here are some of the issues that Nerac’s Intellectual Property Team is thinking about.

Consider new types of “non-traditional” trademarks and designs

As 2008 evolves, trademark offices around the world will be taking on new issues. Here are four issues that deserve attention.

The traditional notion of trademarks is changing, providing companies with new opportunities for innovative intellectual property protection and the marketing of associated goods and services. That’s because the international community is now considering new types of intellectual property protection that present an evolutionary leap forward for what companies and countries will seek to protect. Many of the world’s industrial nations have recently passed laws for trademarks for the registration of “non-traditional marks” such as three-dimensional marks, color marks, sound marks, scent marks, movement marks, hologram marks, slogans, or position marks.

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In pharmaceuticals, the WIPO and the World Health Organization (WHO) continue to discuss international nonproprietary names (INNs) for pharmaceutical substances, which are common generic designations of given pharmaceutical substances. Trademark offices around the world are attempting to clarify this grey area, because INNs should not be registered as trademarks. However, no mandatory regulations exist that require governments to refuse INN registrations. As a result, biotechnology and pharmaceutical companies should monitor and oppose foreign registrations, which might otherwise prevent marketing and sales within those nations during 2008 and beyond.

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State emblems and the names and abbreviations of international organizations need increased protection. Article 6 of the Paris Convention for the Protection of Industrial Property provides for governmental recognition of such protected items. The signs are not valid subject matter for trademark registration by private parties. Thus, organizations need to avoid seeking protection for marks that appear to be governmental in nature or abbreviations that would be classified as such and thus rejected by international trademark offices.

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Industrial design registration is also being considered, as the boundaries between other intellectual property regimes are increasingly blurring. Effectively, there needs to be a better understanding of the interface between marks, industrial designs and copyrights. Guidance from the World Intellectual Property Office (WIPO) should be forthcoming in 2008.

-Richard Lilley

Federal Court considers whether USPTO’s new rules should take effect

New USPTO rules limiting the number of continuing applications, requests for continued examination (RCEs), and claims that a patent applicant can make were supposed to go into effect in November. However, a lawsuit that Smithkline Beecham Corporation filed in October to have these rules enjoined stopped the USPTO from implementing them. The District Court for the Eastern District of Virginia granted Smithkline Beecham’s motion for a temporary restraining order and preliminary injunction until the case is resolved.

The new rules would limit an applicant to two continuations or continuation-in-part applications and one RCE after the first application. The new rules would also limit the number of claims to a total of 25, five of which can be independent. These changes would have been radically different from the old rules, which allow for an unlimited number of continuing applications, RCEs, and claims. The new rules would have forced companies to significantly change their strategies in filing for patent protection. Applicants would have had to narrow their inventions before filing and risk losing some protection, rather than file a broad application and narrow the invention claimed by filing continuing applications.

The court has yet to decide the underlying issues in this case, the outcome of which could potentially have a great impact on strategies of companies, large and small, in filing for patent protection.

-Jessica Kallipolites

New disclosure statement rules create a curious conundrum

In addition to the USPTO’s recent overhaul of patent rules—currently in litigation—the office also proposed changing Information Disclosure Statement (IDS) rules this year to require that attorneys and agents explain to examiners the relevance of prior art cited during patent prosecution.

However, attorneys and agents generally are reluctant to supply such information during prosecution, because what they say can and will be used against them in a court of law – only they don’t get Miranda warnings. That is because litigators can use those opinions to the applicant’s detriment.

As a result, attorneys and agents have to think very carefully before supplying the requisite opinions on the cited prior art. In fact, it may be preferable to gather brief explanations from the patent searchers retrieving the references to avoid being directly and legally bound by inadvertent admissions during patent prosecution with respect to the relevance of prior art.

If the proposed rules are imposed, look for patent search firms to offer the additional service of providing brief explanations of prior art as “one of ordinary skill.” This could save a great deal of time for agents and attorneys, who are expected to have fully read any reference they might supply.

-Scott Lloyd

Increased care needed to negotiate and draft patent licensing agreements

The Federal Circuit’s October 2007 decision in International Gamco v. Multimedia Games (http://www.cafc.uscourts.gov/opinions/07-1034.pdf ) will require taking greater care during negotiations and drafting of patent licensing agreements or during the drafting of patent infringement suits. Generally, patent owners or assignees have standing to pursue an infringement suit. Exclusive licensees and other entities with “all substantial rights” in a patent also generally have standing to sue in their own name.

However, merely holding an exclusive license to a portion or certain claims of a particular patent is not sufficient to claim “all substantial rights,” and therefore does not confer standing to sue. The court felt the decision was necessary to protect potential defendants from multiple suits from multiple licensees. It also felt that there had never been an intention to allow the temporarily monopoly of a patent to be subdivided into multiple mini-monopolies related to different portions of the patent.

Based on this decision, the parties to a licensing agreement will need to spend more time negotiating the extent and wording. Unwary licensees run the risk of paying for exclusive field of usage licenses only to find that they are at the mercy of the licensor as to whether an infringement suit will be actively pursued. Unwary licensors may find themselves involuntary joined as a party to a lawsuit.

In 2008 and beyond, expect a number of patent assignees to be involuntarily joined as parties to lawsuits, and expect other challenges to standing based upon claims the opposing party does not hold “all substantial rights” to a patent, such as exclusive licensing territory less than the whole of the United States or exclusive license of limited duration.

-Anthony Wilson