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This week in IP: Illinois TM cases soar, IP rights bring riches, skinny label case revived

Managing IP rounds up the latest trademark, copyright and patent news, including some stories you might have missed

Illinois district trademark cases blow up

The District Court for the Northern District of Illinois witnessed an explosion in trademark cases last year, probably because of the rise in counterfeiting during the COVID pandemic, Managing IP revealed this week.

While cases fell in almost every other trademark litigation hotspot in the US, including in the Central District of California and the Southern District of New York, the Illinois court received 41% more cases in 2020 than in 2019 – rising from 458 to 650.

Frank Angileri, president at Brooks Kushman in Michigan, says he suspects the rise is due to the court being seen as more open to anonymising and consolidating cases, which helps trademark owners more effectively fight counterfeiting.

Managing IP analysed data taken from the Docket Navigator database to determine the top venues for trademark litigation last year, as well as the businesses and law firms that filed the most complaints.

Click here to read the full article.

Other Managing IP stories published this week include:

New copyright chief reveals plans for office she’s ‘always loved’

Diagnostics firms want American Axle to drive S 101 change

Podcast: Who owns the rights to a robot’s art?

Trademark counsel reveal must-haves for portfolio management

IP counsel bemoan demands of ASEAN anti-fakes enforcement

FDA approval a ‘real challenge’ for pharma trademarks in 2021

Counsel reveal how they pick venue in trade secret cases

Food for thought: GI owners call for better online enforcement

Biscuit ruling could ‘eviscerate’ trade dress rights, say counsel

EUIPO-EPO report shows companies with IP make more money

A report released on Monday, February 8, by the EUIPO and EPO found that companies with an IP portfolio earned 20% more in revenue per employee than companies without one.

The report, which analysed a sample of 127,000 European firms across 28 EU member states, also highlighted that IP-owning companies paid salaries that were 19% higher than their non-IP counterparts.

Results from an econometric analysis made it possible to isolate the effect of IP ownership from other variables such as industry, size of the firm and country of operation.

A positive association was also found between IP ownership and economic performance, with revenues per employee being 55% higher for IP owners.

On SMEs, the report showed that only 9% of European small businesses owned any IP, but that companies that did generated 68% higher revenues per employee than similarly sized businesses without IP.

Federal Circuit to rehear controversial skinny label case

The US Court of Appeals for the Federal Circuit announced on Tuesday, February 9, that it would vacate its October 2020 ruling that Teva infringed GSK's patent for the branded drug Coreg even though Teva had carved out the patented use from its skinny label. 

The entire court will rehear the caseon February 23. Pharma counsel will almost certainly be perched on the edge of their seats until the appellate court issues its second judgment and ultimately decides whether generics can continue to use skinny labelling to manufacture drugs for uses that are not protected by patents.

Aziz Burgy, partner at Axinn Veltrop & Harkrider in Washington DC, says the Federal Circuit’s October ruling was viewed as controversial by many because it essentially nullified the practice of skinny labelling, despite express congressional approval of the practice. 

The associate general counsel at a pharmaceuticals company in the US adds: "The outcome of this case could significantly change my strategies for both the branded and generic drugs I manage. Secondary patents will suddenly become much more important if the judgment is upheld, when they really used to be only a secondary concern."

The case started when GSK sued Teva in the District Court for the District of Delaware in 2014. A jury found in 2018 that Teva induced infringement through its skinny labels and full labels and awarded GSK $234.1 million in lost profits and $1.4 million in reasonable royalty damages.

After the jury trial, Teva filed for a motion for judgment as a matter of law that GSK had not presented sufficient evidence to support a finding that Teva had induced infringement. The district court granted this motion and decided that Teva’s actions had not induced infringement from any doctor. This decision led GSK to appeal the case to the Federal Circuit.

Judges Pauline Newman and Kimberly Ann Moore ruled in GSK's favour in October, but Chief Judge Sharon Prost dissented.

In her dissent, Prost wrote: “Contrary to Congress’s intent, the majority thereby allows one patented method to discourage generics from marketing skinny labels—thus slowing, rather than speeding, the introduction of low-cost generics.”

Enlarged Board of Appeal considers legality of virtual hearings

On Monday, February 8, the EPO’s Board of Appeal referred a question to the Enlarged Board of Appeal on whether all appeal hearings could be held virtually without the consent of both parties involved.

The referral was made during oral proceedings in appeal case T1807/15, represented by Reddie & Grose, and might mean that parties who do not wish to have their hearings heard virtually could have their cases delayed pending the outcome of the EBoA’s decision.

Some in-house counsel told Managing IP last year that they didn’t like virtual conferences at the EPO because they could slow down proceedings if connectivity issues arose, and made it more difficult to present complex arguments in an efficient way.

Others told this publication, however, that patent owners were inappropriately declining virtual appeals at the EPO to slow proceedings and delay the invalidation of low-quality patents.

Virtual hearings were introduced at the EPO in response to COVID-19, and were intended to help the office avoid a backlog of cases building up while travel and social distancing restrictions were in place.

In November 2020, the EPO issued a statement that all examination and opposition proceedings would be virtual until September 2021, and that after January 4 2021, the need for both parties to consent to virtual proceedings would be removed.

The EBoA has yet to announce when it will decide on the legality of virtual hearings. There has also yet to be an official announcement on the status of pending virtual hearings since this referral.

ITC issues LG trade secret win in car battery suit

On Wednesday, February 10, the US International Trade Commission sided with LG Chem in its bid to block electric-vehicle batteries made by fellow Korean company SK Innovation from being imported to the US.

