IP News

Compiled by Jeffrey S. Ginsberg and Matthew Berkowitz

Federal Circuit Defines Boundaries of Lanham Act's 'Use in Commerce' Requirement

In Aycock Engineering, Inc. v. Airflite, Inc., No. 2008-1154, 2009 U.S. App. LEXIS 6590 (Fed. Cir. March 30, 2009), the Federal Circuit held that a service mark does not meet the “use in commerce” requirement of '45 of the Lanham Act when an applicant uses that mark in the preparatory stages of a service's development, but never offers the service to the public.

In the late 1940s, William Aycock began work on a service involving chartering flights in the air taxi industry, which at that time, commonly leased entire airplanes rather than individual seats. Aycock sought to initiate a service that allowed solo passengers to arrange flights without having to lease an entire plane. Aycock planned to act as a middleman between the customer and air taxi service operators, essentially coordinating flights for customers with similar travel plans. He planned to advertise this service using the name AIRFLITE. Several years after conceiving of this idea, Aycock formed a company, Aycock Engineering, invited virtually all air taxi operators to join his operation, and obtained two toll-free numbers that the public could use to make reservations.

Aycock filed a service mark application for AIRFLITE. During prosecution, Aycock stated that his service “is a communication service between persons desiring to charter aircraft and certified air taxi operators.” A registration for the AIRFLITE mark was granted on April 30, 1974, and subsequently renewed.

Despite his efforts, Aycock's operation never got off the ground. And while he advertised his AIRFLITE service to air taxi operators, he never marketed it to the general public or ever arranged for a single passenger to fly on a chartered flight.

In 2001, Airflite, Inc. filed a petition for cancellation of Aycock's AIRFLITE mark, alleging that Aycock Engineering did not use the mark prior to registration in connection with the services identified in that registration. The Trademark Trial and Appeal Board (“TTAB”) agreed with Airflite, Inc. and cancelled the AIRFLITE mark.

The Federal Circuit affirmed the TTAB's decision, holding that Aycock failed to use the AIRFLITE mark in commerce. The court opined that prior to 1989, a service mark applicant had to: 1) use the mark in the sale or advertising of a service and 2) show that the service was either rendered in interstate commerce or rendered in more than one state or in this and a foreign country by a person engaged in commerce. The court reasoned that this required an open and notorious public offering of the services to those for whom the services were intended, and that mere preparations to use that mark sometime in the future would not do. The court then determined that Aycock failed to meet the “use in commerce” requirement because he never used the actual service described in his registration, which related to arranging for the transportation of a person from one place to another. Instead, Aycock merely took preparatory steps in the form of attempting to build an infrastructure of air taxi operators that, when completed, could be offered to the public. Because Aycock failed to meet the “use in commerce” requirement, the court held his AIRFLITE mark void ab initio.

Judge Pauline Newman dissented, reasoning that the TTAB erred in interpreting the description of services in the registration as excluding the very services that were the basis of that registration. Judge Newman further opined that if a flaw in the registration was now discovered, after 35 years, it should be clarified and corrected, not voided ab initio.

Federal Circuit Rules on Timing of 'Patentably
Distinct' Determination for Double Patenting

In Takeda Pharm. Co., Ltd. v. Doll, No. 2008-1131, 2009 U.S. App. LEXIS 7679 (Fed. Cir. April 10, 2009), the Federal Circuit held that subsequent developments in the art may inform the “patentably distinct” determination for double patenting, but only to the extent that such subsequent developments predate the secondary application that triggers a double patenting rejection.

On Dec. 17, 1975, Takeda Pharmaceutical Co., Ltd. filed a U.S. patent application disclosing certain cephem compounds and the process for making those compounds. Takeda developed these new cephem compounds through an acylation process. The U.S. application claimed the benefit of a Japanese application filed on Dec. 19, 1974. Takeda obtained a number of patents claiming these compounds through a series of continuations, continuations-in-part and divisional applications. On Jan. 8, 1990, 16 years after the 1974 priority date, and 14 years after issuance of the first compound patent, Takeda filed a secondary application covering the acylation process for making the cephem compounds claimed in earlier patents. The process patent issued on Dec. 10, 1996 as U.S. Patent No. 5,583,216.

