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The Greatest Thing Since Slicing Your Own Bread

bread-slicer

Today we take sliced bread for granted, and the phrase “the greatest thing since sliced bread” is usually delivered with rolled eyes and a tinge of irony. The innovation itself was revolutionary though. 

The story of commercial-scale bread slicing highlights the dogged determination of a man named Otto F. Rohwedder, an optometrist turned jeweler turned inventor, who over the course of 10+ years toiled away until he had revolutionized how we purchase bread.

Humans have been eating bread for many thousands of years, but until the early 1900’s we either baked that bread ourselves or bought it from a baker as an entire loaf. For those who have never tried thinly slicing a loaf at home it is a messy, uneven process that often yields mediocre results. 

Rohwedder recognized the need for a better solution. He overcame significant challenges in developing a working prototype, including a government ban on slicing, and ultimately succeeded in securing patent rights and in bringing his machine to market with great commercial success.  

A detailed history is available here

 

 

Light and the Lanham Act

A light bulb burns out.  The shelves of your local Lowe’s or Home Depot are stocked with replacements.  Some are LEDs (light-emitting diodes).  Others are CFLs (compact fluorescent lamp).  Some promise “long life.”  Others boast “duallife.”  What is a consumer to do?

In 2007, Congress passed the Energy Independence and Security Act of 2007 (“EISA”) to make the trip to the home improvement store simpler.  The Federal Trade Commission (“FTC”) promulgated regulations under EISA.  The FTC rule demands that light bulb manufacturers provide consumers information concerning a bulb’s energy use in a “lighting facts” panel.  The panel must contain information concerning the bulb’s brightness, estimated annual energy cost, life, appearance, and energy use.  See 16 C.F.R. § 305.15(b)(3)(i)-(ix).  This detailed panel must be displayed on the “side or rear display panel of the box.”  § 305.15(b)(3).  By contrast, a light bulb manufacturer only has to show the brightness (in lumens) and the estimated annual energy costs of running the light on the “principal display panel”—the front of the light bulb box.  § 305.15(b)(1)(i)-(ii).

EISA does not define promotional phrases like “long life” or “duallife.”  Neither did the FTC in its rulemaking.  All the FTC rule requires is that “the assumptions” underlying “any representation” on a light bulb package “regarding the cost of operation or life of such lamp” be “clearly and conspicuously disclose[d].”  § 305.15(d)(6).  The practical result is that an incandescent light manufacturer can make claims like “long life” and “energy-efficient” on the front of the box while burying detail on the life of the bulb on the back of the package in the lighting facts panel.

Consider the competitive situation this puts LED light bulb manufacturers like Cree in.  Cree’s LED bulbs use “84 percent less energy than incandescents and last 25 times longer.”  Home Depot sells Cree’s 40 watt replacement bulbs for $10.97 per bulb.  Home Depot sells a four-pack of GE’s soft white “long life” incandescent bulbs for $1.97.  A consumer not concerned solely with price might be assuaged by the “long life” claim on the front of the package and reach for the cheaper bulbs.

Historically, a party in Cree’s position did not have much recourse against this kind of competition.   It could simply wait for the FTC to take action.  Courts would have seen a false advertising claim premised on section 43(a) of the Lanham Act as an attempt to circumvent the market-policing function of the FTC.

These were the same kind of challenges raised against POM Wonderful's false advertising claim in POM Wonderful LLC v. Coca-Cola Co., 134 S. Ct. 2228 (2014).  In that case, POM Wonderful sued Coca-Cola for false advertising, alleging Coca-Cola’s 0.5% “pomegranate blueberry” beverage was misappropriating POM’s market for its 100% pomegranate blueberry juice.  The lower courts told POM to take its complaint before the Food and Drug Administration.

This past June, the Supreme Court unanimously reversed and reinstated POM's false advertising claim, opening the door wider for Lanham Act challenges to product labels in regulated industries.  POM Wonderful dealt with the interplay of the Federal Food, Drug, and Cosmetic Act, but the decision's logic can be extended to other regulatory regimes, including the one Congress created for light bulb labels in EISA.

NBC's "Parks and Recreation" delivers laughs, copyright misinformation with "The Cones of Dunshire"

[Warning: this article contains mild spoilers for season 6 of NBC's Parks and Recreation]



In NBC's hit comedy Parks and Recreation, Adam Scott's character Ben Wyatt is a sci-fi loving accountant. In season 6 of the show, an unemployed Ben Wyatt creates a hilarious and insanely intricate role-playing game called "Cones of Dunshire." The game features 8-12 players, two wizards, a maverick, an arbiter, two warriors, a corporal, and a ledgerman, and players roll up to sixteen dice simultaneously.

