IP News

Bad Faith Not Necessary for Award of Attorneys' Fees for Willful Infringement

The Ninth Circuit held in Earthquake Sound Corp. v. Bumper Indus., 2003 U.S. App. LEXIS 25286 (9th Cir. 2003), that once there is a determination of willful trademark infringement, a separate determination of bad faith is not necessary in order to award attorneys' fees. The district court found that defendants' use of the term “Carquake” in connection with car stereos was a willful, deliberate and knowing infringement of plaintiff's trademarks “Bass-Quake” and “Quake,” and awarded attorneys' fees. On appeal, defendants argued that attorneys' fees could only be awarded in “exceptional” cases and that the district court did not consider evidence that the marks were used in good faith. The Ninth Circuit held that a court did not need to establish bad faith where there was sufficient evidence to establish willful infringement. “[Defendants'] claims of good faith are unavailing. The issue is not necessarily one of bad faith: willful or deliberate infringement will suffice.” The Ninth Circuit affirmed the district court's decision to award attorneys' fees.

Bill to Repeal Bar on Trademark Claims from Cuba

On Dec. 9, 2003, a bill (S.2002) was introduced in the U.S. Senate that would allow enforcement of trademarks associated with businesses confiscated by the Cuban government. Currently section 211 of the Omnibus Consolidated and Emergency Supplemental Appropriations Act of 1999 prohibits U.S. courts from enforcing a trademark connected to a business confiscated by the Cuban government, unless the original owner or bona fide successor gives permission to use the trademark. The new bill was introduced as a result of the dispute between Bacardi Co. and a French company, Pernod Richard, S.A., over the right to use the trademark “Havana Club,” whose distillery was confiscated by the Cuban government in 1960. When the United States refused to enforce the French company's trademark under section 211, Cuba and the EU complained to the World Trade Organization (WTO) that section 211 violated the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). The WTO's appellate body issued a ruling in favor of the EU's claim. The bill, S.2002, has been referred to the Senate Judiciary Committee for comment and discussion. The text of the bill can be found at www.senate.gov under the “Legislation & Records” heading.

Purdue Patent for Painkiller held Unenforceable for Inequitable Conduct

In a closely watched case in the pharmaceutical industry, the Southern District of New York rendered patents protecting Oxycontin, a painkiller, unenforceable. Purdue Pharma, L.P. v. Endo Pharmaceuticals, Inc., 2001 U.S. Dist. LEXIS 10 (S.D.N.Y 2004). Purdue's patents covered a drug that required a drastically lower dosage level than what was available at the time of filing. Purdue initiated the suit against Endo and other generic drug makers that were attempting to produce the generic version of Oxycontin. The generic companies were found to infringe the patent, however the patents were held to be unenforceable due to inequitable conduct before the U.S. Patent and Trademark Office. The determination of inequitable conduct centered on the fact that the inventors had no scientific proof that the drug claimed in the patent application worked as the claims recited. The inventors, by studying dosages in related painkillers had a “mental insight” that the dosage would be less in Oxycontin. However, neither at the time of filing, nor after allowance, did Purdue have any evidence or procedures in place to determine that the dosage was less. Purdue argued that a mental discovery was as valid as a discovery made in a laboratory; however, the court held that the definitive statements of discovery used in the prosecution history were misrepresentations of what was actually invented.

After using the “what a reasonable patent examiner would find material standard” to find materiality, the court focused on whether there was intent to mislead the Patent Office. While Purdue argued that it believed in good faith that it had invented the drug as the claims recited, the court held that this belief “did not entitle [Purdue] to deceptively withhold from the PTO that it did not have any 'scientific proof' to support its discovery, or even a method or procedure in place for proving its discovery.” This coupled with documents that disclosed the inventors stating that the claims were just a “theory” even after the patent has issued, led the court to find the patents unenforceable for inequitable conduct. Purdue has appealed the decision, but also faces antitrust probes from the Connecticut Attorney General who claims that Purdue may have prevented the development of cheaper Oxycontin alternatives.

Injunction Issued Against Unauthorized Show of Sinatra's Life

Frank Sinatra's family and estate sued the producers of an unauthorized tribute show titled “Sinatra: The Main Event.” The show was performed in Atlantic City and Las Vegas. Sinatra's family argued that “Sinatra: The Main Event” had been the title of an authorized television program during Frank Sinatra's life and that the public would be confused into thinking it was an authorized show. The defendants argued there would be no confusion because the word “unauthorized” was used in the show's billing, but Sinatra's family countered by saying that “unauthorized” was in such small print that even with the use of the word, the public would still be confused. A Los Angeles jury and judge agreed, and awarded damages to the family, and issued a permanent injunction against the show.