In 1998, the USPTO received two anonymous requests for re-examination of the '216 patent, each of which asserted that it was invalid for “obviousness-type” double patenting. The examiner rejected the '216 patent process claims as patentably indistinct from the product claims of one of the earlier compound patents on the grounds that the acylation process was the only known process for making the cephem compounds. The Board of Patent Appeals and Interferences (“Board”) affirmed the rejection. Takeda then challenged the Board's decision in the District Court for the District of Columbia and relied on a declaration by one Dr. Duggan, who declared that processes disclosed in patents published on or after Sept. 12, 2002 provided a viable alternative non-infringing process for making the cephem compounds claimed in the earlier product patents. The district court granted Takeda's motion for summary judgment and overturned the Board's ruling that the process claims were patentably indistinct from the earlier product claims. Relying on the Duggan declaration, the district court reasoned that “subsequent developments in the art [are relevant to] determining whether alternative processes exist” when weighing patentable distinctions for double patenting.

On appeal, the Federal Circuit vacated the district court's summary judgment ruling, holding that the process claims were patentably indistinct from the product claims because alternative processes developed after the filing of the secondary application are not relevant to the “patentably distinct” inquiry. The court reasoned that the filing date of the secondary application is the date that the applicant essentially avers that the product and process are “patentably distinct.” The court further reasoned that such a rule gives the applicant the benefit of future developments in the art, while preventing the inequitable situation that arises when an applicant attempts to rely on developments occurring decades after the filing date of the secondary application. Applying this rule, the Federal Circuit concluded that the district court could not rely on the later developed processes referenced in the Duggan declaration, but remanded the case for determination of whether processes for making the cephem compounds other than the acylation process were known before Jan. 8, 1990.

Jeffrey S. Ginsberg is a partner and Matthew Berkowitz is an associate in the New York office of Kenyon & Kenyon LLP.

Compiled by Jeffrey S. Ginsberg and Matthew Berkowitz

Federal Circuit Defines Boundaries of Lanham Act's 'Use in Commerce' Requirement

In Aycock Engineering, Inc. v. Airflite, Inc., No. 2008-1154, 2009 U.S. App. LEXIS 6590 (Fed. Cir. March 30, 2009), the Federal Circuit held that a service mark does not meet the “use in commerce” requirement of '45 of the Lanham Act when an applicant uses that mark in the preparatory stages of a service's development, but never offers the service to the public.

In the late 1940s, William Aycock began work on a service involving chartering flights in the air taxi industry, which at that time, commonly leased entire airplanes rather than individual seats. Aycock sought to initiate a service that allowed solo passengers to arrange flights without having to lease an entire plane. Aycock planned to act as a middleman between the customer and air taxi service operators, essentially coordinating flights for customers with similar travel plans. He planned to advertise this service using the name AIRFLITE. Several years after conceiving of this idea, Aycock formed a company, Aycock Engineering, invited virtually all air taxi operators to join his operation, and obtained two toll-free numbers that the public could use to make reservations.

Aycock filed a service mark application for AIRFLITE. During prosecution, Aycock stated that his service “is a communication service between persons desiring to charter aircraft and certified air taxi operators.” A registration for the AIRFLITE mark was granted on April 30, 1974, and subsequently renewed.

Despite his efforts, Aycock's operation never got off the ground. And while he advertised his AIRFLITE service to air taxi operators, he never marketed it to the general public or ever arranged for a single passenger to fly on a chartered flight.

In 2001, Airflite, Inc. filed a petition for cancellation of Aycock's AIRFLITE mark, alleging that Aycock Engineering did not use the mark prior to registration in connection with the services identified in that registration. The Trademark Trial and Appeal Board (“TTAB”) agreed with Airflite, Inc. and cancelled the AIRFLITE mark.

