Brewery Near Me: Why You Should Name Your Brewery After a Location and Related Trademark Considerations

Author: Michael Kanach

Home for the Holidays

Whether you are traveling home for the holidays or visiting an old friend, the holiday season is a time to return to old favorites. For craft beer fans visiting home and looking for a place to gather, they will notice the brewery landscape has changed over the last few years. Whether you are visiting a large city or a small town, the number of new breweries may surprise you. In fact, the number of breweries in the United States has more than tripled recently, increasing from less than 2,000 in 2010 to more than 7,000 in 2018.1 On November 20, 2018, the Brewers Association’s Bart Watson tweeted “Here are the ~1,000 breweries that have opened since last Thanksgiving,”2 with a link to a google map showing new breweries that opened between November 25, 2017, and November 17, 2018.3 In addition, numerous breweries have recently shut down, been acquired, or changed names based on trademark disputes.

Searches for “Brewery Near Me” will be trending on Google and other search engines. For example, when you type “Brewery” into Google.com or Bing.com, both search engines will propose the search “Brewery Near Me.” Alternative results include “Brewery Near My Location,” or nearby city names, such as “Brewery San Francisco” and “Brewery Oakland.” With consumers searching on maps, in search engines, and in beer-focused applications such as Untappd and RateBeer, breweries need to stand out when their name shows up on the list.

From a trademark and branding perspective, you want consumers to recognize your name – and recognize it as a source of great beer. You want your name to communicate the quality of your product and differentiate your brewery from the others in your neighborhood. In other words, you want consumers to know what they can expect when they choose to visit your brewery or drink your beer. Are you known for your rotating selection, your hazy IPAs, your flagship lager, your barrel aged stouts, your sours, or your Belgians? Or maybe you’re known for your food, your staff, or other non-beer-related aspects of running a restaurant or brew pub.

Drink Local = Higher Brand Awareness

When the message is “drink local,” and thousands of smaller breweries are opening up to serve their local communities, it can be beneficial to tell your consumers where you are located. For many breweries, their location is not simply an address in a city or a town. It is also their brand.

In a discussion with Robert Cartwright of DataQuencher, which performs surveys of beer drinkers for breweries, his surveys have shown that location names can help certain breweries increase their brand awareness. The data shows that, for breweries up to about the 20,000 barrels mark, the breweries that have a location in their name have significantly higher brand awareness than other breweries. In other words, microbreweries may benefit from their location-based names, but regional brewers may not see much additional impact.

For example, in Virginia, Blue Mountain Brewery, located in the heart of the Blue Ridge Mountains has a higher than anticipated awareness from beer drinkers in the State of Virginia. Given their production numbers (less than 15,000 barrels in 2017) and the size of the Virginia market, it would be normal for Blue Mountain to have a brand awareness in the high 20% to 35% range. Instead, DataQuencher’s recent survey results show that Blue Mountain Brewery has a brand awareness of 49% among VA beer drinkers. This location-based name may also help in each of the states through which the Blue Ridge Mountains extend—namely, Georgia, South Carolina, North Carolina, Tennessee, Virginia, Maryland, and Pennsylvania.

With respect to the San Francisco Bay Area, certain microbreweries rank higher than anticipated in “brand awareness” based on their location-based names, including San Francisco Brewing Co., Alameda Island Brewing Company, Marin Brewing Company, and Oakland Brewing Company. See the recent chart below prepared by DataQuencher. It is not surprising to see some larger breweries with location-based names, such as Sierra Nevada and Russian River, at the top of the list.


Chart reproduced and used with permission.

DataQuencher’s recent survey evidence, which shows higher brand-awareness for breweries with location-based names, is consistent with the breweries who have earned their brand awareness through decades of sales and advertising, as well as distribution through large retail chains and to multiple states. Not surprisingly, many of the largest breweries in the United States have location-based names.4 In fact, about a third (17 of 50) of the Brewers Association’s list of the 50 top selling breweries in the United States in 2017 have location-based names.

The chart below includes a list of those breweries with an explanation of their location-based name for those unfamiliar with the local references. The cites to Wikipedia are because the USPTO will often cite to Wikipedia (or Urban Dictionary!) and other websites as a basis for refusing to register geographically descriptive trademarks.

Boston (#2) a city in Massachusetts5
Sierra Nevada (#3) a mountain range in California and Nevada6
Deschutes (#10) a river,7 county,8 and National Forest9 in Oregon
Brooklyn (#11) a borough in New York City, New York10
SweetWater (#15) a creek11 and state park12 outside Atlanta, Georgia (Sweetwater Creek)
New Glarus (#16) a village in Green County, Wisconsin13
Alaskan (#19) from the state of Alaska14
Great Lakes (#20) lakes along the border of United States (Illinois, Indiana, Michigan, Minnesota, New York, Ohio, Pennsylvania, and Wisconsin) and Canada (Ontario)
Abita (#21) a town in St. Tammany Parish, Louisiana, a river (Abita River)15, and nearby springs (Abita Springs)16
Stephens Point (#23) a city in Wisconsin17
Summit (#25) a street in Saint Paul, Minnesota (Summit Avenue)
Long Trail (#31) a hiking trail which runs the length of the state of Vermont18
Rogue (#32) a river19 and a valley20 in Oregon
Uinta (#37) a chain of mountains in northeastern Utah and southern Wyoming (Uinta Mountains),21 a county,22 a reservation,23 and a National Forest24 in Utah
Lost Coast (#47) a coastal region in California25
North Coast (#48) a region in Northern California that lies on the Pacific coast between San Francisco Bay and the Oregon border26
Wachusett (#49) a mountain in Massachusetts (Mount Wachusett)27

In addition to the chart above, two more breweries in the top 50, DogFish Head (#12) and Allagash (#36), are named after small towns in the State of Maine,28 which – while nowhere close to their brewery locations29 30 – both help tell a story about the brewers’ roots and the breweries’ small beginnings.

How Does a Brewery Obtain a Trademark for its City, Town, Mountains, River, Lake, or Street?

First, a little background about trademarks. Your trademark is your name, logo, or anything else that indicates your brewery is the source of a product or service.

A mark can be:

  • a name of a beer or the brewery,
  • a drawing (e.g., The Alchemist’s Heady Topper, 21st Amendment’s various can designs),
  • a color or color scheme (e.g., Russian River’s Pliny the Elder’s red circle on a forest green label),
  • a shape (e.g., Bass’s red triangle, Heineken’s red star),
  • a design,
  • a slogan, or
  • even the unique overall “look and feel” of the brewery, product, or packaging (or other forms of “trade dress”).

You obtain common law trademark rights when you begin to use the mark. If someone else used it first, you are a junior user and they are the senior user. To obtain nationwide rights to your trademark, you can file an application to register your trademark with the United States Patent and Trademark Office (the “USPTO”).

One myth is that you don’t want to name your brewery after a location because it’s hard to get a trademark. While it is true that location-based names have inherent hurdles, including from a trademark perspective, there are also potential benefits from a trademark and branding perspective.

Those hurdles include difficulty in proving that your name is an indication that your brewery is the source of the beer. In trademark language, we call that “acquired distinctiveness,” or “secondary meaning.” It may take years for your brewery to build distinctiveness in the eyes of consumers, while a more unique and arbitrary name may obtain a registered trademark much faster.

Because locations are descriptive, the USPTO often refuses to register marks with a location is in the name. On one hand, the USPTO may refuse to register the mark because you are describing where you are located. In that case, the name is “geographically descriptive” and other breweries located there should be able to use that name to describe their brewery. One the other hand, if your name is a location where you are not located, the USPTO may refuse to register your mark on the basis that it is “geographically deceptively misdescriptive.” This means your name makes people believe you are from a location from which your beer does not originate, and that description is misleading and deceptive.

Relatedly, if you advertise your products as coming from a geographic location – but your beer is not from there – those false statements could give rise to a class action lawsuit for false advertising. Numerous lawsuits have been filed over the past several years. For example, class action lawsuits have been filed against Fosters (not imported from Australia),31 Becks (not imported from Germany),32 Kirin (not imported from Japan),33 and Red Stripe (not imported from Jamaica).34 While the breweries named as defendants in those class action lawsuits were some of the largest alcohol producers in the world – Miller Brewing Co. (Fosters), Anheuser-Busch (Becks, Kirin), and Diageo (Red Stripe) – plaintiffs could file similar lawsuits against craft beverage producers as well. So it is wise to clearly label where your brewery (or winery, meadery, or distillery) is located.

To avoid such misrepresentations in labeling and advertising, you will notice the labels for some breweries list more than one location. For example, Lagunitas clearly advertises that it is brewed in Petaluma, California and Chicago, Illinois.  Likewise, Sierra Nevada’s labels clearly advertise that it is brewed in Chico, California and Mills River, North Carolina.

While there are many considerations when it comes to branding and trademarks, these are several of the considerations with respect to location-based names. As is the case with all intellectual property, it is prudent to talk to an attorney about your strategy for obtaining and enforcing your trademarks.

