Index of 2010 Articles

by Christina Frangiosa


Welcome to a new year, and a new Congress. As of January 5, 2011, the 112th Congress began. According to the U.S. Congress’s web site, here’s how Congressional schedules work: “A new Congress begins at noon January 3 of each odd-numbered year following a general election, unless it designates a different day by law. A Congress lasts for two years, with each year constituting a separate session.” The 111th Congress ended on December 29, and according to the Congressional Record, the 112th Congress actually started on January 5, 2011.

Before we begin discussing new IP legislation, I thought it proper to close out 2010 and provide a list of articles that were published in this blog last year:

Articles (in Reverse Chronological Order)

11/28/10 Copyright Cleanup Bill Clears Congress for Signature by Pres. Obama – Enacted legislation, Trademarks

10/18/10 USPTO Seeks Comments on Potential Trademark Misuse – Enacted legislation, Trademarks

10/13/10 Have We Lawyers Genericized “Bates” Numbers? – Trademarks

8/21/10 Awards of Attorney Fees in Copyright Infringement Cases Are Justified for “Vexatious Conduct” by Attorney – Copyright, Sanctions

7/28/10 ISPs Are Not Required to Search Independently for Potential Infringement – Copyright

7/2/10 Supreme Court Issues Opinion in Bilski v. Kappos Case – Patents

7/1/10 IPEC Releases Joint Strategic Plan on Intellectual Property Enforcement – Cabinet Positions, Counterfeiting, Enacted legislation, Government oversight

7/1/10 New Design

6/1/10 Summary of IPEC’s Responsibilities – Cabinet Positions, Counterfeiting, Enacted legislation, Government oversight

5/7/10 Reassignment of Judge for Google Book Settlement? – Google Book Project, Judiciary

4/27/10 New Law in Utah Prohibits Certain Internet Crimes – Consumer fraud, Cybersecurity, Identity theft, Privacy

4/20/10 Top 10 Ways to Preserve Your Trademarks – Speeches, Trademarks

4/13/10 Fraud on the PTO – A Trademark Perspective – Cancellation, Fraud on the PTO, Medinol, Opposition, Speeches, Trademarks, TTAB

3/18/10 SDNY Orders TAVERN ON THE GREEN Service Mark Cancelled for Fraud – Cancellation, Common law marks, Fraud on the PTO, Trademarks

3/17/10 Welcome Back

1/27/10 Temporary Hiatus

1/14/10 Netflix Sued for Alleged Privacy Violations, Part 2 of the “Two New Privacy Lawsuits Filed” Topic – Privacy

1/7/10 Two New Privacy Lawsuits Filed — Part One, Facebook – Consumer fraud, FTC, Privacy, Privacy policies, Social networking

1/7/10 FTC Releases its Staff Report on its 2/09 Fraud Forum – Consumer fraud, Cybersecurity, FTC, Identity theft, Privacy

Stay tuned for more articles on the three major topics for this blog: Copyright, trademark and privacy law.

Copyright Cleanup Bill Clears Congress for Signature by Pres. Obama

by Christina Frangiosa


The Copyright Cleanup, Clarification, and Corrections Act of 2010 (S. 3689), proposed by Sen. Leahy to make certain technical amendments to both copyright and trademark law, cleared both chambers of Congress and was sent to the White House on November 19, 2010 for review and signature. The final bill, as enrolled, can be found here.

Easily missed in this Bill is a provision modifying the Trademark Technical Amendments Act (“TTAA,” now Pub. L. No. 111-146), and in particular, the study that the Department of Commerce is obligated to perform relating to trademark misuse. The TTAA currently requires the Department to study:

1.”the extent to which small businesses may be harmed by litigation tactics by corporations attempting to enforce trademark rights beyond a reasonable interpretation of the scope of the rights granted to the trademark owner;” and
2.”the best use of Federal Government services to protect trademarks and prevent counterfeiting.”

