Friday, January 24, 2014

US Supreme Court Affirms Burden Of Proof Always On Patentee, Even When Another Party Asks For Declaratory Judgement Of Non-infringement

On January 22, 2014, the US Supreme Court issued a ruling in Medtronic Inc. v. Mirowski Family Ventures LLC sure to garner the interest of the US patent bar. A unanimous Court found that the burden of proving infringement of a patent lies with the patentee; even when the latter is a defendant in a declaratory judgement action for non-infringement initiated by another party. 

The Petitioner Medtronic designs and manufactures medical devices. The Respondent Mirowski owns certain patents relating to “implantable heart stimulators”. The Petitioner and Respondent entered into a license agreement by which the Petitioner would have the right to practice the Respondent’s patents in exchange for royalty payments. 

Image by Stuart Miles
The license contained provisions under which the Respondent could challenge whether certain products manufactured by the Petitioner embodied the patent. The Respondent did make such a challenge; the Petitioner disagreed. 

Upon the breakdown of negotiations, the Petitioner brought an action for declaratory judgement in the Federal District Court in Delaware, asking the Court to declare the disputed products as not infringing the Respondent’s patents. The Trial Judge granted the motion placing the burden of proving infringement on the Patentee, the Defendant in that proceeding. 

This holding was reversed on appeal by Court of Appeal for the Federal Circuit following its own reasoning in MedImmune, Inc.v. Genentech, Inc., 549 U. S. 118, 129. In that case, the CAFC found that specifically in the case of a license, when a licensee brings a claim under the Declaratory Judgement Act, it has the burden of proving non-infringement. 

Writing for a unanimous Court, Justice Breyer reversed the CAFC, agreeing with the Trial Judge that the burden of proving infringement should lie with the patentee in these circumstances. The Court’s ruling in this case effectively overturns the CAFC’s holding in MedImmune

The burden of proof in a regular infringement action lies with the patentee. Justice Breyer found that it would be consistent for that burden to remain with the patentee even when they are not responsible for initiating proceedings. 

The declaratory judgement mechanism is a procedural one. The Court made clear that the substantive law, including which party has the burden of proof and persuasion, should remain unchanged from a full-length proceeding. 

Justice Breyer pointed out another potential (and more practical) issue with forcing the Petitioner to prove non-infringement. He gives the following example:

Suppose the evidence is inconclusive, and an alleged infringer loses his declaratory judgment action because he failed to prove noninfringement [sic]. The alleged infringer, or others, might continue to engage in the same allegedly infringing behavior, leaving it to the patentee to bring an infringement action. If the burden shifts, the patentee might lose that action because, the evidence being inconclusive, he failed to prove infringement.
Justice Breyer therefore found that in addition to there being no legal reason to shift the burden away from the patentee, it is also in the best interest of the administration of justice to maintain consistency across long and short-form infringement proceedings. 

In oral argument back in November of 2013, Justice Kennedy asked counsel for the Petitioner, Mr. Seth P. Waxman, if his argument required that a claim of infringement be made by the licensor in the first place (as was the case here). The Court chose not to address this in its judgement. 

It would appear, however, that since Federal Courts do not have jurisdiction to hear hypothetical cases (See Muskrat v. United States, 219 U.S. 346,362 (1911)) the action would likely have been thrown out for want of jurisdiction. Article III of the US Constitution restricts the Federal Courts to hearing “cases and controversies”. The Petitioner would therefore likely have been precluded from seeking an advisory opinion had the Respondent not made allegations of infringement in the first place.

Tuesday, January 21, 2014

Ontario Superior Court of Justice Offers A Way Around Bad Faith Requirement in CDRP…Kind Of

On December 30, 2013, the Ontario Superior Court of Justice granted an Order forcing the transfer of a domain name back to the original owner. The Plaintiff Corporation, a Toronto area mold removal service, was created by Mr. Sullivan (the Defendant) and Mr. Dalrymple. Sullivan registered the domain name “” for the business. 

photo by mikeleeorg
Sullivan and Dalrymple’s business relationship soured. Despite the fact that the website was clearly the property of the Corporation, Sullivan was the named registrant of the domain name and asserted ownership over it. He then sold it to a third-party. 

The Plaintiff undertook CIRA domain name dispute resolution proceedings but was unable to obtain the transfer of the domain because it was unable to prove bad faith on the part of the new owner.