Throughout the season Ben laments the fact that he didn't copyright his game. Then, in the season finale, Ben's former coworker reveals that he copyrighted the game on Ben's behalf, and presents to Ben what is supposed to a document formalizing the copyrights. As an intellectual property attorney and huge fan of the show, I couldn't help dissecting the show's treatment of copyrights. Although this subplot was very entertaining, the show's writers got a few things wrong about copyright.

The "Cones of Dunshire" subplot was premised on three notions: (1) that the game itself was copyrightable, (2) that without some affirmative act Ben would have lost his copyrights, and (3) that friends can secure copyrights in each other's works as surprise presents. 

First of all, the game itself is not copyrightable. The Library of Congress explicitly states the following about the copyrightability of games: 

"Copyright does not protect the idea for a game, its name or title, or the method or methods for playing it. Nor does copyright protect any idea, system, method, device, or trademark material involved in developing, merchandising, or playing a game. Once a game has been made public, nothing in the copyright law prevents others from developing another game based on similar principles. Copyright protects only the particular manner of an author’s expression in literary, artistic, or musical form." (link)

Ben may have been able to protect aspects of the game through copyright, but not the game itself. For example, the instructions for the game may be protectable as a literary work. Also, the actual board for the game may be protectable as a work of visual art. But none of that would stop a competitor from creating a very similar game.

Second, the show suggests that an affirmative act is required to obtain copyrights - what the show referred to as "copyrighting." This is somewhat of a misnomer, because in the United States copyrights automatically vest once an author fixes their work in a tangible medium. Thus, once Ben Wyatt's game was created, any available copyrights (e.g., for the game instructions and board) would have been in effect. The act of filing a copyright registration confers a number of benefits, particularly related to obtaining damages for copyright infringement, but is not required to obtain rights.

Lastly, Ben's coworker could not have filed a copyright registration for the game without Ben's knowledge unless Ben had assigned his copyrights to them. Unless you are a rightsholder or you are the "duly authorized agent" of the author, you cannot file a registration for a work created by another.

To protect his IP rights, Ben would have been better served to contact an IP attorney, as the phrase "The Cones of Dunshire" may be protectable as a trademark, and aspects of his game may have been protectable under patent laws.

Will the Supreme Court Revisit the Interplay of Unfair Competition Law and the Federal Food, Drug, and Cosmetic Act?

Last term, the Supreme Court decided POM Wonderful LLC v. Coca-Cola Corp., 134 S. Ct. 2228 (2014).  POM makes a pomegranate-blueberry juice blend that contains only pomegranate and blueberry juice.  Coca-Cola makes and sells a pomegranate-blueberry beverage under its Minute Maid brand that contains only “0.3% pomegranate juice and 0.2% blueberry juice.”  Id. at 2233.  POM sued Coca-Cola for false advertising under section 43(a) of the Lanham Act.  Both the district court and the Ninth Circuit Court of Appeals held that POM’s claim was precluded because Coca-Cola’s beverage label complied with the Federal Food, Drug, and Cosmetic Act (“FDCA”).  A unanimous Court reversed, holding a competitor in POM’s position “may bring Lanham Act claims like POM’s that challenge food and drug labels that are regulated by the FDCA.”  Id.

On Monday, the Court indicated it may revisit the intersection of unfair competition law and the FDCA.  The Court asked the Solicitor General for his views on a petition for discretionary review from the Federal Circuit’s decision in Allergan, Inc. v. Athena Cosmetics, Inc., 738 F.3d 1350 (2013).  In that case, Allergan sued Athena under California’s unfair competition law (“UCL”).  Allergan claimed Athena violated the UCL by marketing a product called RevitaLash without approval from the Food and Drug Administration (“FDA”) or the California Department of Health Services.  Id. at 1353.

Allergan’s theory of recovery stems from how drugs and cosmetics are regulated under the FDCA.  Allergan's theory is also reminiscent of POM Wonderful.  Allergan makes a prescription eyelash enhancer called LatisseId.  In late 2008, FDA approved Latisse “to treat hypotrichosis of the eyelashes by increasing their growth including length, thickness and darkness.”  To obtain FDA approval, Allergan conducted clinical trials in order to establish that Latisse was safe and effective as an eyelash treatment.

Athena makes and markets RevitaLash as a cosmetic.  A cosmetic product is not subject to pre-market approval by the FDA.  This means a cosmetic manufacturer is not required to conduct clinical trials prior to putting its product on the market.  Allergan brought suit under the UCL on the grounds that Athena that RevitaLash is a “drug” under the FDCA and California law and Athena is marketing RevitaLash without the required regulatory approvals.  In essence, Allergan claims that by avoiding the drug approval process and post-approval regulation, RevitaLash unfairly competes against Allergan’s FDA-approved Latisse drug franchise.

The district court granted Allergan summary judgment on its UCL claim.  The Federal Circuit affirmed the district court’s grant of summary judgment.  It rejected two of Athena’s arguments in the process.