Pub. L. No. 111-146 § 4(a). The modification in S. 3689 states, “(h) TRADEMARK TECHNICAL AMENDMENTS ACT.—Section 4(a)(1) of Public Law 111–146 is amended by striking ”by corporations attempting” and inserting ”the purpose of which is”.”

In my initial blog posting about this Bill, I had posited that Congress would not reach S. 3689 because it had been proposed so late in the session. Pundits have argued that the remaining term of this Congress would be spent drafting and passing a budget, since one had not been proposed to date. However, it appears that this amendment may be enacted before the new year. The impact of this amendment, in fact, may be minimal because the mandated study has already begun, with comments due to the USTPO before January 7, 2011.

USPTO Seeks Comments on Potential Trademark Misuse

by Christina Frangiosa


The US Patent and Trademark Office (USPTO) has posted a request for public comment “regarding their experiences with litigation tactics, especially those involving an attempt to enforce trademark rights beyond a reasonable interpretation of the scope of the rights granted to the trademark owner. The USPTO also is eliciting suggestions to address any allegedly problematic litigation tactics.” Comments are due by January 7, 2011 and the details of what to address in the comments can be found in the USPTO’s request.

This study is mandated by the Trademark Technical and Conforming Amendment Act of 2010 (see below).

Statutory Background

The Trademark Technical and Conforming Amendment Act of 2010 (Pub. L. No. 111-146) was signed into law on March 17, 2010, and generally addresses technical amendments to the Trademark Act. However, buried at the end of the law (initially proposed as HR 4515 and S 2968), is a provision requiring that the Secretary of Commerce should undertake a study to determine:

  1. “the extent to which small businesses may be harmed by litigation tactics by corporations attempting to enforce trademark rights beyond a reasonable interpretation of the scope of the rights granted to the trademark owner;” and
  2. “the best use of Federal Government services to protect trademarks and prevent counterfeiting.”

Pub. L. No. 111-146 § 4(a). The study is due within one year after the enactment of the Bill – thus placing the deadline no later than March 17, 2011.

During the debates in the Senate in early March, both Senators Coble and Johnson conceded that Section 4 (where this “study” language appears) needed work, but that the remainder of the Bill was so important that it should pass without amendment to avoid the delay of returning an amended Bill to the House for approval. (For background on legislative procedure and how Bills get enacted, see What Does the House Do? and How Does a Senate Bill Become Law?.)

Senators Coble and Johnson also explained that Senator Leahy (who had proposed S. 2968) had agreed to “improve the language” in a subsequent bill.

SEN. JOHNSON:  “However, the bill is not perfect. It includes a study provision regarding alleged trademark lawsuit abuse and small businesses. While we don’t want to delay the necessary relief to the trademark owner that this bill will provide by immediate passage of S. 2968, the ranking member and I are committed to working with Senator Leahy to refine the text of this study provision at our soonest opportunity.” 111 Cong. Rec. at H1081 (Mar. 3, 2010).

SEN. COBLE: “[T]he legislation includes a study provision that was inserted at the behest of the other body. It directs the Intellectual Property Enforcement Coordinator and the Department of Commerce to evaluate and report on treatment of smaller businesses involved in litigation. Along with Chairman Conyers and the chairman of the subcommittee, the distinguished gentleman from Georgia, I believe the study text could be clarified further.  I’m happy to report that Senator Leahy has agreed to work with us on making the necessary minor revisions to improve the language.  We intend to move this language at a later date on a different vehicle.  We just don’t want to delay further consideration of S. 2968 by requiring the other body to pass the bill for a second time.”  111 Cong. Rec. at H1081 (Mar. 3, 2010).