To be successful in a complaint under the CDRP, one must prove that:
  1. The Registrant’s dot-ca domain name is Confusingly Similar to a Mark in which the Complainant had Rights prior to the date of registration of the domain name and continues to have such Rights;
  2. The Registrant has no legitimate interest in the domain name; and 
  3. The Registrant has registered the domain name in bad faith.
 The CDRP further defines Bad Faith at Section 3.5 of the Policy. 

At Common Law, an action for the conversion of property does not require a plaintiff to prove bad faith on the part of the person holding the property. The Superior Court therefore granted the summary motion to have “” returned to the Plaintiff. 

Bad faith may sometimes be difficult to prove rendering the CDRP useless to a trademark holder in those instances. At first glance, this seems like a quick and cost effective alternative to a trademark infringement and/or passing off action. 

While this decision is instructive, I am hesitant to hail it as ground breaking. This case was not decided on the basis of ownership of a trademark; the domain name registration itself was found to be personal property owned by the Plaintiff Corporation. Conversion would offer no aid in the case where a cyber-squatter registers domain names that are either identical to or confusingly similar with a trademark. Once again, here we have an actual registration that changed hands in contravention of the Plaintiff’s property rights as established by Ontario law. 

Domain name disputes usually turn around the bad faith and opportunistic registration of one or more domain names by a person with no interest in using those domain names for a bona fide purpose. Instead, the person seeks to contact a business or other entity, usually the owner of a trademark identical or similar to the domain name, to whom the registration may be “of value” in an attempt to obtain a price significantly higher than the cost of registration. 

For example, Fender Guitars Inc. owns the domain name “”. Suppose that they do not own “” (in reality they do and it redirects to their main site) and John decides to register it. John has no intention of using the domain for anything. In fact, all he wants to do is contact Fender and offer them the domain name for a premium. 

In this example, Fender does not, nor did it ever have a registration for It therefore would not be able to prove any rights of ownership without proving its trademark rights. All of a sudden, our simple summary motion for the conversion of personal property has morphed into a full blown action for trademark infringement/passing off. 

Again, this does not mean that the decision was of no real value. It simply means that it is not as revelatory as one may expect. The tort of conversion is old law. All the Court did here was apply it to domain names. While this case certainly stands for the proposition that domain names are personal property and will be treated as such in matters of contract and tort, because of the facts of the case and the relationship of the parties, this by no means establishes an equal and equivalent alternative to CDRP proceedings or trademark infringement actions.

Saturday, January 11, 2014

Win By Pin: Pinterest's Latest Battle for the Word "Pin"

Last October, Pinterest, the popular social networking platform sued a travel planning service called Pintrips in California District Court for trademark infringement, false designation of origin, unfair competition and dilution of their “PIN” family of trademarks. 

For those unfamiliar with Pinterest, it is a website whereby users (“Pinners”) collect images, recipes and other visual content and “pin” it to their user page (“board”). Much like the Facebook “like” button or Google’s “+1”, Pinterest has a “Pin it” social plug-in that third party sites integrate into their web pages. This is the vehicle by which Pinners add to their boards; by pinning images found on other websites.  

Photo by Norebbo
By its own description, Pintrips offers a service where you can “…shop for flights on your favorite sites, pin the options you care about, and see them on a personalized dashboard.” It markets itself as a travel facilitation application rather than as a social networking platform.

Pinterest’s claims are based on the Lanham Act and the California Business and Professional Code. Among other things, Pinterest claims that it had acquired rights in the “PIN-formative” trademarks before the Defendant began using its marks, and that the Defendant’s marks are confusingly similar and are likely to deceive the public into thinking that they are affiliated with the Pinterest brand. Pinterest’s claim for dilution is based on its assertion that its marks are famous, and have been so since before the Defendant started using its marks. They argue that Pintrips knowingly branded itself so as to capitalize on Pinterest’s goodwill.

Pinterest asks for interlocutory and final injunctive relief, delivery up and destruction, disgorgement of profits and compensatory damages.

While Pinterest acknowledges that the scope of its marks far exceed the travel industry, the Complaint alleges that the Pinterest travel section is one of the most popular parts of the website with more than 600 million total pins.

On January 6, Pintrips fired back with a motion to dismiss the Complaint.  Pintrips based its motion on the following grounds:

  •     That Pinterest cannot assert ownership over the PIN prefix;
  •     Based on this lack of ownership over PIN, the State law claims must fail; and
  •      Even if the State law claims survive, the Court should decline jurisdiction in favour of the State Courts.