For more information about trademarks and intellectual property, you can reach Michael Kanach a partner in the Intellectual Property and Food and Beverage groups at Gordon Rees Scully Mansukhani. Mike is also a practice group leader for the Beer, Wine, and Spirits Law group and the Entertainment and Recreation practice group. Mike’s email is mkanach@grsm.com and his phone number is 415-875-3211.
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1 “Number of Breweries, Historical U.S. Brewery Count,” Brewers Association, https://www.brewersassociation.org/statistics/number-of-breweries/ (as of November 19, 2018).
2 Bart Watson (@BrewersStats), https://twitter.com/brewersstats/status/1064927306571964416?s=11 (accessed (November 20, 2018, 9:03 AM)
3 “Breweries Opened in Last Year – New breweries that have opened between 11/25/2017 and 11/17/2018.” https://www.google.com/maps/d/viewer?mid=1Bw583n55Vu4ghUsUyuOcOVFzjymeBU4p&usp=sharing
4 “Brewers Association Releases 2017 Top 50 Brewing Companies By Sales Volume,” Brewers Association, March 14, 2018, located at https://www.brewersassociation.org/press-releases/brewers-association-releases-2017-top-50-brewing-companies-by-sales-volume/
5 https://en.wikipedia.org/wiki/Boston
6 https://en.wikipedia.org/wiki/Sierra_Nevada_(U.S.)
7 https://en.wikipedia.org/wiki/Deschutes_River_(Oregon)
8 https://en.wikipedia.org/wiki/Deschutes_County,_Oregon
9  https://en.wikipedia.org/wiki/Deschutes_National_Forest
10 https://en.wikipedia.org/wiki/Brooklyn
11 https://en.wikipedia.org/wiki/Sweetwater_Creek_(Chattahoochee_River_tributary)
12 https://en.wikipedia.org/wiki/Sweetwater_Creek_State_Park
13 https://en.wikipedia.org/wiki/New_Glarus,_Wisconsin
14 https://en.wikipedia.org/wiki/Alaska
15 https://en.wikipedia.org/wiki/Abita_River
16 https://en.wikipedia.org/wiki/Abita_Springs,_Louisiana
17 https://en.wikipedia.org/wiki/Stevens_Point,_Wisconsin
18 https://en.wikipedia.org/wiki/Long_Trail
19 https://en.wikipedia.org/wiki/Rogue_River_(Oregon)
20 https://en.wikipedia.org/wiki/Rogue_Valley
21 https://en.wikipedia.org/wiki/Uinta_Mountains
22  https://en.wikipedia.org/wiki/Uinta_National_Forest
23 https://en.wikipedia.org/wiki/Uintah_and_Ouray_Indian_Reservation
24 https://en.wikipedia.org/wiki/Uinta_National_Forest
25 https://en.wikipedia.org/wiki/Lost_Coast
26 https://en.wikipedia.org/wiki/North_Coast_(California)
27 https://en.wikipedia.org/wiki/Mount_Wachusett
28 “How Your Favorite Brewery Got Its Name” Thrillist, Lee Breslouer, located at www.thrillist.com/amphtml/drink/nation/dogfish-head-name-how-your-favorite-brewery-got-its-name
29 DogFish Head is a name of a small location in Southport, Maine, over 9 hours away and 573 miles away from the DogFish Head Craft Brewery location in Milton, Delaware
30 Allagash is a town and river in northern border of Maine, 5.5 hours away and 341 miles away from the Allagash Brewery location in Portland, ME.
31 “Man Sues Over Foster’s Beer Being Brewed in Texas, Not Australia,” Time, Sarah Begley (December 15, 2015), http://time.com/4148740/man-sues-fosters-beer/
32 “Anheuser-Busch Admits Beck’s Isn’t Actually German, Looks to Settle Class Action Lawsuit” Food and Wine, Mike Pomranz (June 22, 2017),  https://www.foodandwine.com/fwx/drink/anheuser-busch-admits-beck-s-isn-t-actually-german-looks-settle-class-action-lawsuit
33 “If You Bought Kirin Beer In The Last 5 Years, You Could Get $12,” Huffington Post, Harry Bradford (January 7, 2015 5:16 pm ET, January 9, 2015, https://www.huffingtonpost.com/2015/01/07/kirin-beer-money_n_6430732.html
34 “Red Stripe Is the Latest Beer to Get Sued Over Mislabeling Where It Is Brewed,” Food and Wine, Mike Pomranz (June 22, 2017) https://www.foodandwine.com/fwx/drink/red-stripe-latest-beer-get-sued-over-mislabeling-where-it-brewed

U.S. Supreme Court to Resolve Circuit Split Regarding Trademark Licensees’ Rights Upon Licensor Bankruptcy

Author: Benni Amato

According to the International Trademark Association (“INTA”), “whether a debtor-licensor can terminate a trademark license by rejection, thereby ‘taking back’ trademark rights it has licensed and precluding its licensee from using the trademark” is “the most significant unresolved legal issue in trademark licensing.” It likely will not stay unresolved for much longer; on October 26, 2018, the United States Supreme Court granted a petition for certiorari to resolve this specific issue as part of the Mission Product Holdings Inc. v. Tempnology LLC case.

Tempnology is a New Hampshire-based company that developed chemical-free cooling fabrics. It used this fabric to produce clothing that were designed to remain cool during exercise. Tempnology and Mission entered into a distribution agreement in November of 2012 that gave Mission the non-exclusive right to sell certain patented and trademarked Tempnology products throughout the world and the exclusive right to sell some of those products within the United States.

After a complex factual and procedural history, Tempnology filed for Chapter 11 bankruptcy in September 2015. The day after the filing, Tempnology moved to reject the agreement under 11 U.S.C. §365(a). After two appeals, a split First Circuit panel held that Tempnology’s rejection terminated the trademark rights licensed to Mission under the agreement.

As explained by the majority in the First Circuit decision, after a debtor-licensor files for Chapter 11 bankruptcy, it may secure court approval to “reject” any executory contract so that the other party to the contract is “left with a damages claim for breach, but not the ability to compel further performance.” Mission Prod. Holdings, Inc. v. Tempnology, LLC (In re Tempnology, LLC), 879 F.3d 389, 404 (1st Cir. 2018). “When the rejected contract, however, is one ‘under which the debtor is a licensor of a right to intellectual property,’ the licensee may elect to ‘retain its rights . . . to such intellectual property,’ thereby continuing the debtor’s duty to license the intellectual property.” The problem begins, however, with the fact that Congress left trademarks off the definitional list of intellectual properties in 11 U.S.C. §101(35A).

The First Circuit found that it made sense for Congress to have excluded trademarks. After all, “the effective licensing of a trademark requires that the trademark owner—here the debtor, followed by any purchaser of its assets—monitor and exercise control over the quality of the goods sold to the public under cover of the trademark.” Should the licensor fail to exercise reasonable control, that could result in the abandonment of its trademarks.

Thus, the First Circuit reasoned that should Mission be allowed to continue to use Tempnology’s trademarks, that would force Tempnology to choose between performing executory obligations in monitoring and controlling the quality of goods or risk losing its trademarks and diminishing their value to Tempnology. The loss of the contractual licensing value to Mission should instead be compensated via damages.

The First Circuit decision, however, was a direct split from the Seventh Circuit decision six years prior in Sunbeam Prods. v. Chi. Am. Mfg., LLC, 686 F.3d 372, 377 (7th Cir. 2012). The Seventh Circuit, with an opinion from its Chief Judge Easterbrook, stated that “[t]he limited definition in §101(35A) means that §365(n) does not affect trademarks one way or the other. According to the Senate committee report on the bill that included §365(n), the omission was designed to allow more time for study….” “What §365(g) does by classifying rejection as breach is establish that in bankruptcy, as outside of it, the other party’s rights remain in place. After rejecting a contract, a debtor is not subject to an order of specific performance…The debtor’s unfulfilled obligations are converted to damages…But nothing about this process implies that any rights of the other contracting party have been vaporized.”

Mission and its amici have urged the Supreme Court to adopt the Sunbeam approach, which allows licensees to keep their licensed trademark rights even when the debtor-licensor has successfully rejected the contract. Their reasons include:

  • Enabling the debtor to take back rights already granted to a licensee encourages them to “cut a better deal for those rights” to the detriment of the licensee through no fault of licensee’s. (Mission’s petition for writ of certiorari.)
  • “If the debtor believes its trademarks are worth the cost of monitoring, it will presumably incur that cost to preserve the value of the asset…. That decision is no different than the cost-benefit analysis debtors undertake every day when deciding whether to make an investment in an estate asset to maximize its value. It has no bearing on the question whether rejection terminates a licensee’s trademark rights.” (Mission’s petition for writ of certiorari.)
  • “A licensee who is confident that the licensor’s bankruptcy will not upend its continued right to use licensed trademarks or sell the debtor’s products under an exclusive-distribution agreement will be more inclined to enter into an agreement that creates net efficiencies for distribution and production arrangements.” (Mission’s petition for writ of certiorari.)
  • “Licensors benefit because licensees will pay more up front or in royalties for licensed rights that survive a potential bankruptcy filing by the licensor.” (INTA’s amicus brief.)
  • “Licensees, who have substantial reliance interests in the licensed trademarks (g., having hired employees and/or established manufacturing capacity to take advantage of the rights), will not suddenly find their rights rendered valueless by the licensor’s decision to terminate a trademark license agreement through rejection in bankruptcy.” (INTA’s amicus brief.)
  • “Under the First Circuit’s rule, a debtor/licensor can use the power to reject to destroy a licensee’s business or hold the licensee hostage, forcing it to pay twice for a license it had already purchased.” (Law professors’ amicus brief.)