Indeed, Senator Leahy introduced an amendment contained within a separate bill, the “Copyright Cleanup, Clarification and Corrections Act of 2010” (S. 3689, proposed on August 2, 2010). This Bill passed the Senate and was referred to the House Budget Committee and the House Judiciary Committee before Congress when on recess. This Bill changes the focuses to “the extent to which small businesses may be harmed by litigation tactics by corporations attempting the purpose of which is to enforce trademark rights beyond a reasonable interpretation of the scope of the rights granted to the trademark owner.” (Former language crossed out; new language in bold and italics).

While the Congress may return from its current recess after the elections in order to pass a budget or appropriations measure, this Bill may not progress further before the end of the Congressional term. If that is the case, then it would need to be re-proposed in January before it can be adopted.

Comments Requested by the USPTO

In the meantime, in the absence of “improved language,” the Department of Commerce (and in particular, the USPTO) is now undertaking this study and has requested public comment, due by January 7, 2011. In particular, the USPTO has requested comment about the following topics:

. . . Although the USPTO would find it most beneficial to receive responses to every item, you may answer all or any portion of the following questions.

1.  Please identify whether you are a trademark owner or practitioner, and the general size and nature of your business or trademark practice, including the number of trademark applications and registrations your business has, or your practice handles.  Please note that the USPTO will fully consider any comments you submit, even if you choose not to identify yourself in a particular manner.

2.  In approximately the last 5 years, please describe any instances of which you have first-hand knowledge where a small business may have been the target of litigation tactics attempting to enforce trademark rights beyond a reasonable interpretation of the scope of the rights granted to the trademark owner.
3.  Please describe situations where you have been involved in receiving a cease-and-desist letter.  Anecdotal information might include, but is not limited to, a description of whether the letter resulted in the small business ceasing its use of one or more marks, or whether the sender of the cease-and-desist letter withdrew or abandoned its demands against the small business owner.

4.  Please describe situations where you have been involved in trademark litigation in state or federal courts.   Anecdotal information might include, but is not limited to, a description of whether the lawsuit settled on the basis of the small business agreeing to cease its use of one or more marks, or on the basis of the plaintiff withdrawing or abandoning its trademark-related allegation(s).  Alternatively, relevant information might include whether such lawsuits resulted in a court judgment and the nature of the judgment (such as requiring the small business to cease its use of one or more marks, assessing monetary liability (damages, lost profits, or attorneys’ fees) against the small business, requiring the plaintiff to pay the defendant’s attorneys’ fees, or imposing sanctions against the plaintiff under Rule 11 of the Federal Rules of Civil Procedure).

5.  Please describe situations where you have been involved in opposition/cancellation proceedings instituted at the USPTO against small business owners.  Anecdotal information might include, but is not limited to, a description of whether the proceedings settled on the basis of the small business agreeing to abandon its application(s) for one or more marks, or whether the proceedings settled on the basis of the plaintiff withdrawing or abandoning its notice of opposition or cancellation petition.  Alternatively, relevant information might include a description of whether such proceedings resulted in a decision by the USPTO Trademark Trial and Appeal Board (“TTAB”) refusing to register/canceling one or more marks owned by the small business, or whether such proceedings resulted in the TTAB imposing sanctions against the plaintiff under Rule 11 of the Federal Rules of Civil Procedure.

6.  Do you think trademark “bullies”[1] are currently a problem for trademark owners, and if so, how significant is the problem?

7.  Do you think aggressive litigation tactics are more pervasive in the trademark area than in other areas of the law?

8.  Do you think the USPTO has a responsibility to do something to discourage or prevent trademark bullying?   If yes, what should the USPTO do?

9.  Do you think the U.S. courts have a responsibility to do something to discourage trademark bullies?  If yes, what should the U.S. courts do?

10.  What other U.S. agencies may have a responsibility to do something about the problem?

11.  Do you think Congress has a responsibility to do something to discourage or prevent trademark bullying?   If yes, what should Congress do?

12.  Please provide any other comments you may have.

*****
[1] A trademark “bully” could be described as a trademark owner that uses its trademark rights to harass and intimidate another business beyond what the law might be reasonably interpreted to allow.

