Commil USA v Cisco- Belief of Invalidity Doesn’t Matter

On May 26, the Supreme Court finally drew a line in the sand on indirect patent infringement defenses. Enter: COMMIL USA, LLC v. CISCO SYSTEMS, INC.

Previously, the Federal Circuit held that “evidence of an accused inducer’s good-faith belief of invalidity may negate the requisite intent for induced infringement,” Commil USA LLC v. Cisco Systems Inc., No. 2012-1042, slip op. at 11 (Fed. Cir. June 25, 2013). The Supreme Court actually read the plain text of the Patent Act and reversed.

Direct infringement is still strict liability. Here, the Supreme Court held that a patent defendant’s so-called “Good Faith Belief of Invalidity” defense to infringement simply does not exist in reality or in law. (Slip Opp. pp. 5-14). Plainly, the Court held that the mental state of a direct infringer is wholly irrelevant. This is wonderful news for fans of stare decisis because SCOTUS held the exact same thing in Global-Tech v. SEB S.A. No real surprises here.

Good-faith belief of non-infringement will probably suffice. However, the Commil opinion reiterated its Global-Tech holding that liability for indirect infringement can only attach if the defendant knew of the patent and knew as well that “the induced acts constitute patent infringement.” In delivering the opinion, Justice Kennedy reiterated that for both induced and contributory infringement, Global-Tech requires “proof the defendant knew the acts were infringing.” (Slip Opp. at 9).

Well … how will a defendant know that an act is infringing without a ruling stating the same? This gives defendants a lot of flexibility in defeating an accusation of indirect infringement. In essence, a defendant can say, “Well how was I supposed to know I was inducing or contributing? Patent Infringement can only be fully known when a court says so.” To be fair, Kennedy hinted that such a belief of non-infringement on the part of the defendant must be “reasonable,” but that still gives defendants plenty of ammunition to defeat an accusation.

Good-faith belief of invalidity is no defense. Citing how different the issues of infringement and invalidity are under the Patent Act, the Court held that a good faith belief of invalidity is NOT a defense to indirect or direct infringement. The Court spilled some ink over how burdensome litigation would become if a good-faith belief of invalidity would be allowed, but indirect infringers can make things just as onerous by maintaining a good-faith belief of non-infringement.

The lesson here for indirect infringement defendants is to play dumb regarding infringement. The lesson here for plaintiffs is to find a direct infringer.  Some are calling this a “win for trolls,” including dissenter Justice Scalia (Roberts also joined in the dissent). But from a practical standpoint, the Court’s ruling will likely not make life any easier for plaintiffs, because a defendant will only need to hodge-podge some good faith belief of non-infringement – as opposed to a good faith belief of invalidity. In light of the Federal Circuit’s recent Akamai decision, that’s getting increasingly easier to do.

At the end of the day, however, the Supreme Court made a lot of patent plaintiffs breathe a collective sigh of relief after reeling from the Federal Circuit’s earlier decision.

“When Dr. Leighton and Mr. Lewin patented their invention, they expected our legal system to protect their intellectual property.”

Heh, heh, heh…ho, ho, ho,…whatever lead them to believe THAT?

The Federal Circuit, perhaps spurred on by the hysteria over “patent trolls,” continues to systematically extract whatever worn down, yellowed and decaying teeth remain in the patent laws.  Their recent decision in Akamai v. Limelight reaffirms the recently created “single entity” rule that essentially requires that a “single entity” perform all steps of a patented method before direct patent infringement can be found.

As a practical matter, this means that all but the most clueless operators can safely infringe method patents through the simple expedient of having two or more parties perform different ones of the claimed method steps. (Here I am assuming they are bright enough not to enter into a discoverable contract entitled, “Agreement To Infringe Patent.”)   The dissent in this case correctly identifies this as a “gaping hole in liability which the majority never defends, and which all agree makes no sense.”

The decision is interesting to read for a variety of reasons, not the least of which are the history and background of Section 271(a) (complete with citations to Giles S. Rich’s 1949 statements before Congress) as well the bickering between the majority and dissenting judges.  Personally, I come down on the side of the dissent, which correctly notes that (1) “whoever” as used in Section 271(a) is plural, and (2) this whole “single entity” business is only a recent creation and not some long-standing rule of law.

