Lackenbach Siegel today! Fall 2004 Newsletter

VOLUME 5 - NUMBER 6 - FALL 2004

Welcome to the Lackenbach Siegel today! Online Newsletter.

Lackenbach Siegel, whose history and achievements in intellectual property law
span most of the Twentieth Century, has practice areas which include patents,
trademarks, copyrights, unfair competition, antitrust, licensing, litigation
and all facets of computer, Internet and domain name law.

Lackenbach Siegel today and Since 1923 is all about
Patents, Trademarks, Copyrights, Domain Names,
Internet and Computer Law

Trademark Corner:
Plus notable, recent Trademarks secured by Lackenbach Siegel

Patent Corner:
Featuring patent 6,617,771 plus notable, recent Patents secured by Lackenbach Siegel

ACKNOWLEDGEMENT ZONE

Lackenbach Siegel
WINS
$1.4 MILLION FOR CLIENT

After nearly five years of contentious litigation and following a two week jury trial, Lackenbach Siegel’s lead trial counsel Robert Golden scored a $1.4 Million jury verdict against Wal-Mart Stores, Inc. and another defendant, for copyright and trade dress infringement. Lackenbach client, U-Neek, Inc., designed and sold children’s clothing to Wal-Mart and other retailers. In a matter of just a few years, U-Neek’s sales to Wal-Mart grew from few hundred thousand dollars to five million dollars a year. Then suddenly Wal-Mart stopped buying from U-Neek. On a routine buying trip in a Wal-Mart store, the principals of U-Neek discovered knock-offs of goods they had offered for sale to Wal-Mart, but which Wal-Mart declined to purchase.

During the legal discovery process Lackenbach uncovered documents which ended up putting the nails in Wal-Mart’s coffin. Under the guise of protecting against the use of child labor, prior to buying any goods from U-Neek, Wal-Mart demanded disclosure of the identity of U-Neek’s foreign manufacturer. Thereafter, the Wal-Mart buyer set up a meeting with U-Neek’s manufacturer. During the meeting, the Wal-Mart buyer viewed samples of U-Neek’s goods - the same exact goods U-Neek had offered to sell to Wal-Mart. The Wal-Mart buyer took photos of U-Neek’s goods, attached them to order forms, and used the forms to purchase goods directly from U-Neek’s manufacturer. Wal-Mart did such a good job photographing U-Neek’s clothing that U-Neek’s tags and trademarks are legible, thereby removing any doubt from the jurors’ minds that Wal-Mart knowingly and intentionally infringed.

Prior to the trial, Wal-Mart offered U-Neek $390,000 in settlement. U-Neek rejected the offer and proceeded to trial, clearing the way for the jury’s $1.4 Million award.

For more information regarding this case or other intellectual property litigation issues, please ontact lead trial counsel, Robert Golden, rgolden@Lackenbach.com

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Is Lackenbach Siegel America’s Favorite Law Firm? We think we are. Just as Mueller’s thought and claimed its pasta was “America’s Favorite Pasta.” But was it? According to the Eighth Circuit Court of Appeals, it need not be the best selling brand or even a nationwide brand to make this claim. The court held the phrase was non-actionable commercial “puffing,” and not a verifiable, factual statement requiring substantiation. As America’s favorite law firm, we have problems with this decision.
To establish a claim for false or deceptive advertising under the Lanham Act, New World Pasta Co. had to establish: (1) Mueller’s made a false statement of fact about its own or another’s product; (2) the statement actually deceived or had the tendency to deceive a substantial segment of its audience; (3) the deception was material, i.e., likely to influence the purchasing decision; (4) Mueller’s caused the statement to enter interstate commerce; and (5) New World had been or was likely to be injured by the statement.
The court held that “America’s Favorite Pasta” was not a statement of fact as a matter of law, based upon a definition of “favorite” as “markedly popular especially over an extended period of time.” “Popular,” in turn, was defined as “well liked or admired by a particular group or circle.” By combining “favorite” with “America’s,” the court reasoned Mueller’s was simply claiming its pasta was well liked or admired by America, and the phrase was not a specific, measurable claim, but instead entirely subjective and vague. The Court stated that a product may be well liked, but may not dominate in market share, for example, because it is more expensive. However, the claim was not “well liked,” but “favorite,” which to America’s Favorite Law Firm implies a comparison and relative superiority. Although a product may be a favorite for a variety of reasons, there are various ways to measure approval, such as number one in sales, market share or taste.
Mueller’s appears to have had no support at all for its claim. Most troubling, the court totally disregarded consumer survey evidence that, according to New World, proved 33% of those surveyed perceived the phrase “America’s Favorite Pasta” to mean that Mueller’s was the number one brand, and 50% perceived the phrase to mean that Mueller’s was a national brand. The lower court reasoned that use of the survey in this manner would establish an improper benchmark and assign a different meaning to the phrase. However, courts routinely admit survey evidence in advertising and trademark cases to assist in claim interpretation and likelihood of consumer confusion analysis.
Despite this court’s holding, given prior case precedent, including both private party litigation and government action (Federal Trade Commission and State Attorneys General), our clients are well advised, before disseminating advertising with a slogan that may be interpreted to imply a verifiable claim, such as preference or superiority, to have a reasonable basis and substantiation for the claim, such as higher sales (in dollars or units), higher market share, superior results on taste tests, or the like.