The full commission found that SK had acted in bad faith to hinder the investigation and administration of justice, and imposed a 10-year-long exclusion order on the importation of the firm’s batteries, battery cells, battery modules and battery packs.

The ITC also issued a complementary cease-and-desist order to prevent SK from making or selling these products in the US.

LG had argued that SK, also based in South Korea, had unlawfully relied on LG’s trade secrets to produce its pouch-type, lithium-ion batteries.

The company filed its complaint at the ITC in April 2019, in which it accused SK of hiring dozens of former LG engineers, manufacturing and critical business services staff to steal trade secrets.

"SK’s total disregard of our warnings and intellectual property rights gave us no choice but to file this case and we are grateful to the International Trade Commission for protecting our innovations and significant economic investments in the United States," said Jong Hyun Kim, CEO of LG Energy Solution.

The role of the ITC in settling IP disputes could become more important this year, as litigants increasingly choose the forum to avoid the long waiting times at the district courts.

China reveals next steps for patent linkage

China’s IP office published draft measures on Tuesday, February 9, on implementing the patent linkage system adopted under the country’s recently amended patent law.

These measures, which should come as good news to those lawyers who wanted more clarity on patent linkage in China, set out how administrative adjudication procedures aiming to challenge marketing authorisation (MA) applications for patented drugs would work.

China’s patent law was amended in October last year. Among the amendments, which come into force in June this year, was a new legal framework for a patent linkage system.

This system will reportedly introduce a process whereby the issuing of MAs for generic drugs will, to a certain extent, be made dependent on the absence of infringement claims by patentees.

The amendments set out that during the MA procedure for a generic, a patentee can bring either a judicial infringement proceeding before a court or an administrative procedure before CNIPA, the IP office.

China’s Supreme People's Court has already proposed its draft rules on the judicial procedure.

Aunt Jemima brand axed; renamed Pearl Milling Company

DrugsEight months after it announced plans to axe its offensive brand, PepsiCo said on Tuesday, February 9, that it will rebrand its Aunt Jemima mix, syrup, and breakfast food products as Pearl Milling Company this summer.

PepsiCo said its products, which will maintain the red-and-yellow packaging found on Aunt Jemima boxes and bottles after they’re rebranded, will be available under the Aunt Jemima name but without the character image until June.

The company said that as part of this rebrand, Pearl Milling Company will soon announce details of a $1 million commitment to empower and uplift black girls and women, in addition to its $400 million commitment over the next five years to support black businesses and communities.

Following the tragic killing of George Floyd in the US last year, several companies announced they were either dumping or reviewing certain brands because of the stereotypes depicted.

Aunt Jemima, a 130-year-old brand that had long been criticised for depicting a caricature of a black maid, was one of the first food companies to say it was changing its logo.

Managing IP reported last year on why offensive brands should be retired, and how companies might avoid similar public relations backlashes in the future.

USPTO sued over PTAB discretionary denial policy, again

US Inventor, an organisation which advocates for strong patent rights for inventors, filed a lawsuit against the USPTO in the District Court for the Eastern District of Texas on Monday, February 8, over the discretionary denial rules for Patent Trial and Appeal Board decisions.

This is the second time that the patent office has been sued for this policy on discretionary denials. The case has been assigned to Chief Judge Rodney Gilstrap.

US Inventor filed the complaint after the District Court for the Northern District of California ruled on February 5 that the organisation could not intervene in a lawsuit filed against the patent office by Apple, Google, Intel and Cisco over the office’s NHK-Fintiv rule. 

The rule allows the PTAB to deny institution of inter partes reviews based on parallel district court proceedings on the same challenged patents.

US Inventor said it agreed with the tech companies that the PTAB’s procedures were too unpredictable and that the patent office was violating the Administrative Procedures Act and the America Invents Act, which compel offices to implement regulations through notice-and-comment rulemaking.

But the organisation said it disagreed on the appropriate remedy. It wants the court to compel the USPTO to issue notice-and-comment rulemaking on discretionary denials and to prohibit the USPTO director from granting institution in any PTAB trial before this rulemaking is complete. 

It also wants the court to prohibit the director from requiring PTAB panels to treat any previous board decisions analysing discretionary considerations as precedential until the rulemaking is finished.

Houston, we have a conference … maybe

INTA will hold its annual meeting in Houston, Texas, in the autumn as a mix of in-person and virtual events, it was revealed last Friday, February 5.

CEO Etienne Sanz de Acedo said the meeting, which is scheduled to take place between November 15 and 19, had been “pushed as late into the year as possible in the hope that an in-person gathering will be feasible then”.

Last year’s annual meeting was originally scheduled to take place in Singapore at the end of April. Organisers then postponed the meeting until November and moved it to Houston, before eventually deciding to host an all-virtual event.

The new date supersedes INTA’s original plans to hold an in-person meeting in San Diego, California between May 1 and 5. These plans were cancelled because of COVID-19 safety concerns.

According to INTA, the Houston conference will offer a mix of in-person and virtual programming and will feature educational programming, business development, and social networking opportunities.

INTA’s other offerings this year will be held virtually, including its conference in March called ‘2021 What’s Next for Brands: A View from Europe’ and the 2021 leadership meeting between May 3 and 7.

Managing IP has repeatedly covered INTA's annual meeting, including last year during the organisation's first fully-virtual meeting. Watch this space for our reporting in November. 

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