Note that this study still contemplates a focus on small businesses and promises to examine whether they are disproportionately affected by trademark owners’ enforcement activities. If the USPTO posts any of the comments it receives, I’ll try to post updates here for anything of particular interest.

Have We Lawyers Genericized “Bates” Numbers?

by Christina Frangiosa


We lawyers are enamored with the phrase “Bates numbers” – however, even if “enamored” is too exaggerated, you must agree that lawyers use that phrase a lot, especially when talking about documents produced during litigation. It generally refers to the sequential numbering applied to documents exchanged between parties during a lawsuit. See generally, “Bates numbering” on Wikipedia; see also Masters, “Acrobat, The Solo and Small Firm Litigation Tool,” ABA’s GP Solo Magazine, June 2010, ¶¶ 10-13.

So, if one party produces documents to another during litigation, every page of those documents probably bears a unique, sequential number to enable consistent and uniform identification of a particular document referenced during the lawsuit. For instance, if Defendant produces a five-page memo bearing a 2005 date, the lawyers for both parties would argue about whether it should be characterized as the “2005 memo” or the “2005 admission that Defendant was negligent.” A far less argumentative way to identify that document accurately is by its sequential page number (a.k.a. the “Bates” number). Thus, both parties can agree that the document is D1234-D1239 and then move on to their substantive arguments.

How did these page numbers start being referred to as “Bates” numbers – and why do lawyers still call them that? I don’t claim to have all of the answers on this point, but after some digging, here’s what I’ve found:

In the late 1890s, the US Patent Office issued several patents to an individual inventor who later assigned them to the Bates Manufacturing Company for various devices that enabled the sequential numbering of paper. For example, you can find the following patent files through the U.S. Patent & Trademark Office:

  • U.S. Patent No. 484,389 for a consecutive-numbering machine, issued in 1892 to Edwin G. Bates
  • U.S. Patent No. 676,084 for an automatic numbering machine, issued in 1900 to Edwin G. Bates
  • U.S. Patent No. 676,082 for an automatic numbering machine, issued in 1901 to Edwin G. Bates

Note however, that some more recent patents refer to methods of assigning “Bates numbers” in a specific way and were issued to others:

  • U.S. Patent No. 5,960,448 issued in 1999 and assigned to Legal Video Services Inc.
  • U.S. Patent No. 7,103,602 issued in 2006 and assigned to Kroll Ontrack

Even though the patents have long since expired (patents are not valid forever), the trademarks remain valid, at least in connection with numbering machines.

The Bates Manufacturing Company also applied for – and was issued – registration of its trademark BATES (stylized) claiming a date of first use since 1891 for “numbering machines” in Class 09 (Reg. No. 158,174, renewed in 2002) and in Class 07 (Reg. No. 269,975, renewed in 2010). In fact, you can order one of these devices, which still bears this trademark, from sites like Amazon.com. (Note that Class 09 is also the class in which marks associated with software programs tend to be registered.) The company also owned trademark registrations in BATES for other products like ink pads and stapling supplies.

However, it appears that these trademarks may be of limited value because in undertaking the research for this article, I found many sites marketing software versions of “bates numbering” programs (e.g., http://www.bates-stamp.com/), or offering to sell their services to manage the “bates numbering” process for litigants (e.g., http://lsilegal.com/web/Solutions/TraditionalSvcs.aspx). It appears that the mark “Bates” as applied to automatic numbering systems may have become generic for a system of automatically applying sequential numbers to documents.

In this case, the trademark owner consistently applied its graphic label (which seems to be branded onto a metal plate) to the stampers themselves, by affixing it mechanically. Even today, the stampers seem to bear this label. (See e.g., the image of a stamping machine bearing the mark – click on “specimen” after reaching the Case File – as submitted to the U.S. Trademark Office in 2010 in support of an affidavit of continuing use). But, it apparently did not protect the mark (or the mark has lost its trademark value) in connection with sequential numbering systems or services to apply these types of numbers to documents, either in hard-copy or electronic form.