The Federal Circuit affirmed the TTAB's decision, holding that Aycock failed to use the AIRFLITE mark in commerce. The court opined that prior to 1989, a service mark applicant had to: 1) use the mark in the sale or advertising of a service and 2) show that the service was either rendered in interstate commerce or rendered in more than one state or in this and a foreign country by a person engaged in commerce. The court reasoned that this required an open and notorious public offering of the services to those for whom the services were intended, and that mere preparations to use that mark sometime in the future would not do. The court then determined that Aycock failed to meet the “use in commerce” requirement because he never used the actual service described in his registration, which related to arranging for the transportation of a person from one place to another. Instead, Aycock merely took preparatory steps in the form of attempting to build an infrastructure of air taxi operators that, when completed, could be offered to the public. Because Aycock failed to meet the “use in commerce” requirement, the court held his AIRFLITE mark void ab initio.

Judge Pauline Newman dissented, reasoning that the TTAB erred in interpreting the description of services in the registration as excluding the very services that were the basis of that registration. Judge Newman further opined that if a flaw in the registration was now discovered, after 35 years, it should be clarified and corrected, not voided ab initio.

Federal Circuit Rules on Timing of 'Patentably
Distinct' Determination for Double Patenting

In Takeda Pharm. Co., Ltd. v. Doll, No. 2008-1131, 2009 U.S. App. LEXIS 7679 (Fed. Cir. April 10, 2009), the Federal Circuit held that subsequent developments in the art may inform the “patentably distinct” determination for double patenting, but only to the extent that such subsequent developments predate the secondary application that triggers a double patenting rejection.

On Dec. 17, 1975, Takeda Pharmaceutical Co., Ltd. filed a U.S. patent application disclosing certain cephem compounds and the process for making those compounds. Takeda developed these new cephem compounds through an acylation process. The U.S. application claimed the benefit of a Japanese application filed on Dec. 19, 1974. Takeda obtained a number of patents claiming these compounds through a series of continuations, continuations-in-part and divisional applications. On Jan. 8, 1990, 16 years after the 1974 priority date, and 14 years after issuance of the first compound patent, Takeda filed a secondary application covering the acylation process for making the cephem compounds claimed in earlier patents. The process patent issued on Dec. 10, 1996 as U.S. Patent No. 5,583,216.

In 1998, the USPTO received two anonymous requests for re-examination of the '216 patent, each of which asserted that it was invalid for “obviousness-type” double patenting. The examiner rejected the '216 patent process claims as patentably indistinct from the product claims of one of the earlier compound patents on the grounds that the acylation process was the only known process for making the cephem compounds. The Board of Patent Appeals and Interferences (“Board”) affirmed the rejection. Takeda then challenged the Board's decision in the District Court for the District of Columbia and relied on a declaration by one Dr. Duggan, who declared that processes disclosed in patents published on or after Sept. 12, 2002 provided a viable alternative non-infringing process for making the cephem compounds claimed in the earlier product patents. The district court granted Takeda's motion for summary judgment and overturned the Board's ruling that the process claims were patentably indistinct from the earlier product claims. Relying on the Duggan declaration, the district court reasoned that “subsequent developments in the art [are relevant to] determining whether alternative processes exist” when weighing patentable distinctions for double patenting.

On appeal, the Federal Circuit vacated the district court's summary judgment ruling, holding that the process claims were patentably indistinct from the product claims because alternative processes developed after the filing of the secondary application are not relevant to the “patentably distinct” inquiry. The court reasoned that the filing date of the secondary application is the date that the applicant essentially avers that the product and process are “patentably distinct.” The court further reasoned that such a rule gives the applicant the benefit of future developments in the art, while preventing the inequitable situation that arises when an applicant attempts to rely on developments occurring decades after the filing date of the secondary application. Applying this rule, the Federal Circuit concluded that the district court could not rely on the later developed processes referenced in the Duggan declaration, but remanded the case for determination of whether processes for making the cephem compounds other than the acylation process were known before Jan. 8, 1990.

Jeffrey S. Ginsberg is a partner and Matthew Berkowitz is an associate in the New York office of Kenyon & Kenyon LLP.