IP Law Bulletin

Most patent owners are aware that under 35 U.S.C. § 154(d), publication of a United States patent application confers provisional rights to the patent owner. The provisional rights allow an owner to collect damages for infringement of issued claims dating back to the date of publication provided that the claims are substantially similar to the claims that are included in the published application. It can often be difficult for a patent owner to prove that issued claims are substantially similar to published claims. However, even if a patent owner is able to prove claim similarity from publication to issuance, a further obstacle to collect pre-issuance damages was solidified by the Federal Circuit recently in Rosebud LMS v. Adobe Systems—the statutory requirement of actual notice. In the recent Federal Circuit decision, the Court found that constructive notice was insufficient to meet the actual notice requirement under 35 U.S.C. § 154(d), and that instead a patent owner must prove the infringer was actually aware of the patent at issue.

Patent owners recently received a favorable decision regarding exhaustion of patent rights from the en banc Federal Circuit.  The case, Lexmark International, Inc., v. Impression Products, Inc., concerns aftermarket print cartridge sales and the issue of whether Lexmark’s patent rights are exhausted by (1) sales within the U.S., despite the inclusion of a single-use/no-resale restriction, and (2) sales outside the U.S.  The Federal Circuit considered the case en banc to determine whether Supreme Court rulings in Quanta Computer, Inc., v. LG Electronics, Inc., and Kirtsaeng v. John Wiley & Sons, Inc. (see prior Nutter commentary here and here), had any effect on the previously-controlling Federal Circuit precedent.  Ultimately, the Federal Circuit distinguished the Supreme Court rulings and found for Lexmark based on the previously-controlling precedent.

In a decision likely to be lauded by patent applicants and owners, the Federal Circuit recently issued an opinion that affirms its staunch position that the bar to prove a patent owner made a disclaimer that impacts the claim scope is high. The opinion provides some useful quotes that prosecutors and litigators representing applicants and owners will likely be interested in calling upon when presenting argument against assertions that a previously taken position amounts to a disclaimer or disavowal by the applicant/owner.

In a decision dismissing plaintiffs’ claims of service mark infringement, the District of Massachusetts held that the plaintiffs’ transfer of “goodwill” in an asset purchase agreement also transferred plaintiffs’ rights to their service marks. In Pereyra and City Fitness Group, LLC v. Sedky, et al. (No. 15-cv-12854, 2015 WL 7854061, December 3, 2015) plaintiffs City Fitness and its sole owner, Roberto Pereyra, alleged that defendants unlawfully used City Fitness’s service marks after the parties executed an Asset Purchase Agreement (APA) that did not explicitly transfer the service marks to the defendants. Pereyra and City Fitness negotiated the APA with the defendants for the sale of City Fitness’s three Eastern Massachusetts health clubs, as well as the company’s assets. City Fitness operated its health clubs under the trade name “Leap Fitness” and registered two service marks under that name. The Leap Fitness marks appeared on the company’s signage, letterhead, business cards, t-shirts and its website. Defendants continued to use the marks for identification, marketing and promotional purposes after the deal with City Fitness.