IP News

Federal Circuit Finds Hotels.com to Be Generic

In In Re Hotels.com, 2008-1429, the Federal Circuit affirmed the decision of the Trademark Trial and Appeal Board (“TTAB”) refusing registration of the service mark HOTELS.COM on the ground that the mark is a generic.

Applicant Hotels.com, L.P. applied to register HOTELS.COM (“the proposed mark”) for the services of “providing information for others about temporary lodging; travel agency services, namely, making reservations and bookings for temporary lodging for others by means of telephone and the global computer network.” The examiner denied registration of the proposed mark on the grounds that it is merely descriptive of hotel registration services and that the applicant's evidence was insufficient to show acquired distinctiveness. The examiner also stated that the proposed mark appeared to be generic.

The TTAB affirmed the rejection, but only on the ground that the proposed mark is a generic term for hotel information and reservations, and that adding “dot-com” does not convert the generic term “hotels” into a brand name. The TTAB did not agree with the examiner's view of the inadequacy of the showing of acquired distinctiveness, and stated that “if applicant should ultimately prevail in any appeal of this decision, we find in the alternative that the evidence of acquired distinctiveness is sufficient to support registration under Section 2(f).”

On appeal, the applicant argued that the proposed mark is not generic because the Web site Hotels.com does not provide lodging and meals and is not synonymous with the word “hotel.” The applicant referred to its survey evidence as establishing that the proposed mark is widely associated with the applicant. The applicant further argued the dot-com component of the proposed mark negates any generic nature of the word “hotels,” and that viewed in its entirety, the proposed mark is not a generic name but an indicator of the applicant's services.

The Federal Circuit affirmed the TTAB's decision, holding that the generic term “hotels” did not lose its generic character by including “dot-com.” The Federal Circuit further found convincing the TTAB's citation to other domain names (e.g., www.web-hotels.com, and www.all-hotels.com) that used “hotels.com.” The Federal Circuit agreed with the TTAB that “this evidence demonstrates a competitive need for others to use as part of their own domain names and trademarks, the term that applicant is attempting to register.”

Petitioners File Brief in Bilski v. Doll

On July 30, 2009, petitioners Bernard L. Bilski and Rand A. Warsaw (“Bilski”) filed their opening brief in the Supreme Court case of Bilski v. Doll, Docket No. 08-964. The petitioners stated the questions presented as:

1. Whether the Federal Circuit erred by holding that a “process” must be tied to a particular machine or apparatus, or transform a particular article into a different state or thing (“machine-or-transformation” test), to be eligible for patenting under 35 U.S.C. ' 101, despite the Court's precedent declining to limit the broad statutory grant of patent eligibility for “any” new and useful process beyond excluding patents for “laws of nature, physical phenomena, and abstract ideas,” and
2. Whether the “machine-or-transformation” test for patent eligibility adopted by the Federal Circuit, effectively forecloses meaningful patent protection to a business method involving a series of transactions among a commodity provider, consumers, and market participants, contradicts the clear Congressional intent that patents protect “method[s] of doing or conducting business.”

Bilski's invention relates to a method of hedging the consumption of risk associated with a commodity sold at a fixed price for a given period. In the PTO, the patent examiner had rejected all pending claims under 35 U.S.C. ' 101, as directed to nonstatutory subject matter. The examiner stated that “the invention ' merely manipulates [an] abstract idea and solves a purely mathematical problem.” The examiner's rejection was affirmed by the Board of Patent Appeals and Interferences and again by the Federal Circuit in an en banc decision. Specifically, the Federal Circuit held that a process is patent-eligible only if: 1) it is tied to a particular machine or apparatus, or 2) it transforms a particular article into a different state or thing, and that the Bilski invention was not patent-eligible because it failed to meet either prong of the test.

