Blog

Trade Secret Protection (with Brewery and Distillery Considerations) By Dan Honz

May 4th, 2017

In general, a trade secret involves information that is not generally known to the public, confers some sort of economic benefit on the holder of the information, and is the subject of reasonable efforts to maintain its secrecy. What type of information can be a trade secret?  The federal Defense of Trade Secrets Act of 2016 defines the information as all forms and types of financial, business, scientific, technical, economic, or engineering information, including patterns, plans, compilations, program devices, formulas, designs, prototypes, methods, techniques, processes, procedures, programs, or codes, whether tangible or intangible, and whether or how stored, compiled, or memorialized physically, electronically, graphically, photographically, or in writing.

This covers a lot of potential items relevant to the Brewery and Distillery Industry, such as product recipes, unique brewing or distilling procedures or processes, client lists, distribution protocols, or other information that provides actual or potential economic value from not being generally known and not being readily ascertainable by proper means. For example, a brewing or distilling recipe usually involves known ingredients such as water, malt, hops, yeast, fruit, other sugars, wood type for barrel aging, etc.  The value derived from a recipe can be attributed to the ratios, sources, and treatment of those ingredients to produce a desired result – an alcohol whose composition is valuable to a producer and whose recipe provides an economic advantage, such as through market demand or production efficiencies.  Other valuable information can include failed results – results of lengthy and expensive research or experimentation which proves that a certain process will not work.  For example, the 39 prior attempts at the WD-40 formula.  As Thomas Edison mused, “I have not failed. I’ve just found 10,000 ways that won’t work.”

So what types of information are not subject to trade secret protection? Examples of non-trade secret information include: information in the public record, copyright registrations, assignments, and contact information filed with the U.S. Copyright Office, Trademark information filed with the U.S. Patent and Trademark Office upon filing, Patent filings that are published (patent filings generally become published within 18 months of being filed unless a request not to publish is made), published sales figures, salary figures, and annual reports, information on a company website or social media pages, SEC filings, etc.  There can be some give and take in determining the proper intellectual property considerations for any given facet of a business, such as brand differentiation versus proprietary trade secret recipes.  To what degree do I want to disclose how we differ from other brands, and in doing so, am I jeopardizing a different facet of IP protection, such as trade secret protection?

Part of the value of a trade secret involves its ability not to be readily ascertainable by proper means. The “proper means” to discovering a trade secret can pose an economic hurdle to competitors, such as through reverse engineering (which involves buying the product through the open market), independent invention, through a license with the trade secret owner, or other legal observations.

Dan Honz and Mallory Henninger will be presenting more Brewery and Distillery Law Intellectual Property topics at a CLE in Des Moines, Iowa on June 23, 2017. Link for registration: NBI CLE Seminar Registration Page

 

A CLAIM CAN BE CONSTRUED TO REQUIRE LIMITATIONS OF AN EMBODIMENT IN A PATENT’S SPECIFICATION

April 24th, 2017

The U.S. Court of Appeals for the Federal Circuit (CAFC) recently demonstrated how a patent’s specification can influence claim construction, particularly when broad and/or ambiguous claim terms are used. In MedCo v. Mylan, the CAFC found that Mylan’s abbreviated new drug application (ANDA) for a generic of MedCo’s ANGIOMAX® did not infringe MedCo’s U.S. Patent Nos. 7,582,727 and 7,598,343 because the specifications of the patents led the court to interpret the “batches” recitation of the claims at issue as requiring a different compounding process than the compounding process in Mylan’s ANDA.

The CAFC interpreted the “batches” recitation as requiring a compounding process that achieves a batch consistency (i.e., a “same compounding process”) for the “batches.” The CAFC further found that the compounding process had to be the “efficient mixing process” described in “Example 5” of the specification because “apart from efficient mixing, no part of the patents’ disclosure teaches another method capable of producing consistent batches.” MedCo v. Mylan, No. 2015-1113 at *14 (CAFC, April 6, 2017).  The CAFC noted that “Example 5 … is not merely the only disclosed embodiment of efficient mixing—it is the only description of efficient mixing in the patents in suit that casts light on what efficient mixing is and that enables one of ordinary skill in the art to achieve the objects of the claimed invention” (emphasis in original). MedCo v. Mylan, No. 2015-1113 at *23 (CAFC, April 6, 2017).  Because Mylan’s ANDA did not require the same process to generate batches of its generic drug, it was not found to infringe.

