We have recently added another video to our FishFAQ video series on patents. This one covers a brief history and development of patents.
You can find the entire FishFAQ video playlist at our Youtube channel: https://www.youtube.com/@fishiplaw
We have a new FishFAQ™ video explaining the term “patent pending”, when it can be used, and some considerations to keep in mind when using the term.
You can find all the videos in our FishFAQ video series here: https://www.youtube.com/@fishiplaw
The Supreme Court recently decided, in Vidal v Elster, that the TTAB’s refusal to register the TRUMP TOO SMALL mark, was not a violation of First Amendment rights.
Back in 2018, Steve Elster sought to register a mark of “TRUMP TOO SMALL” as a t-shirt slogan. This was inspired by an exchange between Trump and Marco Rubio during the 2016 Republican primary. The PTO examiner refused on the grounds that the mark violated the ‘names clause’ of the Lanham Act. That act requires written consent for a mark containing the name of a living individual.
Elster countered that the ‘names clause’ was a violation of his first amendment free-speech rights. The examiner, however, responded that refusing registration doesn’t constitute a restriction on free speech. For reference, the PTO has also refused trademark registrations on “WELCOME PRESIDENT BIDEN”, “I STUMP FOR TRUMP”, and “OBAMA PAJAMA”.
So Elster appealed the decision before the Trademark Trials and Appeals Board. But the TTAB affirmed the original decision barring Elster from registering the mark.
Elster appealed the TTAB decision before the Federal Circuit. The Court noted that section 2 of the Lanham Act requires the PTO to refuse registration of certain categories of proposed trademarks. But in the last five years, the Supreme Court held two provisions in section 2 unconstitutional.
While the Federal Circuit acknowledged the TTAB’s point that the registration bar doesn’t “prevent Elster from communicating his message, it can legally disadvantage the speech at issue here.”
The Fed Circuit stated that it is one of the prerogatives of American citizenship to criticize public men. In fact, the first amendment has its fullest and most urgent application to speech concerning public officials.
Therefore, suppressing the right to praise or criticize governmental agents can’t be squared with the first amendment.
The TTAB acknowledged this right. But added that the government’s interest in protecting privacy and publicity rights was seen to outweigh it. The Federal court argued here that Trump, as a public political figure can’t expect privacy. It further noted that one of the fundamental reasons for trademarks in the first place is the need to safeguard against the dilution of commercial value of his name, and that was not applicable here either. In summary, the government had no valid publicity interest that could overcome the first amendment protections afforded to the political criticism in Elster’s mark. As such, the Federal Circuit reversed the TTAB’s decision.
In 2023, the Supreme court agreed to review the judgment. The point being to resolve whether the Lanham Act’s names clause violates the First Amendment.
The Supreme Court considered the issue as distinguishing between content-based, and content-neutral regulations of speech.
Content-based regulations target speech based on its communicative content and is presumptively unconstitutional. Viewpoint discrimination targets not merely subject matter, but particular views taken by speakers on the subject. Trademark restrictions that discriminate based on viewpoint violate the first amendment.
Because the names clause doesn’t single out a trademark based on the specific motivating ideology or the opinion of the speaker, it doesn’t facially discriminate against any viewpoint. But it may still be found to discriminate on viewpoint in its practical operation. Elster suggested this was the case here. It would be easier to obtain a mark if it flattered rather than mocked a subject. But there are many reasons why a person might want to withhold consent to register a trademark bearing his name.
While the names clause is not viewpoint based, it is content based because it applies to particular speech because of the topic discussed or the message expressed, so it turns on whether the proposed trademark contains a person’s name.
The Supreme Court reasoned that although a content-based regulation of speech is presumptively unconstitutional, it had not decided whether heightened scrutiny extends to a content-based, but viewpoint-neutral, trademark restriction. Trademark rights have always coexisted with the first amendment, and the inherently content-based nature of trademark law has never been a cause for constitutional concern.
Restrictions on trademarking names have historically been grounded in the notion that a person has ownership over his own name, and that he may not be excluded from using that name by another’s trademark. So the court issued a narrow decision that, in this instance, the particular restriction does not violate the first amendment.