To learn more about America’s Favorite Advertising Law Department, contact:
Cathy E. Shore-Sirotin, cshore@Lackenbach.com

Jerome H. Lemelson (1923-1997) was a gifted inventor named on more than 500 patents covering a spectrum from toys to barcode scanning technology. Lemelson, at the time of his death, was estimated to be worth over two hundred million dollars. The basis for this wealth rests in large part on two patent applications filed in 1954 and 1956 for machine vision systems, but manipulated to delay issuance as patents for decades. As a result, the Lemelson patents are widely known as the best examples of “Submarine Patents.”

Submarine Patents are those patent applications intentionally prosecuted for long periods in secret by filing a series of “continuation” applications, to delay ultimate grant and add additional claims. While recent amendments to the Patent Act mandating patent application publication effectively ended the potential for submarine patents, there remain both existing patents having a “submarine-like” history and situations where prosecution may take many years.

“A bar code is an array of light and dark areas called bars and spaces which are arranged in sets of predefined patterns which, when put together in a particular sequence, encode information.”

In Lemelson’s case, the initial filings in 1954 and 1956 were prosecuted in secret for 18 to 39 years, and blossomed into roughly 180 patents issued throughout the 1970-1994 time frame. Many are still pending, having claims often reading directly on existing bar code scanning technology manufactured and used by well-known corporations. The claims were amended over the years to follow the products of such companies as they were introduced.

During the late 1980’s Lemelson threatened patent infringement suits against hundreds of companies, granted licenses under these patents and sued hundreds of others. Lemelson’s basic strategy had been to avoid suit against the large “deep-pocket” multinational companies, and instead target smaller bar code end users which are less able to defend themselves, thus forcing monetary settlements.

Now finally the Lemelson strategy has seemingly been torpedoed. In January 2004, a Nevada court held invalid 14 of the roughly 185 patents held by Lemelson’s company, ending a long series of successful litigations. The District Court found that Lemelson’s 18 to 39 year delay prosecuting the asserted claims was unreasonable and unjustified (and therefore inequitable) and thus, the doctrine of prosecution latches attached. The court also noted that if the defense of prosecution latches does not apply for the Lemelson facts, the court could not envision any situation where the defense would apply. The patents were held unenforceable under the doctrine of prosecution laches, a seldom used equitable remedy recognized first by the Supreme Court over 150 years ago in Kendall v. Winsor, 62 U.S. 322 (1858). The essence of the doctrine is orchestrated delay.

> prosecution laches may exist where a patentee’s conduct in securing his patents includes an unreasonable and unexpected delay in prosecution, even though the patentee complied with all ertinent statutes and rules; and

In a clear victory, Lackenbach Siegel representing The Walt Disney Company, succeeded in obtaining unique Certificates of Correction that place the public on notice that certain third party design patents incorporated trademarks and copyrights of Disney in the patented designs. The design patents secured by someone else contained representations of Disney characters integrated in the products subject of the design patents, without the consent of Disney. Taking advantage of fairly recent rules changes, Lackenbach Siegel was able to have such issued patents corrected to contain the following prominent notice:

IMPORTANT NOTICE TO PUBLIC
The Subject matter depicted in this patent incorporates:

1. A trademark of The Walt Disney Company. Unauthorized sale or offer for sale of products incorporating such trademark may constitute trademark infringement, both prior or subsequent to the expiration of this patent, and may subject infringers to legal action; and/or

2. Copyrighted subject matter owned by The Walt Disney Company. Unauthorized copying of the copyrighted material, or manufacture or sale of products incorporating same may constitute copyright infringement, both prior or subsequent to the expiration of this patent, and may subject infringers to legal action.

Thus, although the USPTO may not yet have a uniform or set policy in protecting trademarks or opyrights of well known companies like Disney in third-party patents, these certificates give the public proper and fair notice to be aware that all that is shown in an expired design patent is not automatically in the public domain and cannot be copied with impunity.

Lackenbach Siegel now provides electronic patent filing and other electronic filing services, resulting in reduced filing times and immediate access to status information.

Lackenbach is part of the top 2% of U.S. patent law firms that provide electronic patent filing and immediate application status via the United States Patent and Trademark Office’s Electronic Business Center (EBC) and our Private PAIR connection. Our first electronic patents were filed this spring, and we have expanded from there with the use of the PCT Easy filing software. These changes provide a wider and more adaptive range of patent services to our clients including:

< Revision of initial filing prior to publication enabling an effective public notice function and allowing immediate filing of foreign applications;

< Electronic filing of extensive DNA and other mass-data filings; and

< Same day patent assignment recordations.

Lackenbach Siegel, LLP
Lackenbach Siegel Building
One Chase Road Scarsdale
New York 10583 U.S.A.
Phone: (914) 723-4300 - Fax: (914) 723-4301
E-Mail: mail@Lackenbach.com
http://www.Lackenbach.com

This online Lackenbach Siegel, LLP newsletter was also designed and produced in a hardcopy version by:

If you would like your own hardcopy 8-page Lackenbach Siegel, LLP today! newsletter, please send an eMail to:

Howard N. Aronson
Managing Partner, Lackenbach Siegel, LLP

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