Nontraditional Trademarks

March 8th, 2017

Generally, trademarks are thought of as a word, phrase, or picture that identifies the source of a product or service. However, trademarks can also include shapes, sounds, flavor, and feel of a product.  Although more difficult to register, even the smell or scent of a product can be trademarked.  According to the Trademark Manual of Examining Procedure, the scent of a product may be registered if used in a nonfunctional manner, and the amount of evidence that a scent or fragrance functions as a mark is substantial. See TMEP §1202.13.

Hasbro recently applied for trademark protection for the scent of its Play-doh product. Most of us know the scent of Play-doh.  In its application, Hasbro described the scent as “a unique scent formed through the combination of a sweet, slightly musky, vanilla-like fragrance, with slight overtones of cherry, and the natural smell of a salted, wheat-based dough.”

Hasbro’s trademark application shows that businesses are increasingly protecting their intellectual property. As long as the mark is nonfunctional and distinctive, a business can obtain trademarks other than the usual word or graphic marks.

Hasbro’s application can be found here: Hasbro Trademark application.

Valentine’s Day 2017 – Patenting Love

February 14th, 2017

With today being Valentine’s Day, we consider the concept of love, which can have different meanings to different people around the world. Does such universal ambiguity leave love too abstract for consideration as patentable subject matter?  Here is an issued patent that brings love straight into the claims:

 

U.S. Patent No. 9,269,077 “Address book autofilter”

This AT&T patent provides a filtering mechanism for an address book with focus on connections with social networking sites. An individual’s contacts can be ranked according to interactions with the contact, where messages with affective terms can cause a contact to be ranked higher.  Claim 12 brings the romance, where a processor can parse messages between an individual and their contacts to determine when the affective terms are “indicative of meaningful relationships” and “wherein the affective terms are indicative of expressing love.”  How is a processor capable of discerning whether someone is expressing love?  The patent specifies that “[a]ffective terms and phrases may be predefined and stored, e.g., in the database 80 and/or user profile 115, and affective terms and phrases may include love, like, miss you, see you soon, along with other terms understood to show affection.”  Perhaps some people could benefit from the cold and calculated understanding of love by our machines.

 

Is the AT&T patent more romantic than this patent application for proposing marriage to an individual?  We’ll let you decide.

Crowdfunding Starts the Patent Clock Ticking

February 7th, 2017

Crowdfunding through websites like Kickstarter and Indiegogo is becoming an increasingly popular way to launch new products and businesses. These sites have been particularly valuable in helping startups launch innovative new products.  While crowdfunding can be an excellent opportunity for entrepreneurs to get market feedback and raise capital, it can have serious impacts on intellectual property rights.

Crowdfunding can damage your intellectual property rights because it constitutes a public disclosure, which starts the clock ticking for filing patent applications. If you do not file a patent application within one year of the date of first public disclosure, you have dedicated the invention to the public and lost the right to a patent.  Additionally, because the United States has a first-to-file patent system, inventors who crowdfund without first filing a patent application expose themselves to copying and knockoffs.  Crowdfunding also exposes you to counterfeiting of trademarks and copyrighted materials.

Exposure to infringement suits is another pitfall of crowdfunding. Even highly successful crowdfunding projects have been sued for patent infringement.  Additionally, use of trademarks and logos without proper vetting can result in cease-and-desist letters, lawsuits, and bad publicity.

We recommend seeking IP protection prior to starting a crowdfunding campaign. Filing a provisional patent application can be a low cost way to protect your patent rights, and federally registering your trademark or logo can be critical to protecting your branding strategy.  Further, proactive use of patent and trademark searching services can minimize your legal risk.  While crowdfunding can be a great asset to startups and inventors, we encourage you to take appropriate measures to protect your own IP rights and avoid infringing the rights of others.