You might be interested in this article on Trademarks too: A Tale of Trademark Law, the Rogers Test, and Parody
The US Patent Office continues to issue guidance on subject matter eligibility under 35 U.S.C. § 101. This latest July guidance addresses AI-assisted inventions, and adds very little to what we already know. Basically, AI cannot be named as an inventor, and otherwise AI-assisted inventions are prosecuted the same as non-AI assisted inventions.
All kinds of things are eligible for patentability under the USPTO guidelines: process, machine, manufacture, or composition of matter. There are some judicial exceptions that the courts have determined are the basic tools of scientific and technological work. As such, are excluded from patentability since monopolization of these tools would tend to impede innovation more than promote it. Those judicial exceptions are laws of nature, natural phenomena, and abstract ideas.
But the courts have decided that if a patent claim can recite “additional elements” that integrate the judicial exception into a practical application, then such a claim can be eligible for patentability.
In the first prong, there is an evaluation of whether a claim recites an abstract idea.
It is common for claims to AI inventions to involve abstract ideas. However, PTO personnel must draw a distinction between a claim that recites an abstract idea, and one that is merely based on an abstract idea.
The USPTO has defined three groupings of abstract ideas: mathematical concepts, methods of organizing human activity, and mental processes.
The mathematical concepts abstract idea grouping is defined as mathematical relationships, mathematical formulas or equations, and mathematical calculations. Claim limitations do not fall within this grouping merely because they are based on or involve a mathematical concept.
This abstract idea grouping covers fundamental economic principles, including hedging, insurance, and risk mitigation.
It also includes commercial or legal interactions, such as contracts, legal obligations, advertising, marketing, sales activities, and business relationships.
Additionally, it encompasses managing personal behavior, relationships, or interactions between people, including social activities, teaching, and following rules.
Courts consider a mental process abstract if it can be performed in the human mind or with pen and paper.
If the claim under evaluation is directed towards one of these judicial exception areas, then the second prong of the evaluation is to identify whether there are any additional elements that would integrate the exception into a practical application. Many claims to AI inventions are eligible as improvements to the functioning of a computer or improvements to another technology or technical field. While the courts haven’t provided an explicit text for how to evaluate the improvements consideration, they have instead illustrated how it is evaluated in numerous decisions.
A key point of distinction for AI inventions is between a claim that reflects an improvement to a computer or other technology (eligible) and a claim in which the additional elements amount to no more than a recitation of the words “apply it” or are no more than instructions to implement a judicial exception to a particular technological field (ineligible).
AI assistance is not a consideration in subject matter eligibility analysis. Patent protection can be sought for AI assisted inventions where one or more persons made a significant contribution to the claimed invention. The current guidance does not provide for recognition of tools like AI for inventorship purposes.
The recent case, Zimmer Biomet Holding v Insall, resulted in a judgment requiring the licensee to continue paying royalties after patent expiration. The holding conflicts with Supreme Court precedent, but was upheld based on the arbitrator’s unreviewable interpretation of the agreements.
There are two key precedents at issue in the Zimmer dispute: Brulotte v Thys, and Kimble v Marvel.
In Brulotte, the Supreme Court held that it is unlawful per se to have a royalty agreement extending beyond the expiration date of the patent. This was called the Brulotte rule. The rule was widely criticized at the time (1964), and the rule continued to receive criticism through the years. In Kimble, the Court provided a carve out: “post-expiration royalties are allowable so long as tied to a non-patent right”.
The dispute between Zimmer and Insall centered around a license to a knee replacement technology. The original 1991 agreement defined specifically that Zimmer would pay royalties to Insall on the sale of products covered by Insall’s patents. But in 1998, the agreement was updated. The update stipulated that 1% of royalties would be calculated on sales of Zimmer’s NexGen Knee family of products. Those weren’t necessarily covered by the patents.
After the Insall patents expired in 2018, Zimmer stopped royalty payments but continued to sell the products. When challenged, Zimmer argued that Brulotte rendered any post-expiration royalties unenforceable.
The parties went to arbitration in 2019, and the arbitration panel sided with Insall. The amendments to the royalty agreement effectively divorced royalties from Insall’s patents and instead married them to NexGen marketing.
The issue was brought to the district court when Zimmer tried to get the arbitration award vacated on the basis that it violated the public policy established in Brulotte. The Insall estate motioned to dismiss and asked the court to uphold the arbitration’s decision. The district court agreed with the Insall estate and confirmed the arbitration award.
