LG Electronics, Inc. v. Bizcom Electronics, Inc.: Guidance on Extending a Patent Holder's Rights to Reach Downstream Parties Who Assemble Components into a Patented Combination
February 28, 2007
In <i>LG Electronics, Inc. v. Bizcom Electronics, Inc.</i>, 453 F.3d 1364 (Fed. Cir. 2006), the Federal Circuit held that a license to a patent covering a combination of elements, that authorized the licensee to sell components of the invention, but disclaimed a downstream license or implied license to the licensees' customers to practice the combination, constituted a conditional sale, thus defeating the application of the patent exhaustion doctrine. It further held that a downstream point of sale notice that no implied license was conveyed similarly defeated the first sale doctrine. In addition, it held that no implied license could be found on those facts. As a result, the patent holder was free to assert a claim of patent infringement against parties who were authorized purchasers of components of its invention, when such parties assembled the resulting combination. This decision provides the clearest guidance to date on how a patent holder whose patents cover a combination of components can extend its rights to reach downstream parties who assemble those components into the patented combination. This article discusses this case in the context of pre-existing authority on patent exhaustion and implied license, and highlights some of the considerations associated with drafting agreements to avoid patent exhaustion and implied licenses.
IP News
February 01, 2007
Highlights of the latest intellectual property news from around the country.
Foreign Use of a Mark May Establish Trademark Priority in the U.S.
February 01, 2007
In the recent decision of <i>First Niagara Ins. Brokers, Inc. v. First Niagara Fin. Group, Inc.</i> (Fed. Cir. 2007) (the 'Federal Circuit's decision'), the Federal Circuit overturned a ruling by the Trademark Trial and Appeal Board (the 'Board') dismissing an opposition by First Niagara Insurance Brokers ('FN-Canada'), a Canadian company, to registration of 'First Niagara' and related marks by First Niagara Financial Group ('FN-US'), a U.S. company. In rendering its holding, the Federal Circuit declared that, in some cases, what would seem to be purely foreign trademark activity may establish superior trademark rights in the United States.
Judicial Support for Reverse Engineering
February 01, 2007
Reverse engineering brings to mind one main question for the intellectual property practitioner: Is it legal? By looking at a few cases dealing with reverse engineering and intellectual property regimes, it is discovered that not only is reverse engineering legal, but it is a means of maintaining competition that is fair and healthy for the marketplace.
Trademark Investigations Revisited
February 01, 2007
The use of investigations to uncover and evaluate potential infringement and unfair competition claims can be an extremely effective weapon for any trademark owner. Usually, a key to successful trademark investigations rests in having the mark owner's investigator pose as an ordinary consumer ' essentially misrepresenting his or her true identity or purpose to the potential infringer. This practice of attempting to gain information through the arguable use of deception or invented scenario is now commonly referred to as 'pretexting' and has led to controversy in the general corporate context. This article concludes that properly conducted and supervised pretext investigations remain in harmony with both the relevant case law and the policy goals of trademark and unfair competition law.
IP News
December 29, 2006
Highlights of the latest intellectual property news from around the country.
When Winning Might Also Be Losing: The Preclusive Effects of Defending a Trademark Application or Registration
December 29, 2006
Last summer, the Third Circuit Court of Appeals in <i>Jean Alexander Cosmetics, Inc. v. L'Oreal USA, Inc.</i>, 458 F.3d 244 (3rd Cir. 2006), joined a majority of the courts of appeal in holding that it would give full preclusive effect to any of the alternative holdings of a prior adjudication. In so doing, the court further highlighted the necessity of thinking both offensively and defensively at the earliest stages of a trademark dispute, including during proceedings before the Trademark Trial and Appeals Board ('TTAB').
Protecting Trade Dress in Once-Patented Subject Matter
December 29, 2006
The recent decision, <i>Fuji Kogyo Co. v. Pacific Bay Int'l, Inc.</i>, 461 F.3d 675 (6th Cir. 2006), confronts the question deliberately left unresolved in <i>TrafFix Devices, Inc. v. Marketing Displays, Inc.</i>, 532 U.S. 23 (2001), of whether a product design claimed in a prior utility patent can ever be protectable trade dress under the Lanham Act. Although setting a high bar to protectability, indeed a 'presumption' and 'heavy burden' that material claimed in a utility patent is functional and hence unprotectable once the patent term ends, the Supreme Court, of course, expressly elected not to foreclose such protection entirely. Thus, it refused the invitation of defendant TrafFix, and 'some of its amici,' to rule that 'the Patent Clause of the Constitution, Art. I '8, cl. 8, of its own force, prohibits the holder of an expired utility patent from claiming trade dress protection.' 532 U.S. at 35. Without itself addressing the constitutional question of how narrowly 'limited times' means 'limited times,' <i>Fuji Kogyo</i> does nothing to ease the burden in establishing trade dress protection for once-patented subject matter; it offers as well a new (if, perhaps, less than fully developed) analytical approach for applying the <i>TrafFix</i> presumption, asking whether the claimed trade dress would have infringed the expired patents.