In its brief, Bilski argued that the Federal Circuit test conflicted with Supreme Court precedent as well as the plain language of the applicable statutes. Specifically, Bilski argued that the Supreme Court has already twice declined to hold that a process must be tied to a machine or transform articles in order to be patentable, and that the Federal Circuit's test repudiates the Supreme Court's broad framework for patent subject matter eligibility. Bilski argued that the Federal Circuit's test was too restrictive and unnecessary to prevent patenting of abstract ideas or laws of nature.

Bilski further argued that the Federal Circuit's test is inconsistent with the Patent's Act's recognition that business methods are eligible for patenting. Bilski stated that Congress enacted a prior use defense to infringement of business method patent claims, and that in doing so, Congress embraced business methods (since it would not craft a defense to a class of patents that did not exist) and the Federal Circuit's State Street Bank “useful, concrete, and tangible result.”

Finally, Bilski argued that the Federal Circuit's test should be rejected as legislating new public policy because it excludes new and useful business-related processes. Bilski noted that any concerns over potentially vague or trivial patents for business methods should be addressed by the other requirements for patentability, such as novelty, nonobviousness, and definite claiming.

Federal Circuit Ups Inequitable Conduct Pleading Standard

On Aug. 4, 2009, in Exergen Corp. v. Wal-Mart Stores, Inc., 2006-1491, the Federal Circuit affirmed the district court's denial of defendant S.A.A.T. Systems Application of Advanced Technology Ltd.'s (“SAAT”) motion to amend its answer and counterclaims to add an inequitable conduct defense, holding that in pleading inequitable conduct in patent cases, Rule 9(b) requires specific identification of the material misrepresentations or omission committed before the PTO as well as the facts from which the requisite scienter may reasonably be inferred.

On July 27, 2001, plaintiff Exergen Corp. (“Exergen”) brought suit against SAAT alleging infringement of two patents relating to infrared thermometers. On Oct. 2, 2001, Exergen added a third patent, U.S. Patent No. 6,292,685 (“the '685 patent”), which had issued less than a month earlier, to its complaint. SAAT answered by asserting affirmative defenses and counterclaims of both noninfringement and invalidity. On Sept. 6, 2002, SAAT sought leave pursuant to Fed. R. Civ. P. 15(a) to add inequitable conduct as an affirmative defense and counterclaim against the '685 patent. In relevant part, SAAT's proposed amended pleading alleged that the '685 patent was unenforceable because: 1) Exergen filed another patent application that issued on Jan. 26, 1986 as U.S. Patent No. 4,566,808 (“the '808 patent”) that was material to patentability of the '685 patent, 2) Exergen cited U.S. Patent No. 4,317,998 (“the '998 patent”) during prosecution of one of the other asserted patents, which was also material to patentability of the '685 patent, and 3) Exergen was aware of the '808 and '998 patents and had an obligation to disclose them to the PTO. The district court denied SAAT's motion, stating that the proposed pleading failed to allege inequitable conduct with particularity under Rule 9(b).

On appeal, the Federal Circuit affirmed the district court's ruling and held that in pleading inequitable conduct in patent cases, Rule 9(b) requires identification of the specific who, what, when, where, and how of the material misrepresentation or omission committed before the PTO. Further, the court held that although “knowledge” and “intent” may be averred generally, a pleading of inequitable conduct under Rule 9(b) must include sufficient allegations of underlying facts from which a court may reasonably infer that a specific individual: 1) knew of the withheld material information or of the falsity of the material misrepresentation, and 2) withheld or misrepresented this information with a specific intent to deceive the PTO.

The Federal Circuit noted that SAAT's proposed pleading did not meet the Rule 9(b) standard because it: 1) failed to name the specific individuals associated with the prosecution who both knew of the material information and deliberately withheld or misrepresented it, 2) failed to identify which claims, and which limitations in those claims, the withheld references are relevant to, and where in those references the material information is found, 3) failed to identify the particular claim limitations, or combination of claim limitations, that are supposedly absent from the information of record, and 4) failed to allege facts that give rise to a reasonable inference of scienter.