Tempnology, on the other hand, sought to distinguish its case from that of Sunbeam’s. Sunbeam involved a “short term transitional license for sale of a finished product,” whereas the Tempnology-Misson agreement was a complex joint venture/joint marketing and distribution arrangement with a two-year wind-period that would require post-rejection interaction between the parties to ensure maintenance of quality control.

Regardless of how the Supreme Court eventually rules, having this issue settled will at least provide clarity for trademark licensors and licensees in the event of bankruptcy. We will report on the high court’s final decision.

About the author: Benni Amato is a partner in Gordon Rees Scully Mansukhani’s Intellectual Property Practice Group. Her practice focuses on litigation matters involving trademarks, copyright, trade secrets, patents, internet issues, cybersecurity, and contractual disputes, as well as domain name arbitrations and trademark and copyright prosecution and licensing. Ms. Amato’s biography can be found here.

Supreme Court Holds Lost Foreign Profits Available under §284 in Connection with Foreign Contracts

Author: John Teresinski

In WesternGeco LLC v. Ion Geophysical Corp, 585 U. S. ____ (2018), the Supreme Court weighed in again on patent matters, ruling that lost profits may be awarded for patent infringement under 35 U.S.C.  §284 based on contracts outside of the U.S. While U.S. federal laws and U.S. Patents are generally presumed to apply to U.S. territories, the Court in WesternGeco found that lost profits are recoverable for infringement resulting from a U.S. activity of shipping infringing components of a patent invention overseas. The decision marks a broadening of potential damages available to patent owners for infringement.

The case arose from a patent infringement suit initiated by WesternGeco1 asserting its patents directed to technology for ocean floor surveying. WesternGeco claimed to be the only surveyor using its patented lateral-steering technology. In 2007, ION Geophysical Corporation began manufacturing components in the U.S. for a similar competing system and then shipping the components abroad to create surveying systems that were indistinguishable from WesternGeco’s. At trial, WesternGeco proved it lost 10 surveying contracts due to ION’s infringement. WesternGeco was awarded damages of $12.5 million in royalties and $93.4 million in lost profits.

On appeal, the Court of Appeals for the Federal Circuit reversed the award of lost-profits damages. This decision was appealed to the Supreme Court and after bouncing back to the Federal Circuit, the Court granted certiorari to determine the scope of the extraterritorial application of 35 U.S.C. §271(f).

In its decision, the Court discussed the two-step framework for deciding questions of extraterritoriality of U.S. statutes. The Court concluded that conduct relevant to the statutory focus is domestic. The Court proceeded to discuss §284 regarding damages remedies and the statutory framework for infringement under §271(f). In brief, the Court concluded that exporting components from the U.S. was a domestic act of infringement under §271(f)(2). The Court also distinguished the current case from damages claims that are based entirely on injury suffered abroad.2 The decision was authored by Justice Thomas and joined by a majority of the Court (7-2). Justice Gorsuch authored a dissenting opinion joined by Justice Breyer arguing that the Court’s decision improperly extends the reaches of patent infringement.

Practitioners will surely cite WesternGeco as a basis for broadening damages claims and, in particular, claims for lost profits when there are international sales and contracts. In patent cases, lost profits awards can often surpass the amounts of a reasonable royalty. While it remains to be seen whether this case will dramatically broaden damages awards, it is likely that WesternGeco will be limited to cases with similar factual scenarios to support enhanced damages. The Court noted the nearly indistinguishable nature of the infringing products and the limited developers of the technology. A copy of the Court’s opinion can be found here.

About the author: John Teresinski is a registered patent attorney and a member of Gordon Rees Scully Mansukhani’s Intellectual Property Practice Group. His practice focuses on IP portfolio management, utility and design patent procurement, non-infringement and invalidity analyses, post grant proceedings, patent enforcement, and defense of matters for technology clients, with an emphasis on electrical and electromechanical, user experience, semiconductor, wireless communication, and display technologies in the computer and hardware industries.
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1 WesternGeco is a subsidiary of Schlumberger NV, the world’s largest oilfield services provider.
2 Citing RJR Nabisco, Inc., v. European Community,  579 U.S. ___,___ (2016) (Slip op., at 9).

USPTO Practice Change Increases Fees for Multiple Reissue Patents and Allows for Refund of Surcharge Fees

Author: Kimberley Chen Nobles

Managing a patent portfolio often includes payment of maintenance fees to keep patent rights in force. While patent owners are accustomed to the fee based system, the new practice can result in a significant increase in fees to maintain multiple reissue patents. In addition, patent owners may have an opportunity to recoup fees paid to the US Patent and Trademark Office (USPTO). Recognizing certain fees can assist with planning and portfolio management.

The USPTO recently issued a new practice and guidance for maintenance fees with respect to multiple reissue patents.2 Maintenance fees are costs associated with maintaining a patent after the patent is granted and are due for the 3rd, 7th, and 11th anniversaries of the patent grant. Failure to pay the requisite maintenance fee can lead to loss of patent rights. Managing the timing of maintenance fee payments can avoid surcharges associated with the maintenance fees.

The following is an outline of how to identify which matters the new practice applies to, how to comply with the new practice, and an exemplary scenario.

USPTO Practice for Maintenance Fee Payments (and Possible Refund!)

Effective January 16, 2018, each utility reissued patent requires its own maintenance fees. This new practice replaces the former practice of only requiring payment of one maintenance fee in the latest reissue patent. Patent owners may have to budget additional funds for maintaining any multiple reissue patents.

What is a multiple-reissue patent?

A reissue patent is a patent grant that is issued to correct an error in an earlier patent grant. In some cases, multiple reissue patents are granted. Prior to the new practice, patent owners were only required to pay maintenance fees in the latest reissue patent for a multiple reissue patent family. The USPTO may reissue a single original patent as multiple reissued patents (35 USC 251(b), 37 CFR 1.77).

Example: Original patent is issued → Patent Owner initiates a Reissue proceeding to correct a defect in the patent → Multiple reissue patents issued (e.g., Reissue Pat 1 and Reissue Pat 2)

When are the fees due?

Maintenance fees are paid in windows, either 6 months before a due date, or six months following the due date. Payments in the 6-month window following a dude date require payment of a surcharge. The due dates for each window are three years and six months (3 ½ years), seven years and six months (7 ½ years), and eleven years and six months (11 ½ years), with the due dates calculated from the original patent date.

In the current fee schedule, the 3rd, 7th, and 11th anniversary fees are $1,600, $3,600 and $7,400, respectively.

 

Maintenance Fee Guidance

  • Identify Multiple Reissue Patents, Pending Reissue Applications, and Original Patents
  • Identify Maintenance Fee Payment Dates/Payments
  • Flag/Set fee payments for Multiple Reissue Patents
  • Determine if fee payments are due/have been paid within the period of January 16, 2018 to July 16, 2018
  • Determine if refunds should be requested for surcharge payments

What about payments made prior to January 16, 2018?

The new practice applies to payments made for maintenance fees on or after January 16, 2018 even if prepaid. For reissue matters that may have already been paid, check payments made from July 17, 2017 to January 15, 2018 (for multiple reissue matters). If a payment has been made, a separate maintenance fee may be required in any earlier reissued patent(s) and original patent if there is a pending reissue application.

Payments Made in Original Patent?

The new practice changes the procedure for original patents that are the basis for reissue patents and the basis for reissued applications. Maintenance fees remain due in the original patent whenever an application for reissue of the original patent is pending on the maintenance fee due date.

Payments Made for Reissue Application about to Issue?

Maintenance fee must be paid for the original patent to maintain the last reissued patent even when the reissue patent is expected to issue within the grace period.

Example Scenario – Pending Reissue Patent

For a 7 ½ year maintenance fee due date is Feb. 27, 2018, the new practice applies. In the scenario below, two reissue patents and one pending reissue application exist due to a previous reissue application. As a result, Maintenance fees for the 7 ½ year payment (e.g., $3,600 per reissue/pending reissue) must be made in both reissue patents and the original patent.

 

Requesting Surcharge Refund

While the surcharge fee of $160 based on the current fee scale is a fraction of some of the maintenance fees, Patent owners can request a refund of the surcharge under 37 CFR 1.20(h) for payments made from January 17, 2018 to July 16, 2018. As mentioned above, the surcharge cannot be waived at the time of payment. Refund requests must be made by January 16, 2019.

1 Link to Official Notice: https://www.uspto.gov/sites/default/files/documents/reissue-mf-pay.pdf?utm_campaign=subscriptioncenter&utm_content=&utm_medium=email&utm_name=&utm_source=govdelivery&utm_term

2 Link to FAQs: https://www.uspto.gov/sites/default/files/documents/faqs-reissue-mf-pay.pdf?utm_campaign=subscriptioncenter&utm_content=&utm_medium=email&utm_name=&utm_source=govdelivery&utm_term

About the author: Kimberley Chen Nobles is a partner in Gordon Rees Scully Mansukhani’s Intellectual Property practice group. She focuses her practice on representation of technology companies worldwide in transactional and litigation matters involving patents, trademarks, copyrights, and trade secrets.  Ms. Nobles’ biography can be found here.

