It’s not just the holiday season, it’s also H-1B season

This post is more about the “business” than the “intellectual property,” but I thought that IP Spotlight readers would be interested in a recent blog post by my partner Catherine Wadhwani, who reminds tech companies and other employers that hire talented foreign professionals who may need H-1B sponsorship about an upcoming deadline for filing H-1B petitions.

Companies who are hiring (or who plan to hire) a foreign professional should be aware that the timing of a cap-subject H-1B petition is extremely sensitive. The time to file an H-1B-cap subject petition is fast-approaching and it’s best to be prepared.

For more information, here is a link to Catherine’s post discussing the upcoming “H-1B cap season”.

License agreement tips: pay attention to the definition of “affiliate”

When licensing a patent, software, copyrightable work or other intellectual property, it’s common for the agreement to license the property to a particular entity and its “affiliates.” The agreement may define the term “affiliates.” But are the parties always sure that the definition includes all parties that they actually intend to include?

Following on the heels of a recent, similar decision from United States District Court for the Central District of California, the Court of Appeals of the State of New York held that a license granted to an entity and its “affiliates” is limited to affiliates that were in existence on the effective date of the license agreement, unless the agreement expressly states otherwise.

Although the licensee typically benefits when the agreement contains a broad definition of affiliates, the new case is unique because it shows that a licensor can also benefit from a broader definition in certain situations.

The New York case, Ellington v. EMI Music, Inc., involved the terms of a royalty provision found in a 1961 copyright renewal agreement between the legendary musician Duke Ellington and a group of music publishers, Continue reading

Patent-eligibility after Alice: a summary of decisions that found software inventions eligible for patenting

Since the June 2014 U.S. Supreme Court decision in Alice Corporation Pty Ltd. v. CLS Bank Int’l, at least 16 district court decisions, at least three Federal Circuit decisions, and a number of Patent Trial and Appeals Board (PTAB) decisions have overturned software and business method patents under the new patent-eligibility standard of Alice.

While many of the cases explained why the specific claims failed to satisfy patent-eligibility requirements, for the most part the cases provided little guidance to help the patent community identify what types of claims would be patent-eligible. The USPTO has promised to issue a guidance memo on this topic, but reports of the publication date of the memo have repeatedly moved that date forward.  Originally predicted to be published in August 2014, at the time of this writing the latest predicted publication date was December 2014.

In the interim, patent applicants can find some guidance in the handful of court and PTAB decisions that refused to overturn patent claims.  A summary of several of those cases, with links to the cases and patents, follows: Continue reading

Court finds that ambiguous assignment agreement does not break chain of title

It’s always important to ensure that intellectual property agreements are carefully drafted.  However, on rare occasions a court will see past a drafting error and interpret an agreement to match the apparent intent of the parties, even if certain language of the agreement may conflict with that interpretation.

This happened in a recent case from the Southern District of Indiana. In a consolidated order involving suits that GS CleanTech Corporation (CleanTech) brought against various defendants in that court, the defendants filed motions for summary judgment and asserted that CleanTech lacked standing to bring the suit because CleanTech had not established title to the asserted patents.

CleanTech acquired the patents from GS Ethanol Techs. Inc. (GSET) and other entities by an assignment agreement dated May 15, 2009. The defendants asserted that the chain of title in the patents was broken by a January 2008 Security Agreement in which GSET and the other owners conditionally assigned the patents to YA Global Investments, L.P. (YA Global).

The defendants argued that although the document was titled “Security Agreement,” it was actually an assignment because of the grant clause conveyed “a continuing interest in the patents” to YA Global. The wording of the grant clause was immediate, the agreement was recorded against the patents, and so the defendants argued that the Security Agreement passed ownership of the patents to YA Global.

The court disagreed, stating that the remainder of the Agreement made it clear that the intent of the document was to grant “a continuing security interest in the patents” rather than actual title, even if the grant clause didn’t include that specific word.

Federal Circuit reverses course in Ultramercial v. Hulu; finds method of delivering advertisements to be an abstract idea

Yes or NoA method of providing advertising in connection with streaming media is not eligible for patenting, according to the latest decision of the Federal Circuit in the long-running Ultramercial v. Hulu patent saga.

Ultramercial’s patent claimed a method of distributing media over the Internet.  Claim 1 included eleven steps.  The steps described a process of associating ads with streaming media, allowing a consumer to access the media for free if the consumer first views the ad, and receiving payment from the advertiser after the consumer views the ad.

When the Federal Circuit first considered the claims in 2013, it found the claims to be patent-eligible. At the time, the court stated that ” it wrenches meaning from the word to label the claimed invention ‘abstract.'”  The court’s 2013 decision also stated that “the claim appears far from over generalized, with
eleven separate and specific steps with many limitations and sub-steps in each category.”

