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April 11, 2013
  Power Integrations, Inc. v. Fairchild Semiconductor Intern., Inc.
Headline: Federal Circuit finds jury award improperly based on foreign sales as well as inadmissible expert testimony

Area of Law: Patent law

Issue(s) Presented: Whether expert testimony was adequately supported and whether Power Integrations can recover for patent infringement occurring outside the United States.

Brief Summary: The court rules in favor of Fairchild on both issues, upholding an 82% reduction in an award but remanding for an accounting and new trial on damages.

Significance: Interest in the effects of foreign sales on U.S. rights has increased since the Supreme Court in Kirtsaeng v. John Wiley & Sons, Inc., found such sales to exhaust U.S. copyrights. This opinion indicates that, unlike copyrights, patent rights are territorial.

Extended Summary: After two jury trials and a bench trial, the district court remitted 82% of a $33 million jury award but enhanced damages by doubling the remainder.

On appeal, Fairchild argued that the district court correctly determined that the jury's damages award was improperly based on worldwide sales and that in formulating its award the jury relied on inadmissible expert testimony. The Federal Circuit agrees with both propositions.

On the first issue, the court, quotes an 1856 Supreme Court opinion holding that use of a patented invention outside the United States is not an infringement of U.S. rights. Slip. Op. at 37. Thus, as to "whether Power Integrations is entitled to compensatory damages for injury caused by infringing activity that occurred outside the territory of the United States[, t]he answer is no." Slip. Op. at 38.

Yet plaintiff's expert "did not quantify an amount of damages based on any offer for sale by Fairchild in the United States." Slip. Op. at 39. Thus, the court holds, "the district court correctly decided that the jury's original damages award was contrary to law." Id.

With regard to the expert's testimony generally, the court finds that the district court abused its discretion in admitting it. Slip. Op. at 43. Despite that, the court apparently sees enough substantial evidence in the existing record to remand for a new trial to determine the proper amount of damages for Fairchild's direct infringement." Slip. Op. at 43.

Panel: Lourie, O'Malley, and Reyna, Circuit Judges

Date of Issued Opinion: March 26, 2013

Docket Number: 2011-1218, -1238

Decided: March 26, 2013

Case Alert Author: Thomas G. Field, Jr.

Counsel: Frank E. Scherkenbach, Fish & Richardson P.C., for plaintiff-cross appellant. Blair M. Jacobs, McDermott Will & Emery LLP, for defendants-appellants.

Author of Opinion: Reyna, Circuit Judge.

    Posted By: Thomas Field @ 04/11/2013 08:15 AM     Federal Circuit     Comments (0)  

January 7, 2013
  Stephen Slesinger, Inc. v. Disney Enterprises, Inc. - Federal Circuit
Headline: Winnie-the-Pooh at the Center of Ongoing Litigation

Area of Law: Trademarks and copyrights

Issue(s) Presented: Whether the Patent and Trademark Office properly dismissed challenges to Disney trademarks for Pooh and friends.

Brief Summary: The Federal Circuit agrees that the PTO was correct to reject arguments that had already been resolved by a federal district court in California.

Significance: This case resolves the latest, but perhaps not last, heated dispute concerning rights to Winnie-the-Pooh. The upshot is that, following the expiration of Pooh copyrights in 2023, Disney will need to share related income with no one.

Extended Summary:

In the 1920s, A.A. Milne wrote four books about Winnie-the-Pooh and other anthropomorphic creatures as playmates for a fictionalized version of his son, Christopher Robin. In the 1930s, Milne transferred some U.S. and Canadian rights in his works to Stephen Slesinger. Milne then set up a trust and Slesigner set up SSI, a corporation. In 1961, SSI agreed to convey its rights to Disney in return for royalties.

The 1976 Copyright Act subsequently gave authors and their heirs the right to terminate transfers such as ones made in 1930s. Taking advantage of that opportunity, in 1983 Christoper Robin Milne and SSI drafted a new contract; Disney and SSI did likewise.

In 1991 SSI sued Disney in California State court, claiming underpayment of royalties. The suit was bitterly fought and both parties were found to have engaged in misconduct. SSI's however, was found sufficiently egregious that its suit was dismissed in 2006. The dismissal was affirmed on appeal in 2007.

Based on a 1998 amendment to the copyright law, Milne's granddaughter attempted to terminate the 1983 agreement. A second, supporting suit, funded by Disney, was instituted in a federal district court in California. Her arguments were rejected there, however, as well as by the Ninth Circuit in 2005.

Apparently beginning in 2006, SSI filed a series of counterclaims in the same suit. Most alleged that Disney infringed its intellectual property rights. Partly because those claims were not filed until SSI had lost its state suit and partly because the counterclaims are seen as inconsistent with what SSI had argued in the state litigation, the district court's 2009 opinion finds them to lack merit.

Besides offering those counterclaims, in 2006 SSI also filed a series of motions before the PTO's Trademark Trial and Appeal Board (TTAB). Those motions opposed registration of some and sought cancellation of other Pooh-related Disney trademarks. The TTAB, however, ruled that the California federal district court's opinion had resolved key issues in Disney's favor. That opinion, affirmed by the Federal Circuit in the instant case, bars SSI from asserting its claims in the PTO.