Craft Beer and Trademarks – 10 Takeaways from the 2017 College Football Season

Author: Michael Kanach

Nothing pairs quite like beer and football. As we approach Super Bowl LII, there is no shortage of articles informing businesses how to avoid a trademark dispute with the National Football League (NFL), particularly regarding the registered trademark “Super Bowl.”1 2 3 4 5

With advertisers paying millions of dollars for a 30 second advertisement spot during the “Big Game,” there are millions of reasons for the NFL to ask companies to cease and desist using its trademarks when used without authorization. AdAge estimates that marketers will have spent about $5.4 billion total in advertising over these 52 years of Super Bowls.6 An example of one brewery planning to make a big spend on Super Bowl Sunday is Gambrinus’ Spoetzl Brewery of San Antonio, Texas, one of the largest craft breweries in the nation.7 They are prepared to spend $1.2 million for a 30-second advertisement for its Shiner Bock beer brand to air across the State of Texas during the Super Bowl.8

According to The Brewers Association, there were more than 6,000 breweries operating in the United States in 2017.9 But, of course, not all breweries have the budget to spend on a television advertising spot during the Super Bowl, so craft breweries often have to come up with creative ways to get noticed. One way breweries have worked to obtain a local following is to support their local teams, professional and collegiate, especially during the football season. Sometimes, in this fandom, breweries (inadvertently) cross over the line into using their favorite team’s intellectual property without approval.

The following four stories from the 2017 college football season provide trademark and branding lessons for craft breweries who want to use trending themes, viral stories, names, and images from their local institutions – to sell beer.

As the images and stories below demonstrate, trademarks are not simply names, logos, and slogans. A trademark can be anything that indicates the source of a product or service. As these packages show, a trademark can be a color scheme, distinctive font, single letter, image (e.g., a train or a famous building on campus), trending hashtag, viral event, and even the design of a special necklace. The main lesson you can learn from these stories about craft breweries using others’ trademarks is to obtain prior written approval from the trademark owner.

Purdue University wins injunction over Boilermakers Beer:

In June 2016, an individual in Naples, Florida, obtained a trademark in the State of Indiana for the marks “Purdue Boilermakers Brewing” and “Boilermakers Beer” claiming first use in 2016.10 According to the defendant’s website, “Sports Beer Brewing Company™ is an intellectual property holding company consisting of a portfolio of sports trademarks, registrations and service marks for sports teams through out (sic) the United States.”11 It’s not clear whether Sports Beer Brewing Company actually brews beer themselves, since their website says they “will contract with a local micro-brewery in your area for a tasting to decide what type of beer you want to brew.”12

The Trustees of Purdue University own several federally registered trademarks, including “Purdue,” “Boilermakers,”13 and various images of trains or locomotives.14 One such registered trademark for BOILERMAKERS claims a first use in commerce at least as early as in 1959, decades before Sports Beer Brewing Company filed an application to register the trademark with the state of Indiana in 2016.15 The Trustees of Purdue University filed a lawsuit in Tippecanoe County, Indiana, to enforce their trademarks.

Purdue licenses its logos and trademarks to Peoples Brewing Company, located in Lafayette, Indiana, for labeling on a beer named “Boiler Gold.” Below left, is an image of the Boiler Gold beer can’s label,16 which contains authorized references to Purdue, a train, and the distinctive letter “P” and the school’s color scheme of “campus gold” and black.17 The infringer’s logo is shown below right, with the University’s name on a black background and underneath a gold and white-colored train.

On November 9, 2017, Purdue University obtained an injunction against Sports Beer Brewing Company and its owner Paul Parshall. The court found the defendant’s trademarks were confusingly similar to Purdue’s trademarks. The injunction read, in part, that Paul Parshall was:

… enjoined to immediately discontinue using or offering or licensing the terms “Purdue”, “Boilermakers”, “Boilermakers Beer” and “Purdue Boilermakers Brewing” or any other marks which feature the words “Boilermakers” and/or “Purdue” for any commercial purpose.

Sports Beer Brewing Company’s ownership of a state trademark did not prevent the university from obtaining an order enjoining it from selling products with the school’s names, logo, and color scheme. According to the defendant’s website, http://www.sportsbeerbrewing.com/, defendant still owns numerous other trademarks for beer names under a “claim your brand” link. These names include the following schools: Pitt (Pitt Panthers Brewing Co • Pitt Panthers Beer) and the University of Miami (Miami Hurricanes Brewing • Canes Beer), which are discussed below for other reasons.18

“Hail to Pitt” (University of Pittsburgh) – #H2P Beer Labels Removed:

In a separate dispute related to the University of Pittsburg (a.k.a. Pitt), a Pennsylvania craft brewery’s use of Pitt’s trademarks is a lesson for brewers to make sure to get written approval from the university before making any substantial investments in labels, bottles, and cans. Voodoo Brewery, located in Meadville, Pennsylvania, began selling a beer under the name “#H2P” with cans designed in Pitts’ colors and script and an image of a cathedral.19 This name “H2P” is short for “Hail to Pitt” and was a trending hashtag for the university during the college football season.20 Pitt owns a registered trademark for “H2P,” which was registered in 2011 and claimed a first use in commerce in 2010. In addition, Pitt owns at least two registered trademarks for “Pitt” with stylized font, and with a distinctive letter “P,” claiming a first use in commerce at least as early as 1990.21 22 Pitt’s colors are royal blue and yellow (or alternatively navy blue and gold).23 The Cathedral is focused throughout the University’s advertising, as shown in the school’s official “Graphic Standards.”24 The letter “P” in the brewery’s “H2P” logo appears to be the same “P” in the University’s registered “Pitt” logo, which has been used for decades.25

According to an October 2017 article in the Pittsburgh Post-Gazette, Voodoo Brewery’s brewmaster was a former Pitt student and involved in athletics, and the brewery believed it had the University’s approval because the brewery had previously sold these beers on campus.26 However, there was nothing in writing from the University approving the packaging, so the brewery was forced to cease and desist using the schools trademarked hashtag, distinctive name, images, and color scheme.

University of Miami Hurricanes – Turnover Chain IPA Changes Name to “Chains”:

Like a viral hashtag, craft breweries tend to follow trending stories relating to their local teams and try to incorporate them into their beer names, labels, and designs. In 2017, J. Wakefield Brewing, in Miami, Florida, announced that it would brew a beer called “TURNOVER CHAIN” IPA.27 The “Turnover Chain” was a reference to the 2017 Miami Hurricanes’ football team’s over-sized, Cuban-linked, gold chain with a large “U” (for Miami University) in the school’s colors: orange and green. This chain is ceremoniously placed around a defensive player’s neck to wear on the sideline after forcing a turnover.

On November 16, 2017, the University of Miami filed a trademark application for TURNOVER CHAIN for various goods (although not including beer) claiming a date of first use in commerce in September 2017. (U.S. Trademark Serial No. 87688132). In addition, the University of Miami’s “Visual Identity Manual” explains that the University’s colors are orange and green and shows examples of the “U” logo, with orange on the left and green on the right.28

 

 

 

 

 

 

 

J. Wakefield Brewing in Miami, Florida filed a Certificate of Label Approval (COLA) with the Alcohol and Tobacco Tax and Trade Bureau (TTB), which was approved on November 19, 2017.29

An article on SouthFlorida.com’s website said that a former Miami Hurricane’s football player was on board and promoting the Miami-themed beer.30 In a separate Press Release in Brewbound, the brewery discussed how the founder and brewmaster Johnathan Wakefield was a big Miami Hurricane’s fan and met with a former player. But the brewer’s status as a true fan was not enough. Neither was label approval from the government or concept approval from a former football player. The brewery did not have approval from the University.

Shortly after initial announcements of the “TURNOVER CHAIN” beer, J. Wakefield Brewing began selling a product named “Chains” which no longer included the word “TURNOVER” and no longer included a green/orange color scheme. In an article in Brewbound, a disclaimer was included and the following explanation was provided related to the beer name: “Chains, formerly known as Turnover, is not affiliated with any educational institution and is not being marketed to college students.”31

Iowa University – “Iowa City Wave” Milkshake IPA:

Ending on a high note, the 2017 college football season had a true feel-good-story based in Iowa. At the end of the first quarter, at each of the University of Iowa home football games, the entire stadium full of more than 60,000 fans would turn towards the new UI Stead Family Children’s Hospital that overlooked the field.32 The fans inside Kinnick Stadium would wave to the children and their families inside the hospital, who would wave back. If you have not seen it yet, watch a video.33 It’s powerful.