While there is much to discuss and debate regarding the two positions, what struck me is the majority’s concern that, plugging this gaping hole is somehow unjust because it might lead to more litigation and the imposition of liability on wrongdoers.  Well, yeah, isn’t that kind of how this is supposed to work?  I’ll wager Dr. Leighton and Mr. Lewin thought so as well.

IP Litigator Philip Mann Named to 2014 Washington Super Lawyers List

IP Litigator Philip Mann Named to 2014 Washington Super Lawyers List

Normally we don’t toot our own horn – but we are pleased and honored to announce that our founder Philip P. Mann was recognized in the 2014 Washington Super Lawyers ranking which lists the top attorneys in the state of Washington. The annual Super Lawyers list was featured in the July issue of Seattle Met magazine.

Super Lawyers is a rating service that selects outstanding lawyers from more than 70 practice areas who have attained high degrees of peer recognition and professional achievement. The selection process includes independent research, peer nominations and peer evaluations.

Mann is a trial lawyer with more than 30 years of experience litigating patent, trademark, copyright, trade secret and other intellectual property matters. He has broad experience representing clients in jury trials and bench trials before federal and state courts across the country, and in appeals to the Federal Circuit. Mann, who also has a degree in Electrical Engineering, worked in private practice in Chicago, Milwaukee and Seattle before founding the Mann Law Group in 2004.


Tyler Perry Snatches ‘What Would Jesus Do’ Mark


I’ll avoid the rampant irony of taking a trademark around Jesus’ name and/or using The Lord’s name in vain for the sake of financial gain. (Isn’t there something about that in the Bible?)

Television/movie star and man-of-many-faces Tyler Perry successfully snatched away the mark: "WHAT WOULD JESUS DO" from Reality TV  "star" Kimberly Kearney ("Poprah" on I Want to Work for Diddy). Perry convinced the Trademark Trial and Appeal Board (TTAB) that Kearney never used the Mark and/or abandoned the Mark.

According to the TTAB decision, Perry attempted to register the Mark for "’Entertainment services in the nature of an on-going reality based television program,’ in International Class 41" (Reg. No. 3748123). Perry then successfully convinced the Board that Kearney did not use the Mark in connection with any television program. Three big lessons from all of this …

Lesson #1: Always Answer the Requests for Admission.

Kearney did not respond to Perry’s Requests for Admission. Accordingly, TTAB found that Kearney admitted to everything that Perry requested and that such facts she "admitted" are now "conclusively established." (Fed. R. Civ. P. 36). Even though she denied those facts in her Answer, her failure to respond to the Requests for Admission trump those denials. YIKES. Let that be a lesson to those of you in litigation – Respond to your Requests for Admission.

Lesson #2: Mind Your Meetings

Here, Kearney alleged that she attempted to start a reality show by pitching it  to … coincidentally enough … Tyler Perry Studios.

We see this all the time in trademark law. Here’s what probably happened: Kearney likely walked in to TP Studios, gave them an idea for a ridiculous reality show, didn’t really have much protectable IP, but did have a federal trademark on a name for said ridiculous show. Then, the TP Studio executives likely said "no thank you" to Kearny, then decided that she still had a neat name for a show. Tyler Perry studios, realizing Kearny would likely never make anything of the Mark, filed to cancel it and take it away from her. What should you remember from this? Mind Your Meetings!

If you’re going to meet with someone who might steal your intellectual property, make sure you get in a Non-Disclosure Agreement at the very least. Here – it didn’t look like Kearny had much in terms of trademark rights, but this is still very indicative of how many large companies operate. Many have been known to pretend to be disinterested in your ideas only to misappropriate them later. Worse yet, sometimes they will string you along for several weeks/months/years of negotiations to get more information and then tell you they aren’t interested.

Lesson# 3 Actual Use Still Counts

A federally-registered trademark is presumed valid, but that does not make it invincible. In other words, "use it or lose it." If Kearny had actually made use of this trademark in some way relating to producing a show around it, she could have survived cancellation. At the very least, she could have gotten this issue in front of a judge or jury and slowed down the process. The press around the dispute very well could have gotten her a TV deal with someone other than TP Studios. What might be interesting later is if Tyler Perry poaches some of Kearney’s substantive material around her show (assuming she actually has some).


-Tim Billick

Hershey’s Chocolate Wants to Kill Your Buzz

Hershey’s Chocolate, Inc. filed suit (Case No. 2:14-cv-00815-RSL) for Trademark Infringement in U.S. District Court in Seattle against Conscious Care Cooperative (Seattle CCC), a Seattle company which describes itself as "a non- profit cooperative that is dedicated to providing its members the highest quality of organic medicine or Medical Marijuana in Seattle."