Zimmer then appealed this to the Seventh Circuit court. The Circuit court stressed that “arbitration awards are largely immune from…scrutiny in court” under the Federal Arbitration Act.
Under that act, arbitration awards can generally only be appealed on very narrow grounds. Those grounds were where the award violates some well-defined and dominant, explicit public policy. Then an arbitral award can be vacated. And even then, a court is bound by the arbitrator’s interpretation of the underlying contract in such an evaluation.
The essential question was what the royalties were based on. If they were based on Insall’s patent rights, as the original 1991 royalty agreement stipulated, then the agreement was unenforceable under Brulotte. If they were based on non-patent rights, as the 1998 amendment stipulated, they would be permissible under Kimble.
The Circuit court decided the 1998 amendments were within the arbitrator’s unreviewable authority.
Zimmer tried arguing that the amendment changed how the royalties were calculated, not why they were paid in the first place. But the court noted an “arbitration clause delegates interpretive power to the arbitrators. We don’t ask whether they read the language correctly, it is enough that they tried to apply the contract that the parties signed.”
Other articles related to Patent litigation that may be of interest: Cellect v. Vidal and the future of Patent Term Adjustment
In May 2024, the Federal Circuit issued a decision concerning a patentee’s use of Amazon’s patent enforcement process, called APEX.
Briefly, Amazon has a low-cost procedure, the Amazon Patent Evaluation Express Procedure, or APEX. The service is meant to resolve patent infringement issues for products sold on Amazon’s website. The process is meant to take only 7 weeks to get a final disposition, and costs $4000. There are several other private sales-channel enforcement processes that are becoming more popular, given the low cost and relative quickness of getting a resolution.
LDG, a Delaware LLC with headquarters in Arizona, is the owner of a patented electrical receptacle with additional functions. SnapPower, a Utah company designs, markets and sells electrical outlets as well, and uses Amazon.com as a sales channel.
In May 2022, LDG submitted an APEX challenge alleging SnapPower sold products on Amazon infringing one of LDG’s patents. Amazon notified SnapPower and both LDG and SnapPower exchanged emails and held a conference call but came to no agreements.
SnapPower subsequently filed an action for declaratory judgment of non-infringement in its home state of Utah. LDG asked to have this dismissed for lack of personal jurisdiction, which the district court granted. The court said LDG’s allegations were directed towards Amazon in Washington, where the APEX agreement was sent.
But the Federal Circuit reversed the district court’s decision on jurisdiction.
The court laid out a three-factor test for whether specific personal jurisdiction comports with due process:
SnapPower argues that LDG purposefully directed enforcement activities at Utah when it initiated the APEX program. The court agrees that LDG did so, intending effects which would be felt in Utah, so the first element is satisfied.
LDG argues SnapPower’s action for declaratory judgment of non-infringement does not arise from, or relate to, any activity by LDG in Utah because the APEX agreement was sent to Washington, not Utah.
The court held however, that LDG’s actions in submitting the APEX agreement was directed towards SnapPower in Utah and aimed to affect marketing, sales, and other activities in Utah, SnapPower’s suit arises out of the defendants’ activities within the forum. The second element is now satisfied.
With the first two elements being satisfied, specific jurisdiction is presumed reasonable.
LDG, however, argues it is unfair and unreasonable. Ruling for SnapPower in this instance would open the floodgates of personal jurisdiction and allow suits against any APEX participant anywhere in the country. The district court agreed with LDG. It noted that principles of fair play afford a patentee latitude of its patent rights without subjecting itself to jurisdiction in a foreign forum.
The Federal Circuit, however, disagreed and ruled that LDG did not meet its burden to present a compelling case of other considerations that would render jurisdiction unreasonable. First, the Federal Circuit contested that the floodgates would be opened on personal jurisdiction. Second, disagreed that such a thing would be inherently unreasonable. The Federal Circuit said LDG initiated a process in APEX that, if SnapPower had taken no action, would have affected sales in Utah. LDG has not articulated a compelling argument for why it would be unfair or unreasonable for it to be subject to specific personal jurisdiction in Utah under these circumstances.
Other articles related to patent law and infringement: Cellect v. Vidal and the future of Patent Term Adjustment