The lesson to be drawn from this – when you create a unique name for a product (or service) and begin to use it in commerce in connection with that product (or service), plan ahead for the possibility that the technology in which you began using the mark will evolve into something new. At the very least, recognize that as your industry matures, your trademarks may change, even if the products or services themselves remain the same as they were when they were first introduced. While it may be wonderful when your brand name becomes a household (or lawfirm-wide) word, mark owners need to police the use of their marks to keep the their value from being undermined.

Being vigilant means a mark can last forever. History is replete with examples of brand names that were not protected adequately by their owners and now are generic to identify products of that type. For example, Bayer failed to protect the name “aspirin” in the U.S., so anyone can use the mark “aspirin” in connection with their own brand of that medication in the U.S. without violating Bayer’s trademark rights. Bayer has successfully protected “ASPIRIN” worldwide (e.g., Canada, Reg. No. NFLD761, where the mark was registered in 1919) and it remains the exclusive property of Bayer.

Awards of Attorney Fees in Copyright Infringement Cases Are Justified for “Vexatious Conduct” by Attorney

by Christina Frangiosa


In FM Industries, Inc. v. Citicorp Credit Services, Inc., the U.S. Court of Appeals for the Seventh Circuit (“Seventh Circuit”) affirmed an award of attorneys’ fees to a prevailing defendant in a copyright infringement action, explaining that plaintiff’s attorney’s conduct was “vexatious,” “amateurish and absurd”. FM Indus., Inc. v. Citicorp Credit Svcs., Inc., No. 08-3184, 2010 U.S. App. LEXIS 15057 at *4, *13 (7th Cir. July 22, 2010). Written by Chief Judge Easterbrook, this is a colorful opinion that richly deserves reading (as his opinions usually are).

Prevailing parties (whether plaintiffs or defendants) in copyright infringement actions can be awarded attorneys’ fees pursuant to 17 U.S.C. § 505 (“the court may also award a reasonable attorney’s fee to the prevailing party as part of the costs”). The Seventh Circuit explained that this provision “vindicates the public’s interest in the use of intellectual property” and that in the absence of such a provision, prevailing defendants would have “only losses to show for the litigation.” FM Indus., 2010 U.S. App. LEXIS 15057 at *12.

In this case, after the district court dismissed all of plaintiff’s claims for failure to prosecute, the court ordered plaintiff to pay attorneys’ fees of $750,000 to defendant pursuant to 17 U.S.C. § 505. The court also ruled that plaintiff’s counsel (Wayne D. Rhine) “vexatiously multiplied the proceedings and is liable for attorneys’ fees under 28 U.S.C. § 1927.” The court concluded that another lawyer, William T. McGrath (“a copyright specialist who Rhine engaged to assist him”) was jointly and severally liable for the attorneys’ fees awarded under § 1927. The total award, for which the two attorneys were jointly and severally liable, was $35,000 (“because the district judge deemed only a subset of the filings sanctionable under § 1927). The court made a separate award against Rhine for $2,694 (although the Seventh Circuit did not explain why).

The Seventh Circuit affirmed all of the attorney’s fee awards except for one: the joint and several liability award against McGrath, concluding that McGrath’s only sanctionable conduct was “making the mistake of agreeing to help a careless lawyer (Rhine) who put his name to frivolous and malicious documents drafted by a self-interested layman [the client], and then not reviewing all of the documents that [the client] prepared for Rhine’s signature.” Id. at *15.