What’s bugging Hershey’s exactly? This (photo credits Kiro TV news):

And this:


According to the Complaint filed Tuesday, June 3, Hershey’s is alleging the following causes of Action

  • Count One: Federal TM infringement of the various REESE’S, REESE’S PUFFS, and MR. GOODBAR marks and/or trade dress. (15 USC 1114)
  • Count Two: Trade dress infringement, false designation of origin, and unfair competition. (15 USC 1125(a)).
  • Count Three: Trademark and Trademark Dilution. (15 USC 1125(c)).
  • Count Four: Violation of Washington State Trademark Dilution Statute. (RCW 19.77.160)
  • Count Five: Violation of Unfair and Deceptive Practices Act. (RCW 19.86.020).
  • Count Six: Common Law Trademark Infringement and Unfair Competition


Generally speaking, you cannot get federal protection over your cannabis-related marks. Sections 1 and 45 of the Lanham Act only covers "lawful" use in commerce, but THC, the active high-inducing chemical in marijuana, is still very much illegal under the Controlled Substances Act. Not surprisingly, the Feds aren’t too keen on protecting what they still (half-heartedly) believe to be an illegal substance. Therefore, based on priority of use, and federal protection, Hershey’s very clearly has superior rights in its marks to the Seattle CCC.


Of course there are many ways to win (and lose) a case. If you remove the cannabis aspects of this case, it’s fairly straight-forward. Hershey’s has superior rights, and a reasonable jury could view the marks to be confusingly similar. This is a fact question, so it’s unlikely that this aspect would be decided on summary judgment.

But the cannabis elements admittedly cloud the analysis. Do federally-protected TM rights in legal candy trump state-protected rights in cannabis candy? Normally, the answer is "yes", but only a handful of states have legalized medicinal marijuana, and only Washington and Colorado (as of June 10, 2014) have legalized recreational marijuana. Seattle CCC could therefore argue that its customers are in a very niche market and very distinct from Hershey’s customers and that no reasonable consumer could possibly mistake a pot treat coming from Hershey’s.

What about the dilution/tarnishment claims? Is Seattle CCC really "diluting" the Hershey’s mark? Would people truly think that "Reefer’s" came from Hershey’s and that the Seattle CCC will likely cause harm to the fine upstanding Hershey’s name? In my very humble opinion, if someone wants to ingest cannabis, they buy  and ingest cannabis. If someone wants to buy candy, they buy and ingest candy. Sure, maybe some careless parents might leave some cannabis-candy on the counter and Little Johnny and Little Suzy might mistakenly eat it, but regulating that sort of thing shouldn’t be in the wheelhouse of federal trademark law. We have plenty of state-based organizations for that in Washington.

My cynical/tactical thinking is that Hershey’s is looking to cash-in on the national pot craze without actually getting its hands "dirty" in the business. Hershey’s likely wants to collect a settlement and/or license agreement for pot dealers to use its trade dress and trademarks. Obviously this would only be enforceable in Washington state, because – again – the Feds won’t enforce contracts that are illegal under federal law. This way, Hershey’s won’t openly affiliate with drug dealers; won’t have to invest in the infrastructure to make cannabis candy; and will be able to collect some cash on the side from budding industry (couldn’t resist).

I’ll do my best to follow this case very closely and provide more insight as my time permits. Until then, if you have any questions on trademark issues, feel free to contact Mann Law Group.


Hershey’s is suing a Colorado cannabis dealer as well:


Mann Law Group Gets Jury Verdict in Patent Case

We’ve been exceptionally busy lately, so this is the first time we’ve had some time to actually take a look at what we’ve accomplished.

The Mann Law Group, now with a new associate Timothy Billick (bio and press release to come later), partnered up with John Whitaker to obtain a unanimous jury verdict award in the case Brilliant Instruments Inc v. GuideTech Inc. in the Northern District of California, Oakland Division (Case No No. C. 09-5517). The jury accordingly awarded a six-figure damages award to Mann Law Group’s client. The firm represented GuideTech in this declaratory judgment action initiated by Brilliant Instruments.

The case covered Patent No. 6,226,231 (‘231 Patent), which generally relates to a "plularity of measurement circuits" which are used to measure electrical signals down to the picosecond range. For you nomenclature nuts, that’s 10 to the -12th second (or one-trillionth of one second). MLG inherited the case from several other law firms after it had been successfully appealed to the Federal Circuit and remanded to Oakland for trial.