CAFC Finds Claims to a Graphical User Interface Patent-Eligible Under 35 U.S.C. § 101

January 20th, 2017

 

In a recent decision, the U.S. Court of Appeals for the Federal Circuit (CAFC) affirmed a district court holding of subject matter eligibility for claims directed to a graphical user interface (GUI). In Trading Techs. Int’l., Inc. v. CQG, Inc., U.S. Patent Nos. 6,772,132 (the ‘132 patent) and 6,766,304 (the ‘304 patent) were under consideration.  In its opinion, the CAFC performed §101 subject matter eligibility analysis for claim 1 of the ‘304 patent, which recites:

1.    A method for displaying market information relating to and facilitating trading of a commodity being traded in an electronic exchange having an inside market with a highest bid price and a lowest ask price on a graphical user interface, the method comprising:

dynamically displaying a first indicator in one of a plurality of locations in a bid display region, each location in the bid display region corresponding to a price level along a common static price axis, the first indicator representing quantity associated with at least one order to buy the commodity at the highest bid price currently available in the market;

dynamically displaying a second indicator in one of a plurality of locations in an ask display region, each location in the ask display region corresponding to a price level along the common static price axis, the second indicator representing quantity associated with at least one order to sell the commodity at the lowest ask price currently available in the market;

displaying the bid and ask display regions in relation to fixed price levels positioned along the common static price axis such that when the inside market changes, the price levels along the common static price axis do not move and at least one of the first and second indicators moves in the bid or ask display regions relative to the common static price axis;

displaying an order entry region comprising a plurality of locations for receiving commands to send trade orders, each location corresponding to a price level along the common static price axis; and

in response to a selection of a particular location of the order entry region by a single action of a user input device, setting a plurality of parameters for a trade order relating to the commodity and sending the trade order to the electronic exchange.

 

Under step 1 of the Alice test (is the claim directed to a patent-ineligible concept, i.e., a law of nature, natural phenomenon, or abstract idea?), the CAFC agreed with the district courts finding that “rather than reciting ‘a mathematical algorithm,’ ‘a fundamental economic or longstanding commercial practice,’ or ‘a challenge in business,’ the challenged patents ‘solve problems of prior graphical user interface devices . . . in the context of computerized trading[] relating to speed, accuracy and usability.’” Trading Techs. Int’l., Inc. v. CQG, Inc., No. 2016-1616 at *6 (CAFC, January 18, 2016).  The district court had performed an Alice Step 2 analysis, although unnecessary if the answer to the inquiry of Alice Step 1 is “no.”  Regarding Alice Step 2, the CAFC stated that “district court’s rulings are in accord with precedent,” where the district court had “concluded that the specific structure and concordant functionality of the graphical user interface are removed from abstract ideas, as compared to conventional computer implementations of known procedures.” Id. at *7.

The CAFC concluded that “[f]or Section 101 purposes, the claimed subject matter is ‘directed to a specific improvement to the way computers operate,’ id., for the claimed graphical user interface method imparts a specific functionality to a trading system ‘directed to a specific implementation of a solution to a problem in the software arts.’” Id. at *9.  The CAFC decision in Trading Techs. Int’l., Inc. v. CQG, Inc. is favorable to software-related inventions that can be classified as specific improvements to the way a computer operates, e.g., increasing efficiency, accuracy, usability, etc.

 

Obviousness at the Federal Circuit

December 21st, 2016

In a recent Federal Circuit decision, In re NuVasive, Inc. (Fed. Cir. 2016), the Court remanded a Patent Trial and Appeal Board (“PTAB”) decision because the PTAB invalidated claims in a patent without articulating a reason why the cited prior art references would be obvious to combine.

Under 35 U.S.C. §103, a claim is invalid if the differences between the prior art and the claim could have been obvious to a person having ordinary skill in the art (“PHOSITA”) considering the issue at the time the invention was made. In KSR Int’l Co. v. Teleflex Inc., 550 U.S. 398 (2007), the U.S. Supreme Court held that the motivation to combine references need not be found expressly in the prior art itself, but may be explained by a fact finder using common sense.  The KSR Court additionally wrote that it can be important to identify a reason that would have prompted a person having ordinary skill in the art to combine the elements in the way the claimed new invention does.

According to the Court in NuVasive, “the PTAB failed to explain the reason why a PHOSITA would have been motivated to modify [the prior art]” and the Court could not “’reasonably discern’ the PTAB’s reasoning as to motivation to combine…”  This case illustrates that ensuring the Patent Office clearly articulates a reason to combine prior art references can be an effective tool for rebutting obviousness.