Taking this trending, season-long, feel-good, local story and imagining a way to support their local team and local children, Backpocket Brewing in Iowa decided to brew a beer and donate the proceeds to the Children’s Hospital.34 After selling the “Iowa City Wave” milkshake IPA for a limited time, the brewery delivered a check of over $600 to the hospital, posting on Twitter the following message on November 20, 2017: “Thank you everyone who came out to the taproom & enjoyed our milkshake IPA to help us raise over $600 for the @UIchildrens #IowaCraftBeer.”35

While it may not be authorized by,36 sponsored by, or affiliated with the university,37 it is nice to see the donation being put to good use. It is not clear whether the brewery and the University or the hospital have been in contact regarding this beer name. This is a unique situation – but not because the brewery is making donations to the Children’s Hospital. For example, the outcome of the trademark disputes related to Purdue, Pitt, and Miami-branded craft beer would not have been different even if proceeds of sales were donated. Rather, it is a unique situation because it is not clear who owns “The Wave.” At this time, the University has not filed an application to register a trademark containing the word “Wave” for any goods and services. However, this new tradition of the “Wave” is likely to continue into next football season and it may become a clear indication of source for the University and/or the Children’s Hospital.

Conclusion:

The following do NOT automatically authorize you to use your favorite college’s trademarks:

  1. You are “local.”
  2. You are the #1 fan of the #1 team.
  3. You registered a trademark with the State.
  4. You obtained a COLA label approval for your label.
  5. You have been using a name in your advertising for years.
  6. You donate money to the school.
  7. You got approval from alumni (not even from famous alumni).
  8. You have sold that beer at the school before.
  9. You filed an application to register a trademark with the USPTO.
  10. You are donating all proceeds of all sales.

In conclusion, get approval from the owner of the trademark. Get it in writing. And then make sure you comply with the university’s branding requirements.If you do not have approval, check the branding requirements to familiarize yourself with the school’s brand so you can make sure you do not step over the line.

While each of the examples discussed above relate to universities, these lessons apply to the major leagues as well. For example, Boulevard Brewing was one of the first breweries to work with a Major League Baseball team when it became the official craft beer sponsor of the Kansas City Royals.38 39 In the San Francisco Bay Area, San Francisco’s Anchor Brewing partnered with both MLB’s San Francisco Giants (“Los Gigantes” Mexican Style Lager) and the NBA’s Golden State Warriors – using team logos and color schemes in their packaging.40 41 In addition, San Jose’s Gordon Biersch partnered with the NHL’s San Jose Sharks by creating a special “Chum” red dry hopped ale in team colors and including the team logo.42 These examples of official sponsorships and authorized uses of trademarks include official announcements and press releases.

 

 

 

 

 

 

Michael Kanach is a Partner in the firm’s Intellectual Property and Food & Beverage practice groups, and a frequent speaker and writer on craft beer trademark law. For more information about Gordon Rees Scully Mansukhani LLP’s Intellectual Property Practice Group, including the firm’s specialization in the craft beer industry, please visit www.grsm.com/practices/food-beverage/craft-breweries and https://www.gordonrees.com/practices/intellectual-property.

Mr. Kanach is also a member of the firm’s Entertainment, Fashion, Media & Sports practice group. For more information, please visit https://www.gordonrees.com/practices/entertainment-media-sports.
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1 “How to Use the Super Bowl to Promote Your Business – Not!” Small Business Trends, Joshua Sophy, January 28, 2018. https://smallbiztrends.com/2018/01/super-bowl-trademark-rules.html
2 “Super Bowl or the Game That Shall Not Be Named!” Hop Law, Garner & Ginsburg, P.A., December 20, 2017. http://www.hoppylawyers.com/super-bowl-game-shall-not-named/
3 “The NFL Pretending Trademark Law Says Something It Doesn’t Leads To Hilariously Amateurish Ads For ‘The Big Game’ – from the the-game-that-shan’t-be-named dept” Tech Dirt, Timothy Geigner, January 29, 2018. https://www.techdirt.com/articles/20180126/09444139092/nfl-pretending-trademark-law-says-something-it-doesnt-leads-to-hilariously-amateurish-ads-big-game.shtml
4 “Making Fair Use of the Super Bowl Trademark” Duets Blog, Steve Baird, September 25, 2017. https://www.duetsblog.com/2017/09/articles/advertising/making-fair-use-of-the-super-bowl-trademark/
5 “Securing necessary copyright and trademark rights for broadcasts and promotions related to the NFL championship games and Super Bowl 52” Lerman Senter PLLC (Lexology), January 11, 2018. https://www.lexology.com/library/detail.aspx?g=92ce3502-82e6-4768-8721-d279df297589 http://www.lermansenter.com/assets/attachments/758.htm
6 “Big Game Punting: Super Bowl Scores $5.4 Billion In Ad Spending Over 52 Years” AdAge, Bradley Johnson, January 11, 2018. http://adage.com/article/special-report-super-bowl/super-bowl-ad-spending-history-charts-52-years/311881/
7 “Brewers Association Releases 2017 Top 50 Brewing Companies By Sales Volume” Brewers Association, March 14, 2018, https://www.brewersassociation.org/press-releases/brewers-association-releases-2017-top-50-brewing-companies-by-sales-volume/
8 “Craft Brewing and Distilling News for January 24, 2018” Shanken News Daily, January 24, 2018 http://www.shankennewsdaily.com/index.php/2018/01/24/20038/craft-brewing-distilling-news-january-24-2018/
9 “2017 Craft Beer In Review” Press Release, The Brewers Association, December 13, 2017. https://www.brewersassociation.org/press-releases/2017-craft-beer-review/
10 Indiana Government website trademark search page: http://www.in.gov/apps/sos/trademarks/
11 http://www.sportsbeerbrewing.com/claim-your-brand-.html
12 http://www.sportsbeerbrewing.com/about-us.html
13 U.S. Trademark Registration No. 4497301.
14 U.S. Trademark Registration Nos. 2023046 and 2023047.
15 https://www.whois.com/whois/sportsbeerbrewing.com
16 TTB ID 17283001000314 https://www.ttbonline.gov/colasonline/viewColaDetails.do?action=publicFormDisplay&ttbid=17283001000314
17 https://www.purdue.edu/brand/downloads/508_Quick-Brand-Guide-PDF-300.pdf
18 http://www.sportsbeerbrewing.com/claim-your-brand-.html (last viewed on January 29, 2018).
19 “Pitt drops trademark hammer on Voodoo Brewery’s Pitt-themed beer” Pittsburgh Post-Gazette, Adam Bittner, October 19, 2017. http://www.post-gazette.com/sports/Pitt/2017/10/19/h2p-beer-pitt-trademark-voodoo-brewery-pittsburgh-panthers-homecoming/stories/201710190025
20 H2P (standard character mark) for magnets and label pins owned by the Registrant University of Pittsburgh-Of the Commonwealth System of Higher Education (“Pitt”) (U.S. Trademark Registration No. 4014150)
21 PITT (in script lettering) for football helmets (U.S. Trademark Registration No. 4960354).
22 PITT (in script lettering) for numerous goods, including shot glasses, drinking glasses, and miniature toy helmets (U.S. Trademark Registration No. 4960171).
23 http://www.post-gazette.com/sports/Pitt/2017/06/27/Pitt-colors-change-royal-blue-and-yellow/stories/201706270143 “Will Pitt change its colors back to royal blue and yellow?” Pittsburgh Post-Gazette Kevin Stankiewicz, June 27, 2017.
24 http://www.communications.pitt.edu/Graphic-Standards.pdf
25 PITT (in script lettering) for football helmets claims to have a first use in commerce at least as early as 1973 (U.S. Trademark Registration No. 4960354).
26 http://www.post-gazette.com/sports/Pitt/2017/10/19/h2p-beer-pitt-trademark-voodoo-brewery-pittsburgh-panthers-homecoming/stories/201710190025
27 “Miami Hurricanes’ Turnover Chain becomes a beer” SouthFlorida.com, Talia J. Medina, November 15, 2017. http://www.southflorida.com/restaurants-and-bars/drinking/sf-j-wakefield-turnover-chain-miami-canes-beer-20171115-story.html
28 The University of Miami’s “Visual Identity Manual” https://ucomm.miami.edu/_assets/pdf/tools-and-resources/UMiami_IDguide_March_2015.pdf (Updated March 2015)
29 Alcohol and Tobacco Tax and Trade Bureau (“TTB”) of the U.S. Department of the Treasury’s Certificate of Label Approval (“COLA”) TTB ID: 17320001000412, approved on November 19, 2017. https://www.ttbonline.gov/colasonline/viewColaDetails.do?action=publicDisplaySearchBasic&ttbid=17320001000412
30 See footnote 27: “The IPA will be brewed in partnership with former Miami Hurricanes linebacker D.J. Williams, who was a member of the 2001-2002 national championship team.”
31 “J. Wakefield Brewing to Release Chains New England-Style IPA” Brewbound, Press Release, Dec. 11, 2017. https://www.brewbound.com/news/j-wakefield-brewing-release-chains-ipa
32 “The Iowa Wave through a child’s eyes” USAToday, George Schroeder, November 2, 2017. https://www.usatoday.com/story/sports/ncaaf/2017/11/02/iowa-wave-through-childs-eyes/826378001/
33 “Iowa Hawkeyes’ new tradition is more than just a wave” ESPN, Published on Sep 30, 2017. https://www.youtube.com/watch?v=w7UqYD_owgY
34 “Iowa City Wave, Backpocket’s newest beer, will benefit the UI Children’s Hospital” Little Village Magazine, Emma McClatchey, November 2, 2017. http://littlevillagemag.com/iowa-city-wave-backpockets-newest-beer-will-benefit-the-ui-childrens-hospital/
35 https://twitter.com/BackpocketBrew/status/932722791710937088
36 See footnote 34. “Overton said he and other Iowa City natives on staff had been meaning to make a beer that pays homage to Hawkeye football. With Iowa City Wave, they not only nabbed a trademark-free title, but a way to both honor and contribute to the growing awareness of children’s hospital patients and their families by Hawk fans.”
37 According to a search of the University’s  searchable website portal, there do not appear to be any breweries listed as licensed: http://portal.uilicensing.com/index.cfm/licensee/search
38 “The Kansas City Royals have named an official craft beer. Will other teams follow?” The Washington Post, Fritz Hahn, March 10, 2017. https://www.washingtonpost.com/news/food/wp/2017/03/10/the-kansas-city-royals-have-named-an-official-craft-beer-will-other-teams-follow/ (“The Kansas City Royals have named Boulevard Brewing their official craft beer partner. According to Major League Baseball, it’s the first time a team has had an official craft beer.”)
39 https://www.boulevard.com/partner/royals/
40 “Anchor Brewing’s Golden Warriors beer for the Dub Nation” The Mercury News, Jay R. Brooks, March 27, 2017, updated March 30, 2017. https://www.mercurynews.com/2017/03/27/anchor-brewings-golden-warriors-beer-for-the-dub-nation/
41 http://www.nba.com/warriors/anchor?mpweb=1009-2132-44620
42 “Gordon Biersch’s new San Jose Sharks beer is called ‘Chum’” The Mercury News, Sal Pizarro, September 8, 2016, updated September 9, 2016. https://www.mercurynews.com/2016/09/08/gordon-bierschs-new-san-jose-sharks-beer-is-called-chum/