Athena first argued that Allergan’s UCL claim was pre-empted.  In rejecting Allergan’s argument, the court found “no clear purpose by Congress to preempt the state law claim at issue.”  Id. at 1355.  That Allergan’s UCL claim was premised on Athena violating California food and drug law that paralleled the FDCA was of no consequence to the Federal Circuit because “the California Health Code is not an obstacle to realizing federal objections.”  Id. at 1356.

Athena also argued that the district court erred in granting summary judgment that RevitaLash was a “drug” under the FDCA and the California Health Code.  Classification of RevitaLash as a “drug” triggers the need for regulatory approval giving rise to Allergan’s UCL claim.  Looking at the record, the court held that “there is no genuine dispute that Athena objectively intends the products at issue to be used to affect the structure of eyelashes.”  Id. at 1357.  As a result, “Athena objectively intends the products at issue to be used as drugs” without the necessary regulatory approvals.  Id.  The court then affirmed the district court.  Id. at 1357–58.

Athena petitioned the Supreme Court for discretionary review.  Athena’s petition asks the Supreme Court to reverse the Federal Circuit on preemption grounds.  Athena notes that FDA has not taken regulatory action against RevitaLash as an unapproved drug.  According to Athena, Allergan cannot avoid the FDCA’s bar on private enforcement actions, 21 U.S.C. § 337(a), by bringing a state unfair competition claim premised on violation of state food and drug law that incorporates the FDCA.

Athena had to be encouraged by the Supreme Court’s invitation to the Solicitor General.  As one review of the Court’s cert-granting practices recently found, “the Court granted briefing on the merits in 34% of cases in which it called for the views of the [Solicitor General], a 36-time increase above the overall grant rate.”  David C. Thompson & Melanie F. Watchell, “An Empirical Analysis of Supreme Court Certiorari Petition Procedures: The Call for Response and the Call for the Views of the Solicitor General,” 16 Geo. Mason L. Rev. 237, 295 (2009).  If history is any indicator, the Solicitor General will likely offer his views on the case in early 2015.  See id. at 296 (finding the Solicitor General “takes an average of 4.6 months to respond to invitations”).

EVALUATING A PATENT PORTFOLIO

Patent portfolio analysis often occurs during due diligence.  For example, an analysis may occur when an investor is determining whether to purchase or invest in a company.  Many times the investor obtains what they believe to be a thorough understanding of the portfolio, when in reality they only have a superficial understanding.  Below are several common errors that occur when analysing a patent portfolio.

 

1. Don’t Just Rely on the Number of Patents and Patent Applications

The most common deficiency is relying on the total number of patents and patent applications in the portfolio as an indicator of value.  The size of the portfolio may indeed be a good barometer of the overall value.  However, there are more accurate indicators.  I have evaluated relatively large patent portfolios that on initial review appear to completely cover a particular subject matter.  However, upon closer review, the portfolio does not fully cover the intended subject matter and/or there are holes in the patent coverage that would allow for a competitor to effectively practice in the area.

 

2. Understand the Scope of the Patent Claims 

The claims define the scope of protection for an issued patent.  Therefore, it is imperative that one understand the scope of the claims for each patent within a portfolio.  Each word within a claim must be analyzed to understand the scope to determine what is and is not covered by a patent.  It is surprising how often what a patent actually covers is misunderstood.  Just because a patent discloses a particular aspect within the specification does not mean that the patent covers the subject matter.  Rather, it is necessary to analyze the claims to determine how the particular subject matter is (or isn’t) claimed.  

Further, the portfolio as a whole should be analyzed to determine the extent of protection within a particular technical area.  Often times, patents include claims that complement other patents within a portfolio to obtain an overall patent protection scheme.  This is particularly true of patent families that include multiple continuation, continuation-in-part, and divisional applications that are each directed to a slightly different aspect of an inventive concept.  

Another important aspect is to determine whether any of the patents are still active (i.e., still pending).  This provides the opportunity to file additional applications on the subject matter included within the application.  This may be an extremely valuable aspect in the event a competitor is trying to design around an existing portfolio.

 

3. Prosecution History

A concept closely related to item #2 above is to analyze the prosecution history of the patents.  The prosecution history is the correspondence between the applicant and the Patent Office during the pendency of the application.  This includes the originally-filed application and associated paperwork, any rejections from the Patent Office, and any corresponding responses.  This information often provides a more thorough understanding of how the claims should be interpreted.  Further, any prior art cited in the rejections can be analyzed to determine the differences with the claimed invention.

 

4.  Procedural Issues

A final aspect for investigation is to ensure that the procedural aspects of each patent in the portfolio are correct.  This may include analyzing the declarations, assignments, priority claims, and other requirements of each patent to ensure it is correct and properly submitted to the Patent Office.

 

These concepts are a few of the major aspects to remember when analyzing a patent portfolio.  Often these four aspects will provide a good overview of the portfolio and its possible value.  

 

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