The opinion can be found here: In re NuVasive, Inc. (Fed. Cir. 2016).

IP Attaché Program: A Valuable USPTO Tool for Protecting U.S. Stakeholders Abroad

December 21st, 2016

The USPTO’s IP Attaché Program was recently featured by the Department of Commerce as being a valuable for U.S. businesses and stakeholders seeking to protect their IP interests abroad.  Serving at embassies, consulates, and missions in 14 locations around the world, the IP Attachés work to improve intellectual property systems internationally and help U.S. stakeholders navigate IP systems abroad.

IP Attachés work as advocates for improved IP policies, laws, and regulations abroad.  Attachés provide services such as raising IP issues with foreign government officials, providing IP training, conducting public awareness programs, and presenting and explaining U.S. government positions.  IP Attachés also provide services that benefit U.S. businesses and stakeholders directly.  For example, U.S. businesses seeking to enter foreign markets or conduct business abroad can contact Attachés for information on how to navigate foreign laws and regulations, how foreign courts and governments work, and how to protect and enforce IP rights abroad.

The IP Attaché Program is a valuable resource for U.S. businesses seeking IP protection abroad.  To read the complete article by the Department of Commerce, visit: https://www.commerce.gov/news/blog/2016/11/uspto-attaches-valuable-resource-us-intellectual-property-interests-abroad.  For general information on the IP Attaché Program, visit: https://www.uspto.gov/learning-and-resources/ip-policy/intellectual-property-rights-ipr-attach-program/intellectual.

USPTO Memorandum Regarding Recent Subject Matter Eligibility Decisions

November 8th, 2016

The USPTO has issued a memo regarding subject matter eligibility in light of the recent Federal Circuit decisions (including McRO). In summary, the memo sets forth that (1) an “improvement in computer-related technology” can be a set of “rules” that improve computer-related technology by allowing computer performance a function not previously performable by a computer; (2) several recent decisions discuss the role of preemption in eligibility analysis; and (3) examiners should not rely upon non-precedential decisions – https://lnkd.in/ekgUtPu

Tyson Benson

Supreme Court Decision will Impact Claim Strategy for Design Patent Applications

October 20th, 2016

          Typically the goal in any patent application is to claim your invention as broadly as possible in light of any existing prior art. In design patent applications, this means that an applicant should try to claim a minimal set of design features for a product the applicant is trying to protect. This approach makes sense because it allows the applicant to exclude competitors that would try to make variations on the product design in order to get around a patent. As long as a competitor product has the claimed design features, the competitor product will be deemed to infringe. The Apple v. Samsung legal battle has demonstrated the validity of this approach for design patent applications.

          Apple has been awarded approximately $400 million for Samsung’s infringement of design patents related to Apple’s iPhone. However, the U.S. Supreme Court heard oral arguments by Apple and Samsung on October 11, 2016 regarding the issue of whether or not the damages awarded to Apple were appropriate. The Supreme Court is considering an interesting question: “Where a design patent is applied to only a component of a product, should an award of infringer’s profits be limited to those profits attributable to the component?” Samsung’s position is that it only infringed design patents related to certain components of the iPhone and therefore should only be liable for any damages attributable to those components. U.S. patent law states that:

Whoever during the term of a patent for a design, without license of the owner, (1) applies the patented design, or any colorable imitation thereof, to any article of manufacture for the purpose of sale, or (2) sells or exposes for sale any article of manufacture to which such design or colorable imitation has been applied shall be liable to the owner to the extent of his total profit, but not less than $250, recoverable in any United States district court having jurisdiction of the parties.

35 U.S.C. § 289. Emphasis added.

          Samsung has essentially argued that an “article of manufacture” can be something less than the entirety of an infringed product. If the Supreme Court agrees with Samsung, applicants for design patent applications will have to balance competing interests. With a broader claim, a patent owner will still have greater right to exclude competitors; however, the patent owner’s ability to collect damages may become limited to components of a product that are covered by claimed design features. To preserve an applicant’s exclusionary rights while maintaining a higher potential for collecting damages, it may become advantageous for applicants to file multiple design patent applications with varying claim breadth.