"None of that was unanimous"

Every case has at least one or two lessons to be learned. This case? Always poll your jury, and always explain what "unanimous" means. After the judge had re-explained her instructions to the jury, the jury initially told us we lost. However, just as the Hon. Judge Claudia Wilken was getting ready to enter the judgment, one of the jurors spoke up in open court and informed the Court that the verdict "WAS NOT UNANIMOUS!"

The jury was ordered to continue deliberations. The next day, they came back in our favor.

We still have motions pending for an injunction, a defendant’s motion to set aside the jury verdict, and a motion for an amendment of the judgment, but we have safely moved past the jury, and we have a damage award.

Next time we will take great care to make sure the judge tells the jury what "unanimous" means in jury instructions.

Who you calling a “troll”?

This recent article from the Wall Street Journal brought a chuckle.  Seems the Obama Administration just stepped in to veto an ITC ruling, won by Samsung, that barred importation of certain Apple iPads and iPhones.  What’s interesting is some of the language used to justify the veto:

U.S. Trade Representative Michael Froman made the decision to veto the ban on the Apple devices, citing concerns about patent holders gaining "undue leverage" as well as potential harm to consumers and competitive conditions in the U.S. economy.

*    *    *

Critics of the ITC order questioned whether companies should be able to block rival products in cases involving patents that have been deemed to be essential to creating products based on key technologies overseen by industry standard-setting groups.

*    *     *

"We applaud the Administration for standing up for innovation in this landmark case," an Apple spokeswoman said in a statement. "Samsung was wrong to abuse the patent system in this way."

 "Undue leverage," huh? Questions "whether companies should be able to block rival products."  And, "abuse [of] the patent system."  Gee, where have I heard those words before? 

I trust Samsung and its lawyers are sitting back in quiet reflection today, wondering how they let their professional and ethical standards slip so far as to let them engage in such underhanded tactics, and vowing never to do it again. 

Abusing the patent system, indeed.



The Empire Strikes Back

It appears my comment regarding a recent New York Times article on "patent trolls" — and my suggestion that defense lawyers might be the major beneficiaries of the so-called "troll" problem —  has touched a nerve.  

For some reason Mr. Guiliano takes me to task for simply accepting the figures provided in the article and doing some back of the envelope, but nevertheless sound, calculations based thereon.  (In my comment, I simply read and directly quoted what was reported in the New York Times — you know, "All The News That’s Fit To Print" etc.)  It was that article, and not I, that reported: (1) "United States companies — most of them small or medium-sized — spent $29 billion in 2011 on patent assertion cases," (2) "only about $6 billion of that money wound up in the hands of inventors,”  and (3) "As for the other $23 billion, most of it goes to legal expenses…"  (In the article’s defense, it quotes a "study" and its co-author in making those claims.)  If those facts and figures are not correct, take it up with the New York Times and its sources, not me. 

Mr. Guiliano goes on to say, " So, if Mr. Mann had read the report he linked to, he would have learned that the legal costs totaled $6.67 billion, less than 1/3 of his $20 billion figure."  True, I did not read the report, I merely relied on what one of its co-authors had to say about it to a NYT reporter.  If he misrepresents the contents of his own report, and does so to a reporter for perhaps the nation’s best known paper, why is that my fault?

On a more substantive and serious note, the point here is that glib statements about patent trolls, and popular press articles about unsavoury individuals and their lawyers gaming the system, should not be accepted at face value and should not escape critical review. 

Here I simply took a thinly disguised anti-patent-troll article at face value and drew some reasonable conclusions from what was reported.  When that article unintentionally leads to some less than flattering conclusions about the defense bar, the backtracking and explaining begin.

Mr. Guiliano is absolutely correct when he says, " Mr. Mann has not made that claim in his blog post…[he] relied on a reporter’s account of an interview with James Bessen and then did a quick calculation."  Indeed, nowhere does Mr. Guiliano point to any flaw in my calculation.  Instead, the bulk of his post is directed toward showing that the cited study does not actually say what its own co-author said it does, and does not actually mean what its own co-author stated to a New York Times reporter. 

My rationale for my comment is simple;  It is based on face value acceptance of what those in the "anti-troll" camp claim, followed up with some basic arithmetic.  What, pray tell, is the rationale for Mr. Guiliano’s snide comment at the end of his post?