Setting the jurisdictional issues aside, Pintrips is arguing that “pin” is a generic term that describes a function. They argue that Pinterest has no trademark registrations for PIN and should not be able to obtain one given the market restricting effect this would have on a number of different web-based businesses.

This is a key element of Pintrips’ argument because Pinterest will doubtless argue on the motion that pin has acquired secondary meaning associating that prefix with its brand; and this regardless of what comes after that prefix. Oddly, Pinterest failed to allege that its family of PIN-formative trademarks are so strong that PIN has acquired secondary meaning. 

Pintrips has cited law to the effect that regardless of how strongly the public may associate a generic term with a given brand, trademark status cannot be granted in the generic term. This strong consumer association with a generic term is known as de facto secondary meaning and has been rejected by courts as sufficient grounds to claim ownership over a generic term like “PC” or “MP3”.

Pintrips provided a number of examples where companies use pin as a generic term in association with “software applications, online maps, and websites”. Among those applications mentioned were Microsoft Windows, Facebook and Google Maps.
It would appear that the law backs up Pintrips’ argument. At the hearing of the motion (Scheduled for February 13, 2014), it will be essential for Pintrips’ counsel to drive home the point that “pin” is a commonly used term to denote a specific type of action in the online environment, namely marking a specific thing or place on a webpage (Google Maps), or the act of posting content from a third-party website to a user page of some sort (Facebook and Pinterest).
It may be tricky to convince a judge, particularly one who is not in the habit of pinning things online, that pin is in fact a generic action in the online environment. It may be helpful for Pintrips to liken the action of pinning to the action of posting. Posting is a familiar action online and can relate to any number of things, some of which could also be described with the term pin.
If I were arguing the motion on Pintrips’ behalf, I would offer the following two analogies:

  •       Whether I say “he knocked the ball out of the park” or “he hit the ball out of the park”, without any other information, the mental image one forms in their mind is that of a batter making contact with the baseball hard enough to propel it out of the field.
  •       Whether I say “he jumped off the building” or “he leapt off the building”, without any other information, the mental image one forms in their mind is the same.

In the same way, posting a photo or pinning a photo amounts to the same thing. Both are generic terms denoting a single action.
Upon a search of the USPTO trademark database, it appears that Pinterest has applied for PIN (Serial no. 85698998) in association with a wide range of goods and services. The opposition period has expired but the trademark has not been registered. Pinterest also claims registrations in several other jurisdictions.
Pinterest’s claim is not based on a trademark registration, but on Common Law rights. Much of their argument turns on the fact that a great deal of its popularity comes from its third party plug-in buttons; and that the Pintrips button (that may be alongside the “Pin it”) button causes confusion and dilutes Pinterest’s brand. 
The fact that these buttons may appear side by side is a functional reality. Websites that use these third-party plug-ins tend to put them all in the same place on the page. From a visual inspection of these marks, it would appear difficult to confuse them. Apart from the word pin, the marks are completely different. The “Pin it” button has red text with a stylized font. The Pintrips button is in a plane blue font. The Pintrips mark also contains a visual depiction of a sewing pin. In the “Pin it” button, the word pin is a prefix. In the Pintrips button, the word pin stands alone and comes after the image of the sewing pin.
Pinterest argues that in addition to appearance, the confusing trademark sounds the same or confusingly similar. Depending on how one pronounces the word “interest” (in two syllables or three), this may be true. But here, Pinterest can only be comparing its PINTEREST mark with PINTRIPS; not their respective third-party plug-in buttons depicted above. This is not self-evident given the drafting of the Complaint.
While this is only a partial analysis, it may be for naught if the Judge agrees with Pintrips on their motion and dismisses the complaint before arguments for confusion are ever made. Suffice it to say that Pinterest will be fighting an up-hill battle on this motion, and if they succeed, perhaps in the ensuing jury trial.
This is a typical David vs. Goliath situation. The fame of the Pinterest trademarks is beyond question. However, as Pintrips argues, no degree of notoriety should give anyone a monopoly on a technical or generic term.

Post Script:
In a somewhat related turn of events, last November, the European Commission’s Office for Harmonization in the Internal Market, Trade Marks and Designs Division rejected Pinterest’s opposition to a registration for PINTEREST by a news aggregator website and corporation called Premium Interest Ltd. This means that if Pinterest wants to operate officially in Europe, it will have to either change its name or buy a license from the Registrant.