The Five Ws of Intellectual Property Assets in Healthcare Business Transactions

Author: Justin Puleo

Introduction

Intellectual Property (“IP”) assets are important in several types of business transactions, including healthcare business transactions. This article provides an overview of how one can best protect, transfer, and preserve IP rights pursuant to such a transaction.

Who has Healthcare IP?

Healthcare IP is a broad area. Among other things, it includes the IP of large institutions such as university medical centers conducting clinical trials, and pharmaceutical and biotechnology companies conducting drug research. It also includes the IP of smaller entities, such as physician practices making discoveries or creating new clinical devices or developing novel procedures and techniques.

What is Healthcare IP?

Healthcare IP can come in the form of patents, trademarks, copyrights, and even trade secrets. A research medical school may possess a process or method patent on a new procedure, while a pharmaceutical company may possess a product or formulation patent on a new drug. Hospitals, large ambulatory surgery centers, and even many solo physician practices may have registered trademarks on their logos, marks, and advertising. Healthcare providers and entities also may have copyright protections on their publications, protocols, and policies and procedures. Some jurisdictions have also extended IP rights to items such as patient lists under the umbrella of trade secrets. Other assets that share similarities with healthcare IP include “doing business as” (“DBA”) or assumed name filings, web domains, and even business insider knowledge and relationships.

When do you start the process of evaluating Healthcare IP?

When engaging a target healthcare company for merger or acquisition, healthcare IP should be a topic in early business negotiations and be an item in the first due diligence checklist submitted to the seller. From the buyer’s perspective, it is important to have an early handle on what IP is involved in a transaction so that the proper steps are taken to make sure it is adequately preserved and protected in the transaction. From the seller’s perspective, it is important to disclose IP and the actual rights to it so that it is clear what the buyer is buying, and also that the seller indeed possesses the rights to it in order to sell. If the buyer utilizes IP in good faith that the seller in fact did not possess, the seller could ultimately be liable via indemnification if this was not properly disclosed.

Where do you describe and list Healthcare IP?

Healthcare IP should be listed in a comprehensive and straightforward manner in the disclosure schedules to the purchase agreement. Care should also be taken to describe the IP fully and properly in any necessary assignment agreements, registration updates, and in any other required places.

Why is Healthcare IP important?

Healthcare IP is important for numerous reasons. For several entities, such as universities or pharmaceutical companies, it can represent millions, if not billions, of dollars in investment and research and development. For other smaller entities, in the instance of a trade secret, it may not necessarily represent the same kind of capital investment but it may very well still be critical to the survival of that business. Regardless of scale, it is important to maintain and also to transfer IP properly. If not secured properly, IP may be lost. For example, if a buyer does not know about acquired IP, it will not know to file regular maintenance fees and could risk cancellation of the IP. Conversely, if a buyer thinks it owns IP that it actually does not, it may end up violating another entity’s IP rights through use without knowing it. A cease and desist letter accompanied by a demand for unpaid royalties may quickly follow.

How do you secure Healthcare IP?

The best way to secure healthcare IP is to first identify the IP. As mentioned above, care should be taken to comprehensively list IP in an asset purchase agreement. In the case of a stock purchase, it is critical to ensure that the corporate entity selling its stock actually is the invention owner or assignee of record, etc., that possesses the right to transfer the IP. Then, proper steps should be taken to commemorate and transfer the IP through the deal documents and any necessary assignment agreements. Concurrently, proper notices and updates should be made to the various relevant governmental entities such as the U.S. Patent and Trademark Office, the U.S. Copyright Office, and state-level agencies such as the secretaries of state, and trademark offices, as required.

Conclusion

Healthcare IP is an important piece of healthcare transactions. For some businesses, it may represent the raison d’être for the business; for example, a big pharma spinoff whose one product is a therapeutic HIV drug. For other companies, healthcare IP could be less mission-critical. In both circumstances, however, IP is likely a valuable component of a company’s assets and should therefore be given due thought and consideration in a transaction.

About the Author

Justin Puleo is an associate attorney in the Raleigh office of Gordon Rees Scully Mansukhani, and a member of the firm’s Intellectual Property and Healthcare practice groups. He has an interdisciplinary background, which he has leveraged into a full and diverse practice. He is an experienced healthcare transactional attorney and a member of the patent bar who appreciates finding creative and regulatory compliant solutions to business concerns and initiatives. He can be reached at (984) 242-1790 or jpuleo@grsm.com.

The State of Design Patent Infringement Damages Calculations Following the Battle Between Apple and Samsung

Author: Mike Khoury

Many people have heard of the patent dispute between Apple and Samsung dating back to a 2011 Northern District of California lawsuit. In a legal battle that has lasted over 6 years, gone through two jury trials, and endured appeals to the Federal Circuit and U.S. Supreme Court, one issue remains uncertain: the measure by which to calculate damages in a design patent infringement case.

In 2011, Apple sued Samsung for infringing upon iPhone design patents. The following year, a jury awarded Apple $399 million in design patent infringement damages—Samsung’s entire profit from sales of the infringing phones. Samsung appealed, arguing that the jury’s damage award should have been limited to only part of the profit (as only part of the phone’s design was copied from Apple). After the Federal Circuit affirmed the jury’s award, Apple Inc. v. Samsung Electronics Co., 786 F.3d 983 (Fed. Cir. 2015), the Supreme Court granted certiorari and reversed. Samsung Elecs. Co. v. Apple, Inc., 137 S. Ct. 429, 434 (2016).

At the center of the Supreme Court’s decision is the damages provision specific to design patents under 35 U.S.C. § 289. In relevant part, section 289 reads: “Whoever during the term of a patent for a design, without license of the owner, (1) applies the patented design, or any colorable imitation thereof, to any article of manufacture for the purpose of sale, or (2) sells or exposes for sale any article of manufacture to which such design or colorable imitation has been applied shall be liable to the owner to the extent of his total profit[.]” (emphasis added).

In interpreting section 289 for the first time, the Supreme Court explained that “[a]rriving at a damages award under § 289 . . . involves two steps. First, identify the ‘article of manufacture’ to which the infringed design has been applied. Second, calculate the infringer’s total profit made on that article of manufacture.” Samsung Electronics, 137 S. Ct. at 434. As used in section 289, the term “article of manufacture,” the Supreme Court continued, “encompasses both a product sold to a consumer and a component of that product.” Id. In other words, “reading ‘article of manufacture’ in § 289 to cover only an end product sold to a consumer gives too narrow a meaning to the phrase.” Id. at 436 (emphasis added). However, not surprisingly, the Supreme Court stopped short of establishing a test for identifying the article of manufacture under section 289 and remanded to the Federal Circuit for reassessing damages. The Federal Circuit, in turn, remanded the case to the district court for further proceedings. Apple Inc. v. Samsung Elecs. Co., 678 Fed. Appx. 1012 (Fed. Cir. Feb. 7, 2017).

The case is now back before Judge Lucy Koh of the Northern District of California. On October 22, 2017, after Apple and Samsung briefed the issue, Judge Koh ordered a new trial. In her order, Judge Koh adopted a test proposed by the Department of Justice (“DOJ”) in an amicus brief filed in the Supreme Court appeal in this case. “The test for determining the article of manufacture for the purpose of § 289 shall be the following four factors: [1] The scope of the design claimed in the plaintiff’s patent, including the drawing and written description; [2] The relative prominence of the design within the product as a whole; [3] Whether the design is conceptually distinct from the product as a whole; and [4] The physical relationship between the patented design and the rest of the product, including whether the design pertains to a component that a user or seller can physically separate from the product as a whole, and whether the design is embodied in a component that is manufactured separately from the rest of the product, or if the component can be sold separately.” Apple Inc. v. Samsung Elecs. Co., No. 11-CV-01846-LHK, 2017 U.S. Dist. LEXIS 177199, at *111 (N.D. Cal. Oct. 22, 2017)

This test is short of a victory for either side. As Judge Koh notes, and as expected, the plaintiff bears the burden of persuasion on identifying both the relevant article of manufacture as well as the amount of total profit on the sale of that article. Id. If plaintiff succeeds in meeting both, only then does the burden shift to defendant to present evidence of an alternative article of manufacture and any deductible expenses. Id. at *111-12.