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

Federal Circuit Finds Hotels.com to Be Generic

In In Re Hotels.com, 2008-1429, the Federal Circuit affirmed the decision of the Trademark Trial and Appeal Board (“TTAB”) refusing registration of the service mark HOTELS.COM on the ground that the mark is a generic.

Applicant Hotels.com, L.P. applied to register HOTELS.COM (“the proposed mark”) for the services of “providing information for others about temporary lodging; travel agency services, namely, making reservations and bookings for temporary lodging for others by means of telephone and the global computer network.” The examiner denied registration of the proposed mark on the grounds that it is merely descriptive of hotel registration services and that the applicant's evidence was insufficient to show acquired distinctiveness. The examiner also stated that the proposed mark appeared to be generic.

The TTAB affirmed the rejection, but only on the ground that the proposed mark is a generic term for hotel information and reservations, and that adding “dot-com” does not convert the generic term “hotels” into a brand name. The TTAB did not agree with the examiner's view of the inadequacy of the showing of acquired distinctiveness, and stated that “if applicant should ultimately prevail in any appeal of this decision, we find in the alternative that the evidence of acquired distinctiveness is sufficient to support registration under Section 2(f).”

On appeal, the applicant argued that the proposed mark is not generic because the Web site Hotels.com does not provide lodging and meals and is not synonymous with the word “hotel.” The applicant referred to its survey evidence as establishing that the proposed mark is widely associated with the applicant. The applicant further argued the dot-com component of the proposed mark negates any generic nature of the word “hotels,” and that viewed in its entirety, the proposed mark is not a generic name but an indicator of the applicant's services.

The Federal Circuit affirmed the TTAB's decision, holding that the generic term “hotels” did not lose its generic character by including “dot-com.” The Federal Circuit further found convincing the TTAB's citation to other domain names (e.g., www.web-hotels.com, and www.all-hotels.com) that used “hotels.com.” The Federal Circuit agreed with the TTAB that “this evidence demonstrates a competitive need for others to use as part of their own domain names and trademarks, the term that applicant is attempting to register.”

Petitioners File Brief in Bilski v. Doll

On July 30, 2009, petitioners Bernard L. Bilski and Rand A. Warsaw (“Bilski”) filed their opening brief in the Supreme Court case of Bilski v. Doll, Docket No. 08-964. The petitioners stated the questions presented as:

1. Whether the Federal Circuit erred by holding that a “process” must be tied to a particular machine or apparatus, or transform a particular article into a different state or thing (“machine-or-transformation” test), to be eligible for patenting under 35 U.S.C. ' 101, despite the Court's precedent declining to limit the broad statutory grant of patent eligibility for “any” new and useful process beyond excluding patents for “laws of nature, physical phenomena, and abstract ideas,” and
2. Whether the “machine-or-transformation” test for patent eligibility adopted by the Federal Circuit, effectively forecloses meaningful patent protection to a business method involving a series of transactions among a commodity provider, consumers, and market participants, contradicts the clear Congressional intent that patents protect “method[s] of doing or conducting business.”

Bilski's invention relates to a method of hedging the consumption of risk associated with a commodity sold at a fixed price for a given period. In the PTO, the patent examiner had rejected all pending claims under 35 U.S.C. ' 101, as directed to nonstatutory subject matter. The examiner stated that “the invention ' merely manipulates [an] abstract idea and solves a purely mathematical problem.” The examiner's rejection was affirmed by the Board of Patent Appeals and Interferences and again by the Federal Circuit in an en banc decision. Specifically, the Federal Circuit held that a process is patent-eligible only if: 1) it is tied to a particular machine or apparatus, or 2) it transforms a particular article into a different state or thing, and that the Bilski invention was not patent-eligible because it failed to meet either prong of the test.