Bad Faith Not Necessary for Award of Attorneys' Fees for Willful Infringement

The Ninth Circuit held in Earthquake Sound Corp. v. Bumper Indus., 2003 U.S. App. LEXIS 25286 (9th Cir. 2003), that once there is a determination of willful trademark infringement, a separate determination of bad faith is not necessary in order to award attorneys' fees. The district court found that defendants' use of the term “Carquake” in connection with car stereos was a willful, deliberate and knowing infringement of plaintiff's trademarks “Bass-Quake” and “Quake,” and awarded attorneys' fees. On appeal, defendants argued that attorneys' fees could only be awarded in “exceptional” cases and that the district court did not consider evidence that the marks were used in good faith. The Ninth Circuit held that a court did not need to establish bad faith where there was sufficient evidence to establish willful infringement. “[Defendants'] claims of good faith are unavailing. The issue is not necessarily one of bad faith: willful or deliberate infringement will suffice.” The Ninth Circuit affirmed the district court's decision to award attorneys' fees.

Bill to Repeal Bar on Trademark Claims from Cuba

On Dec. 9, 2003, a bill (S.2002) was introduced in the U.S. Senate that would allow enforcement of trademarks associated with businesses confiscated by the Cuban government. Currently section 211 of the Omnibus Consolidated and Emergency Supplemental Appropriations Act of 1999 prohibits U.S. courts from enforcing a trademark connected to a business confiscated by the Cuban government, unless the original owner or bona fide successor gives permission to use the trademark. The new bill was introduced as a result of the dispute between Bacardi Co. and a French company, Pernod Richard, S.A., over the right to use the trademark “Havana Club,” whose distillery was confiscated by the Cuban government in 1960. When the United States refused to enforce the French company's trademark under section 211, Cuba and the EU complained to the World Trade Organization (WTO) that section 211 violated the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). The WTO's appellate body issued a ruling in favor of the EU's claim. The bill, S.2002, has been referred to the Senate Judiciary Committee for comment and discussion. The text of the bill can be found at www.senate.gov under the “Legislation & Records” heading.

Purdue Patent for Painkiller held Unenforceable for Inequitable Conduct

In a closely watched case in the pharmaceutical industry, the Southern District of New York rendered patents protecting Oxycontin, a painkiller, unenforceable. Purdue Pharma, L.P. v. Endo Pharmaceuticals, Inc., 2001 U.S. Dist. LEXIS 10 (S.D.N.Y 2004). Purdue's patents covered a drug that required a drastically lower dosage level than what was available at the time of filing. Purdue initiated the suit against Endo and other generic drug makers that were attempting to produce the generic version of Oxycontin. The generic companies were found to infringe the patent, however the patents were held to be unenforceable due to inequitable conduct before the U.S. Patent and Trademark Office. The determination of inequitable conduct centered on the fact that the inventors had no scientific proof that the drug claimed in the patent application worked as the claims recited. The inventors, by studying dosages in related painkillers had a “mental insight” that the dosage would be less in Oxycontin. However, neither at the time of filing, nor after allowance, did Purdue have any evidence or procedures in place to determine that the dosage was less. Purdue argued that a mental discovery was as valid as a discovery made in a laboratory; however, the court held that the definitive statements of discovery used in the prosecution history were misrepresentations of what was actually invented.

After using the “what a reasonable patent examiner would find material standard” to find materiality, the court focused on whether there was intent to mislead the Patent Office. While Purdue argued that it believed in good faith that it had invented the drug as the claims recited, the court held that this belief “did not entitle [Purdue] to deceptively withhold from the PTO that it did not have any 'scientific proof' to support its discovery, or even a method or procedure in place for proving its discovery.” This coupled with documents that disclosed the inventors stating that the claims were just a “theory” even after the patent has issued, led the court to find the patents unenforceable for inequitable conduct. Purdue has appealed the decision, but also faces antitrust probes from the Connecticut Attorney General who claims that Purdue may have prevented the development of cheaper Oxycontin alternatives.

Injunction Issued Against Unauthorized Show of Sinatra's Life

Frank Sinatra's family and estate sued the producers of an unauthorized tribute show titled “Sinatra: The Main Event.” The show was performed in Atlantic City and Las Vegas. Sinatra's family argued that “Sinatra: The Main Event” had been the title of an authorized television program during Frank Sinatra's life and that the public would be confused into thinking it was an authorized show. The defendants argued there would be no confusion because the word “unauthorized” was used in the show's billing, but Sinatra's family countered by saying that “unauthorized” was in such small print that even with the use of the word, the public would still be confused. A Los Angeles jury and judge agreed, and awarded damages to the family, and issued a permanent injunction against the show.