To date, it remains unclear whether this test will withstand scrutiny. That said, given that both Apple and Samsung suggested in their briefs at least some level of acceptance of the test, it is unlikely either party will challenge it. It is likely, however, that Apple and Samsung will settle their dispute short of another trial. A settlement means that, at least for now, the test will not be challenged. Since Judge Koh’s order is not binding on any court, it will be interesting to see whether other courts in the Northern District and within the Ninth Circuit will adopt the same test. But even then, short of an appeal to the Federal Circuit, the issue remains unresolved. For now, though, Judge Koh’s order provides some much-needed guidance.

A more promising appeal, however, comes from Columbia Sportswear North America, Inc. v. Seirus Innovative Accessories, Inc., Case No. 3:17-cv-1781-HZ (S.D. Cal. 2017), a Southern District of California design patent infringement case and the first case involving a jury verdict awarding damages after the Supreme Court’s Samsung decision. Like Judge Koh, Judge Marco Hernandez in Columbia Sportswear also adopted the DOJ’s test, and on September 29, 2017, the jury awarded Columbia $3 million in damages.

Judgement in Columbia Sportswear was entered on November 22, 2017. The parties have 30 days to appeal.

Stay tuned.

Craft Beer Attorneys Can Describe Their Services As Craft Beer Attorneys

Author: Michael Kanach

In an interesting case for intellectual property lawyers specializing in craft beer, distilled spirits, and wine, the trademark dispute between a dozen law firms over the use of the phrase “CRAFT BEER ATTORNEY” is now over.

Craft beer attorneys everywhere are relieved. They can go back to describing themselves as CRAFT BEER ATTORNEYS without the threat of a lawsuit due to a pending application to federally register the trademark for the phrase that describes their legal services.

Like other descriptive terms in the craft brewing industry, such as BREWING COMPANY, BREWERY, ALE, or NE IPA, and descriptive terms in the legal industry, such as ATTORNEY, ESQ. or LAW FIRM, these terms may be used without the apprehension of suit for trademark infringement when used to accurately describe one’s goods or services. Typically, an attempt to register as a trademark a generic and merely descriptive word or phrase will be refused by the United States Patent and Trademark Office (“USPTO”). The public policy behind refusing registration of these words and phrases – or disclaiming them – is to permit individuals and companies to describe their goods and services in fair competition.  In addition, such words and phrases do not indicate a single source of those goods and services, so they do not function as a trademark.

Here, the applicant, the law firm of The Craft Beer Attorney, APC, filed an application to register the trademark CRAFT BEER ATTORNEY in connection with legal services. The application was filed almost three years ago, on January 15, 2015 (Serial No. 86504533). The USPTO sent an office action refusing the mark as (1) generic, and, alternatively, (2) merely descriptive, and (3) lacking sufficient evidence of acquired distinctiveness. This was followed by the Applicant’s response, which overcame the refusals, and a notification of publication was issued on December 16, 2015. On January 5, 2016, the mark was published in the Official Gazette for the purpose of opposition “by any person who believes he will be damaged by the registration of the mark.”

Who would file an opposition? It turns out that eleven law firms filed oppositions in the allotted time: (1) Funkhouser Vegosen Liebman & Dunn Ltd.; (2) Nossaman LLP; (3) GrayRobinson, PA; (4) Tannenbaum Helpern Syracuse & Hirschtritt LLP; (5) Lehrman Beverage Law, PLLC; (6) Davis Wright Tremaine LLP; (7) Ward and Smith PA; (8) Strike & Techel LLP; (9) Martin Frost & Hill PC; (10) Spaulding Mccullough & Tansil LLP; and (11) Wendel Rosen Black & Dean LLP (See USPTO Trademark Trial and Appeal Board (“TTAB”) Opposition No. 91227647 (parent)).

In their Oppositions, the other law firms argued that the trademark CRAFT BEER ATTORNEY was generic and/or descriptive, among other things. A generic name is entitled to no trademark protection, as it is part of the common language that we need to identify such services or goods. A generic name refers to the services or goods, rather than to the mark owner’s brand for the services or goods. A descriptive name is a word or phrase that identifies or describes some aspect, characteristic, or quality of the services or goods to which the mark is affixed in a straightforward way that requires no exercise of imagination to be understood. Descriptive words must acquire distinctiveness or secondary meaning to be protectable as a trademark. In other words, the consumers must come to recognize the mark as designating a single source.

As the Ninth Circuit’s jury instructions state: “Descriptive marks are entitled to protection only as broad as the secondary meaning they have acquired, if any. If they have acquired no secondary meaning, they are entitled to no protection and cannot be considered a valid mark.” Ninth Circuit Manual of Model Civil Jury Instructions, 15.11(last modified September 2017).

These twelve parties litigated before the TTAB for more than a year and a half, and participated in discovery.

On October 31, 2017, the Applicant’s representative, Candace L. Moon, filed an Express Abandonment of Application Serial No. 86504533, seeking to withdraw the application and end the dispute over the name. As a result of the Applicant’s abandonment, judgment was entered against applicant. In a November 7, 2017 Board decision sustaining the oppositions filed by the eleven law firms, the TTAB held that oppositions were sustained and registration to applicant was refused.

Now, all of these attorneys can get back to work representing their craft beer clients and describing themselves as CRAFT BEER ATTORNEYS without the potential threat of a lawsuit.

For more information about Gordon Rees Scully Mansukhani LLP’s Intellectual Property Practice Group, including the firm’s specialization in the craft beer industry, please visit www.grsm.com/practices/food-beverage/craft-breweries intellectual property law. Mr. Kanach is a Partner in the firm’s Intellectual Property and Food & Beverage practice groups, and a frequent speaker and writer on craft beer trademark law.

Further Venue Guidance for Patent Infringement Suits

Author: Conor McElroy

As anticipated, the Supreme Court’s May 22, 2017 TC Heartland LLC v. Kraft Foods Group Brands LLC, 581 U.S. ____ (2017) ruling, which recognized 28 U.S.C. §1400(b) as the exclusive statute governing venue in patent infringement actions, has presented district and circuit courts with the opportunity to provide further guidance on §1400(b). Section 1400(b) states, “[a]ny civil action for patent infringement may be brought in the judicial district where the defendant resides, or where the defendant has committed acts of infringement and has a regular and established place of business.” Before TC Heartland, the vast majority of cases only addressed the first prong (“where the defendant resides”) due to the fact that the first prong’s standard was relatively easy to meet. Essentially, venue was proper anywhere a defendant was subject to personal jurisdiction. TC Heartland changed the analysis by determining that “resides” for purposes of §1400(b) only includes the state of incorporation. As a result, more litigants increasingly rely on the second prong (“where the defendant has committed acts of infringement and has a regular and established place of business”), which is therefore, being addressed and analyzed more by the courts.

On September 11, 2017, the U.S. District Court for the District of Delaware issued two decisions regarding venue challenges in patent cases. In Boston Sci. Corp. v. Cook Grp., Inc., No. 15-980-LPS-CJB, 2017 U.S. Dist. LEXIS 146126 (D. Del. Sept. 11, 2017) and Bristol-Myers Squibb Co. v. Mylan Pharms., Inc., No. 17-379-LPS, 2017 U.S. Dist. LEXIS 146372 (D. Del. Sept. 11, 2017), the District Court gave instructions on various aspects of post-TC Heartland §1400(b), including the burden of proof for a venue challenge, and whether TC Heartland effected an intervening change of law for waiver purposes. As for its analysis of the second prong of §1400(b), the court looked to the words of the statute, as well as some of the few decisions that applied the second prong, and determined that a permanent and continuous physical presence is required. In further elaborating, the Court noted circumstances that did not amount to a permanent and continuous presence. Specifically, simply doing business in a district or being registered to do business in a district, merely demonstrating that a business entity has sufficient “minimum contacts” with a district for purposes of personal jurisdiction, maintaining a website that allows consumers to purchase a defendant’s goods within the district, and simply shipping goods into a district are all insufficient to demonstrate that a defendant has a regular and established place of business in the district. In Boston Scientific, the court granted the defendants’ motion to transfer the case because there was not a regular and established place of business in Delaware, while in Bristol-Myers Squibb, the court ordered further discovery into how the defendant operated its business.

On September 21, 2017, the Federal Circuit also issued post-TC Heartland guidance. In In re Cray Inc., No. 2017-129, 2017 U.S. App. LEXIS 18398 (Fed. Cir. Sept. 21, 2017), the court reversed the District Court for the Eastern District of Texas’s denial of motion to transfer. In doing so, the court identified three general requirements relevant to the §1400(b) “regular and established place of business” venue inquiry. First, there must be a physical place in the district. This “place” need not be a formal office or store, but there must still be a physical, geographical location in the district from which the business of the defendant is carried out.” Therefore, mere virtual spaces or electronic communications do not meet the definition of “place.”