In its brief, Bilski argued that the Federal Circuit test conflicted with Supreme Court precedent as well as the plain language of the applicable statutes. Specifically, Bilski argued that the Supreme Court has already twice declined to hold that a process must be tied to a machine or transform articles in order to be patentable, and that the Federal Circuit's test repudiates the Supreme Court's broad framework for patent subject matter eligibility. Bilski argued that the Federal Circuit's test was too restrictive and unnecessary to prevent patenting of abstract ideas or laws of nature.

Bilski further argued that the Federal Circuit's test is inconsistent with the Patent's Act's recognition that business methods are eligible for patenting. Bilski stated that Congress enacted a prior use defense to infringement of business method patent claims, and that in doing so, Congress embraced business methods (since it would not craft a defense to a class of patents that did not exist) and the Federal Circuit's State Street Bank “useful, concrete, and tangible result.”

Finally, Bilski argued that the Federal Circuit's test should be rejected as legislating new public policy because it excludes new and useful business-related processes. Bilski noted that any concerns over potentially vague or trivial patents for business methods should be addressed by the other requirements for patentability, such as novelty, nonobviousness, and definite claiming.

Federal Circuit Ups Inequitable Conduct Pleading Standard

On Aug. 4, 2009, in Exergen Corp. v. Wal-Mart Stores, Inc., 2006-1491, the Federal Circuit affirmed the district court's denial of defendant S.A.A.T. Systems Application of Advanced Technology Ltd.'s (“SAAT”) motion to amend its answer and counterclaims to add an inequitable conduct defense, holding that in pleading inequitable conduct in patent cases, Rule 9(b) requires specific identification of the material misrepresentations or omission committed before the PTO as well as the facts from which the requisite scienter may reasonably be inferred.

On July 27, 2001, plaintiff Exergen Corp. (“Exergen”) brought suit against SAAT alleging infringement of two patents relating to infrared thermometers. On Oct. 2, 2001, Exergen added a third patent, U.S. Patent No. 6,292,685 (“the '685 patent”), which had issued less than a month earlier, to its complaint. SAAT answered by asserting affirmative defenses and counterclaims of both noninfringement and invalidity. On Sept. 6, 2002, SAAT sought leave pursuant to Fed. R. Civ. P. 15(a) to add inequitable conduct as an affirmative defense and counterclaim against the '685 patent. In relevant part, SAAT's proposed amended pleading alleged that the '685 patent was unenforceable because: 1) Exergen filed another patent application that issued on Jan. 26, 1986 as U.S. Patent No. 4,566,808 (“the '808 patent”) that was material to patentability of the '685 patent, 2) Exergen cited U.S. Patent No. 4,317,998 (“the '998 patent”) during prosecution of one of the other asserted patents, which was also material to patentability of the '685 patent, and 3) Exergen was aware of the '808 and '998 patents and had an obligation to disclose them to the PTO. The district court denied SAAT's motion, stating that the proposed pleading failed to allege inequitable conduct with particularity under Rule 9(b).

On appeal, the Federal Circuit affirmed the district court's ruling and held that in pleading inequitable conduct in patent cases, Rule 9(b) requires identification of the specific who, what, when, where, and how of the material misrepresentation or omission committed before the PTO. Further, the court held that although “knowledge” and “intent” may be averred generally, a pleading of inequitable conduct under Rule 9(b) must include sufficient allegations of underlying facts from which a court may reasonably infer that a specific individual: 1) knew of the withheld material information or of the falsity of the material misrepresentation, and 2) withheld or misrepresented this information with a specific intent to deceive the PTO.

The Federal Circuit noted that SAAT's proposed pleading did not meet the Rule 9(b) standard because it: 1) failed to name the specific individuals associated with the prosecution who both knew of the material information and deliberately withheld or misrepresented it, 2) failed to identify which claims, and which limitations in those claims, the withheld references are relevant to, and where in those references the material information is found, 3) failed to identify the particular claim limitations, or combination of claim limitations, that are supposedly absent from the information of record, and 4) failed to allege facts that give rise to a reasonable inference of scienter.

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