The Seventh Circuit explained that liability under § 1927 is direct, not vicarious (Id.), and nothing required one attorney to take responsibility for another attorney’s filings in the same case. “Section 1927 does not require every lawyer who files an appearance to review and vet every paper filed by every other lawyer. Neither the text of § 1927, nor any decision of which we are aware, imposes on any lawyer a duty to supervise or correct another lawyer’s work.” Id. at *15-*16. As a result, the Seventh Circuit reversed the district court’s award of sanctions against McGrath.  Id. (“We appreciate that the judge was disgusted by the behavior of FM Industries and its counsel, but personal responsibility remains essential to an award of sanctions under § 1927.”).

Summarized below is the conduct that the Seventh Circuit cited in its opinion as supporting the various awards of attorneys’ fees in this case (“There is more, but extending this recitation would not serve much purpose” Id. at *12.):

Problems with the Complaint

  • The client’s (plaintiff’s) repeated demands for $15 billion in statutory damages (notwithstanding the statute’s limitation of $150,000 in statutory damages per copyrighted work (not per use of a copy). Rhine argued that the figure $15 billion never appeared in plaintiff’s papers. Labeling these arguments as “quibbles,” the Seventh Circuit noted that “A complaint that demands $150,000 (the statutory cap) times 100,000 (the complaint’s estimate of the number of times computers copied the software into random access memory) is demanding $15 billion. Even lawyers can multiply two numbers.” Id. at *13 (emphasis added). It seems the Seventh Circuit has a sense of humor.
  • Plaintiff also sought a separate item of damage of $7.2 million (“$150,000 times 48, the number of outside law firms that used the software” at issue in this case), which was “no more tenable than $15 billion.” Id.
  • Plaintiff also sought $ 235 million in actual damages – which plaintiff never attempted to prove. Id.

Problems with Litigation Conduct

  • The Seventh Circuit called plaintiff’s litigation tactics “extortionate” – including the subpoenaing of several law firms who were not parties to the suit, but completely ignoring the requirements of Fed. R. Civ. P. 45 (regulating the manner and extent of discovery to be sought from non-parties), and thus causing the recipients to engage in expensive efforts to respond to improperly served subpoenas. On top of that, plaintiff failed to serve proper subpoenas after being informed of the deficiencies. The Seventh Circuit labeled these efforts as “extortionate discovery, the kind a litigant undertakes when it hopes to be paid to go away.” Id. at *12.
  • Filing motions for sanctions against defendants when they missed one discovery deadline, by a single day, seeking sanctions in the amount of $ 815 million. “The defendants and district judge were not amused, but defendants had to devote substantial time (and thus expense) to responding, because if the judge were prepared to award even a tiny fraction of the request the outlay would be considerable.” Id. at *10.
  • Attempting to “force” the current and former chairs of Citigroup’s board of directors to appear for deposition “even though they had nothing to do with Citigroup’s use of [the software at issue], is further evidence that FM Industries and its lawyers were engaged in the abuse of legal process.

One of the particularly notable points the Seventh Circuit made was that Rhine had only recently returned to private practice (in 2006) after 24 years as a judge of the Circuit Court of Cook County, Illinois (which I understand to be the trial level in Illinois state court). With regard to his handling of this case, the Seventh Circuit admonished, “The problem here, and in much else that went wrong with this case, is that Rhine allowed Friedman [the client], a non-lawyer, to draft many of the papers that were filed over Rhine’s name. Rhine insists that he did not simply rent out his law license but instead reviewed and edited the documents before filing them. We accept that representation, but it also means that Rhine, who resumed legal practice in 2006 after 24 years as a judge . . . bears the responsibility for amateurish and absurd filings.” Id. at *4.

The take away? If you permit your clients to prepare the first draft of any pleading – especially where they may be inspired to vent their spleens on their opponents – be sure to really edit the result to ensure that what is ultimately filed is professional, meritorious, respectful and complies with the applicable rules of civil procedure. Ultimately, the attorney must take full responsibility for the accuracy and propriety of any filing that bears his or her signature. Such responsibility cannot be abdicated to the client, even though the client may ultimately have to pay the sanctions.