Second, the place must be a regular and established place of business. “Regular” means the business operates in a “steady, uniform, orderly, and methodical manner,” while “established” requires that the place in question must be “settled certainly, or fixed permanently.” Finally, the business must be “the place of the defendant.” In other words, “the defendant must establish or ratify the place of business.” Relevant considerations for this factor include whether the defendant owns or leases the place and whether the defendant conditioned employment on the employee’s continued residence in the place of business. In applying these venue requirements to the specifics of the case, the Federal Circuit found that the facts involving an employee’s home being located in the Eastern District of Texas “do not show that [the defendant] maintains a regular and established place of business in the Eastern District of Texas; they merely show that there exists within the district a physical location where an employee of the defendant carries on certain work for his employer.” Thus, the court ruled that case should have been transferred.

While the foregoing cases help to clarify how venue challenges in patent infringement cases may be evaluated, the question of proper venue is often a fact-specific inquiry. Nevertheless, as case law after TC Heartland grows, and as more and more §1400(b) challenges are litigated, the contours and confines of what the “regular and established place of business” prong requires will be clarified. But for now, TC Heartland and cases following it continue to adopt a more restrictive view on venue and the requirements for proper venue.

Protecting “The Thought That We Hate”

Author: Patrick Mulkern

The Supreme Court’s recent decision in Matal v. Tam, 582 U.S. ___ (2017) changes the trademark landscape by striking down the Lanham Act’s “disparagement clause” and rejecting the notion that trademarks are themselves “government speech.”

The Slants and Re-Appropriation of Derogatory Terms

The case stems from a trademark application filed by Simon Tam, the lead singer of the rock band “The Slants.” Although “slants” is often viewed as a derogatory term for persons of Asian descent, and despite suffering years of bullying growing up, Tam and his fellow band members (all of whom are Asian-American) sought to “reclaim” the term and turn the previously-negative stereotype into a point of pride.

Trademark registration is not required for a person or entity to use a word or phrase in commerce, but the protections afforded by the registration are often crucial in helping avoid or prevent consumer confusion regarding source or affiliation. See Matal, 582 U.S. at ___ (quoting Park ‘N Fly, Inc. v. Dollar Park & Fly, Inc., 469 U.S. 189, 198 (1985)) (“The Lanham Act provides national protection of trademarks in order to secure to the owner of the mark the goodwill of his business and to protect the ability of consumers to distinguish among competing producers.”).

Here, The Slants ran into that exact problem when other bands started to use the same name. So, in 2010, Tam and the band sought to trademark the name but their application was rejected. The U.S. Patent and Trademark Office (“PTO”) denied the application on the basis that the registration would violate the Lanham Act’s “disparagement clause”—specifically, a concern that the trademark may “disparage . . . or bring . . . into contemp[t] or disrepute” any “persons, living or dead.” See 15 U.S.C. § 1052(a).

Tam appealed at the PTO, but was denied.  He then took his case to federal court, where the en banc Court of Appeals for the Federal Circuit held the disparagement clause to be unconstitutional as an impermissible violation of the First Amendment.  See In re Tam, 808 F.3d 1321 (Fed. Cir. 2015) (en banc).  The Supreme Court affirmed.

Supreme Court Decision

The Supreme Court began by rejecting Tam’s argument that the disparagement clause did not even actually apply to his application because it allegedly only concerned “persons” (that is, individuals and juristic entities) and not racial or ethnic groups. With the scope of the clause decided, the Court then addressed the Government’s claims that (a) trademarks are government speech, and not private speech; (b) trademarks are a government subsidy; and (c) the disparagement clause should be evaluated under a new “government-program” doctrine.

The distinction between “government” speech and “private” speech was the crux of the Government’s case because Supreme Court precedent clearly established that “[t]he Free Speech Clause . . . does not regulate government speech.” Matal, 582 U.S. at ___ (quoting Pleasant Grove City v. Summum, 555 U.S. 460, 467 (2009)). With that broad exception, the Court noted how the doctrine “is susceptible to danger misuse” and for that reason “must exercise great caution before extending” the scope of government speech.

To that end, the Court reasoned trademarks are not “government speech”—despite being registered by the PTO, an arm of the Federal Government—because the government “does not dream up” the content of the marks, “does not edit” the marks, and (normally) will not reject a registration based on the viewpoint it expresses. Additionally, registration “does not constitute approval” of a mark and “it is unlikely that more than a tiny fraction of the public” knows what trademark registration even means. For these reasons, the Court determined, “it is far-fetched to suggest that the content of a registered mark is government speech.”1

The remainder of the opinion resulted in limited precedent as the Court was split 4-4 in approving differing rationales for the ultimate outcome.2 Justices Alito, Roberts, Thomas, and Breyer rejected the Government’s “subsidy” argument, namely because the PTO is not providing cash or its equivalent to trademark applicants—“quite the contrary[,] an applicant for registration must pay the PTO[.]” These Justices also declined the Government’s invitation to apply a newly suggested “government-program” doctrine to save the disparagement clause, by simply merging the “government speech” line of cases with the “government subsidy” line of cases, because the rights conferred by a trademark registration were not valuable enough to warrant protection.

In any event, Justices Alito, Roberts, Thomas, and Breyer determined viewpoint discrimination has always been forbidden when the government creates a limited public forum for private speech (which trademarks were determined to be, earlier in the opinion). The Justices reminded how “[the Supreme Court has] said time and again that ‘the public expression of ideas may not be prohibited merely because the ideas are themselves offensive to some of their hearers.’” Matal, 582 U.S. at ___ (quoting Street v. New York, 394 U.S. 576, 592 (1969)). Justices Kennedy, Ginsburg, Sotomayor, and Kagan expanded on the application of viewpoint discrimination to trademarks and agreed that the First Amendment’s prohibition of such discrimination was fatal to the disparagement clause.

Finally, Justices Alito, Roberts, Thomas, and Breyer declined to determine whether trademarks are “commercial speech”—thus making the disparagement clause subject to the relaxed scrutiny of Central Hudson—because the disparagement clause could not withstand even that lower standard of review. The clause, these Justices determined, serves no “substantial interest” and is not “narrowly drawn.” Most specifically, the argument that the Government has an interest in preventing offensive speech is completely unavailing because “the broadest boast of our free speech jurisprudence is that we protect the freedom to express ‘the thought that we hate.’” Matal, 582 U.S. at ___ (quoting United States v. Schwimmer, 279 U.S. 644, 655 (1929) (Holmes, J., dissenting)).3

Impact

This decision will likely have wide-reaching impact as individuals (i) attempt to follow in The Slants’ footsteps of reclaiming once-derogatory terms, or, conversely, (ii) attempt to capitalize on the ability to sequester certain offensive words and phrases for commercial gain through trademark registration. The effects of the disparagement clause’s demise cannot accurately be forecasted to affect any one industry and, instead, will most likely impact all commercial streams.

A notable circumstance the decision is sure to impact is the current fight between the Washington, DC NFL team (the “Washington Redskins”) and the PTO, over the “Redskins” moniker. See Pro-Football, Inc. v. Blackhorse et al., Case No. 15-1874 (4th Cir. 2015). Six of the team’s trademarks had been cancelled by the PTO after several Native Americans petitioned that they disparaged Native Americans and had been registered in violation of the Lanham Act’s disparagement clause. Given the Matal v. Tam decision and its attendant striking down of the disparagement clause, however, it is likely the Court of Appeals for the Fourth Circuit will side with the team and reinstate the trademark registrations.

In coming to that conclusion, one must question the import of how Simon Tam chose “The Slants” in an effort to “reclaim” the term whereas the NFL team can make no such claim to its selection of “Redskins.” Given the protections afforded by the First Amendment—and the prohibition on viewpoint discrimination—such a calculus is also likely obsolete.

A copy of the Court’s slip opinion can be found here.

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1 The Court made quick work to distinguish the Government’s central case, Walker v. Texas Div., Sons of Confederate Veterans, Inc., 576 U.S. __ (2015). Walker, which held Texas’ specialty license plates were government speech, was different for three reasons: (i) license plates have long been used to convey state messages; (ii) license plates are often closely identified with the State, since they are manufactured and owned by the State, designed by the state, and serve as a form of government ID; and (iii) Texas maintained direct control over the messages conveyed on its specialty plates. None of those factors are present in trademark registration.
2 Justice Neil Gorsuch was not on the Court when oral argument was heard and took no part in the consideration or decision of the case.
3 Justices Kennedy, Ginsburg, Sotomayor, and Kagan took the position that, regardless of how the private-commercial speech issue is resolved, the evident viewpoint discrimination of the disparagement clause warrants heightened scrutiny—scrutiny it cannot survive.  These Justices did go on to discuss how trademarks likely are not government speech, however, and provided examples of how trademark registration was different from other “government speech” cases. See Matal, 582 U.S. at ___ (citing Legal Services Corp. v. Valazquez, 531 U.S. 533, 540-42 (2001)) (noting viewpoint discrimination exception “where the government itself is speaking or recruiting others to communicate a message on its behalf).