Fast forward to 2014, after the United States Supreme Court issued its decision in Alice v. CLS Bank.  The Alice decision established a two-part test for determining patent-eligibility: (1) Is the claim directed to an abstract idea? (2) If so, are there other elements in the claim sufficient to ensure that the claim amounts to significantly more than the abstract idea itself?

When faced with a new post-Alice appeal in the case, the Federal Circuit applied the new two-part test of Alice.  This time, the court reached a different conclusion Continue reading

IP Protection for Websites

33004976_sFor many businesses, a website is among the company’s most valuable intangible assets. A company’s website (or mobile site) serves as its front door, calling card, storefront, and corporate bio for actual and potential customers.

However, many businesses fail to protect this asset until it is exposed to risk. For example, small businesses who rely on a single employee or contractor to develop and maintain the site can face problems maintaining and updating the site if that employee or contractor relationship ends. Or, they may find a competitor copying the features that provide the most business value.  

What can companies do to avoid these issues?  Useful practices include:

  • Own the code.  Many companies hire outside contractors to design and maintain the company website. When doing this, it’s critical that the development agreement provide the company with rights to control, modify, copy and use the code — whether through ownership or license. A company who pays for software development typically does not have the right to copy, modify or distribute it unless the development agreement specifically says so.
  • Control the code.   It’s also important that the company receive copies of all developed code, even if the contractor is hosting the website. If the contractor fails to perform, loses a key employee, or simply starts to charge more than the company wants to pay, the company will find it impossible to go in another direction unless and until it has the  code. Too often, companies fail to include this requirement in their development agreements. Or if they do, they don’t enforce it until a problem occurs — at which point it may be too late.
  • Identify your trademarks.  A website is the first place that many customers will go to discover information about the company’s products or services. The names of many products and services may be trademarks, even if the company hasn’t registered the marks with the U.S. Patent and Trademark Office (USPTO). Although not legally binding, the use of a “TM” symbol with unregistered marks can help put others on notice of the words or phrases that a company considers to be its valuable trademarks.
  • Consider trade dress protection.  Trade dress protection, which is available under U.S. trademark law as well as state laws of unfair competition, covers the distinctive features of product’s physical appearance.  Several federal district courts, including those in Pennsylvania, CaliforniaLouisiana, Washington and Texas, have held that the overall “look and feel” of a website can be trade dress that is entitled to protection under the federal trademark statute.  To receive trade dress protection, the look and feel must (1) be distinctive, (2) have secondary meaning, and (3) be non-functional.
  • (Maybe) patent the unique features. Many websites contain unique functionality that can be considered to be a patentable invention under U.S. patent law.  While patenting software has become much more difficult in the wake of the U.S. Supreme Court’s decision in Alice v. CLS Bank, patent applications that claim  significantly more than just an abstract idea can still find success at the USPTO.

 (Image credit:  sssrrussia / 123RF Stock Photo)

Federal Circuit: Private entities do not infringe patent when performing “quasi-governmental actions”

31220041_sPrivate entities cannot be liable for patent infringement when performing “quasi-governmental actions” with the express or implied consent of the U.S. government, according to a recent decision of the U.S. Court of Appeals in Iris Corporation v. Japan Airlines Corporation (Fed. Cir. 2014).

Iris Corporation’s patent number 6,111,506 covered a method of making an identification document (such as a passport) with a contactless communication unit.  The case arose after Iris accused Japan Airlines Corporation (JAL)  of infringing Iris’ patent by scanning the electronic passports of its U.S. passengers.  Iris argued that by using and scanning passports that contain RFID chips, JAL infringed the patent.

At least two U.S. statutes required JAL to perform the scanning. Because of this, in its defense JAL argued that it could not be liable for infringement because its actions were required by federal law.  JAL also noted that 28 U.S.C. §1498(a)) states (with emphasis added):

Whenever an invention described in and covered by a patent of the United States is used or manufactured by or for the United States without license of the owner thereof or lawful right to use or manufacture the same, the owner’s remedy shall be by action against the United States.

The court agreed with JAL’s argument.  The court noted that an activity is “for the United States” if two requirements are met: (1) it is conducted “for the Government,” and (2) it is conducted “with the authorization or consent of the Government.”

The court found the first requirement to be satisfied because the scanning of passports was a “quasi-governmental activity” done for the benefit of the U.S. government.  The second requirement was satisfied because “JAL cannot comply with its legal obligations without engaging in the allegedly infringing activities.”

Because of this, the court dismissed the case and held that IRIS’s exclusive remedy is to file suit against the U.S. government, not any private entity.

(Photo credit: <a href=’http://www.123rf.com/profile_kritchanut’>kritchanut / 123RF Stock Photo</a>)