Although Judge Reyna disagreed about whether SSI should be barred, Disney's trademark arsenal is intact and available for use against anyone inclined to challenge its lucrative Pooh franchise. Moreover, after A.A. Milne's last copyright expires in 2023, it will apparently have no obligation to pay royalties under the 1983 agreement.

Panel: Chief Judge Rader and Circuit Judges O'Malley and Reyna

Date of Opinion: Dec. 21, 2012

Docket Number: 2011-1593. The opinion is available at

Decided: Affirmed

Case Alert Author: Thomas G. Field, Jr.

Counsel: Roger L. Zissu et al. for appellant; Daniel M. Petrocelli et al. for appellee.

Author of Opinion: Chief Judge Rader (majority); Circuit Judge Reyna (dissent)

Case Alert Circuit Supervisor: Thomas G. Field, Jr.

Edited: 01/18/2013 at 10:50 AM by Media Alerts Moderator

    Posted By: Thomas Field @ 01/07/2013 02:17 PM     Federal Circuit     Comments (0)  

December 21, 2012
  In re Fox - Federal Circuit
Headline: Are attempts to register risqué trademarks worth the effort and cost?

Area of Law: Trademarks

Issue(s) Presented: Whether the PTO erred in refusing a mark containing a double entendré with a vulgar meaning

Brief Summary: The court upholds a refusal to register without first publishing a "vulgar" mark for opposition.

Significance: The case is the latest in a line of cases involving risqué marks, few having been published for opposition, much less registered.

Extended Summary:

Since 1979, Marsha Fox has sold chocolate suckers in the form of roosters "primarily, [to] fans of the University of South Carolina and Jacksonville State University, both of which employ gamecocks as their athletic mascots." In 2001, she filed, pro se, to register a mark comprising an image of a gamecock and the literally true description "Cock Sucker."

Her application was refused under § 2(a) of the Lanham Act that precludes registration of immoral or scandalous marks. The Trademark Trial and Appeal Board affirmed in 2011, saying, "consumer statements... corroborate her argument that some consumers find her mark to be inoffensive. Nevertheless, the lollipops are available to all consumers, including parents shopping with children. Moreover, even if some consumers find the product whimsical and innocuous, they may still find that the mark is vulgar."

The court also affirmed the refusal to publish for opposition (opening the door for others to protest) for basically the same reasons. The opinion says, "We recognize that there are 'whimsical' and humorous aspects to Fox's mark. But the fact that something is funny does not mean that it cannot be 'scandalous.'" Copies of the mark are easily found on the Internet, so readers can assess that for themselves.

As the court notes, Fox's ability to use a mark does not depend on registration. Use could run afoul of another law, but thirty-three years of apparently unimpeded use suggests that the risk is small. Also, despite its literal descriptiveness, her mark, taken as a whole, seems fairly strong (meaning that another would have difficulty justifying a close copy), and would have protection under § 43(a)(1)(A) of the Lanham Act in any market she is serving. Were she to market on the Internet, that might include all or most of the country. A national marketing campaign would surely cost less than the fruitless proceedings spanning the past eleven years.

Panel (if known): Dyk, Prost and O'Malley, Circuit Judges

Date of Issued Opinion: Dec. 19, 2012

Docket Number: 2012-1212

Decided: Affirmed

Case Alert Author: Thomas G. Field, Jr.

Counsel: Michael Bressman, Vanderbilt Legal Clinic, for appellant; Thomas Casagrande, Assoc. Solicitor USPTO for appellee.

Author of Opinion: Dyk, Circuit Judge

Case Alert Circuit Supervisor: Thomas G. Field, Jr.

Edited: 01/02/2013 at 05:09 PM by Media Alerts Moderator

    Posted By: Thomas Field @ 12/21/2012 09:12 AM     Federal Circuit     Comments (0)  

December 7, 2012
  Gaylord v. United States - Federal Circuit
Headline: $3 Million Royalty Suit May Have Driven USPS Postal

Area of Law: Government liability for copyright infringement

Issue(s) Presented: (1)What factors should be considered in compensating authors for unauthorized governmental use of their work; (2) may an award include prejudgment interest?

Brief Summary: In 2002, the U.S. Postal Service (USPS) issued a stamp featuring an image of "The Column," nineteen figures at the heart of the Korean War Veterans' Memorial. In 2006, claiming to be the author and sole owner of copyright in those figures, Frank Gaylord sought compensation. After trial in the Federal Court of Claims, the court ruled for Mr. Gaylord on ownership but found use of the image fair under the Copyright Act. The U.S. Court of Appeals for the Federal Circuit, however, reversed on the second issue and remanded for a determination or reasonable compensation.

Although use of the image generated over $30 million in revenue, the trial court awarded Mr. Gaylord only $5,000 and denied interest on that sum since the time of infringement. In this second opinion, the Federal Circuit reverses both rulings.

Date of Issued Opinion: 5/14/2012

Docket Number: 2011-5097

Decided: Reversed

Author of Opinion: Judge Moore

Edited: 12/12/2012 at 10:30 AM by Media Alerts Moderator

    Posted By: Brian Graupner @ 12/07/2012 12:20 PM     Federal Circuit     Comments (0)  

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