July 2006

Patents, Infringements and Defenses

In order to encourage the advancement of science and technology, the federal government gives an incentive to inventors to disclose new ideas that have been embodied in inventions by granting a patent, a temporary right to exclude others from making, using, selling, offering to sell, or importing the patented invention without the inventor’s permission. Activity that encroaches upon the right given by a patent is said to infringe the patent, for which an inventor may bring a lawsuit in order to obtain a remedy.

One common remedy for patent infringement is an injunction, a court order that the infringing activity stop. The other type of remedy available for patent infringement is monetary compensation for economic losses experienced by the inventor because of the infringement of the patent. The patent statute specifically provides that monetary damages should be no less than a reasonable royalty for the use of the patented invention. In addition, if the infringing activity is found to be willful, three times the actual economic losses experienced by the inventor can be awarded.

Most defenses to patent infringement address the question of whether there has in fact been infringement. However, even when liability for patent infringement has been established, a patent infringement defense is available to reduce or eliminate the monetary compensation that a patent owner can be awarded. The patent statute specifically provides that if a patent owner fails to mark the patented invention with the word “patent” or the abbreviation “pat.” along with the patent number, monetary compensation may not be recovered by the patent owner unless it can be established that the alleged infringer was notified of the alleged infringement and continued the allegedly infringing activity. If the patented product is not marked with the patent information, the notification requirement exists even if the alleged infringer knew of the existence of the patent.

A patent owner is not required to mark the patented product, and there are other methods by which one can be notified of allegedly infringing activity. A patent owner may send an alleged infringer a “cease and desist” notice. In addition, the filing of a patent lawsuit constitutes notice. Damages can only be recovered for infringing activity that continues beyond the date that notice of infringement is given. If the alleged infringer ceases the infringing activity immediately upon notification by a cease and desist letter or service of a lawsuit where there was no marking of the patented product, there would be no liability for damages despite the fact that there had been infringement. In contrast, the marking of the product constitutes notification as of possession of the product, and an infringer would be liable for monetary compensation for any infringing activity involving the product from the time of its possession by the infringer.

Patent Applications disclosing Multiple Inventions

Multiple Inventions in a Single Patent Application

If an application contains multiple inventions within the application as determined by looking at the claims which are to more than one independent and distinct invention, the United States Patent and Trademark Office (USPTO) may impose a restriction requirement. The applicant must then elect one of the inventions for prosecution in the original application but may file divisional applications claiming the non-elected inventions.

The Independent and Distinct Standard

The Commissioner of Patents and Trademarks may require restriction if two or more independent and distinct inventions are claimed in one application. Current USPTO policy precludes restriction, even in the case of multiple species, unless the two groups of claims are patentable over each other, which means that neither is obvious in the light of the other.


“Independent” is defined by the USPTO as meaning not dependent or that there is no disclosed relationship between the two or more subjects disclosed.

”Distinct” is defined by the USPTO as meaning related or dependent, but capable of separate manufacture, use, or sale as claimed and patentable over each other.

Restriction is appropriate where two joined inventions are either independent or distinct.

Distinct Inventions

The USPTO may require restriction where two or more inventions are related or dependent but nevertheless ”distinct.” Inventions are distinct if they are both capable of separate manufacture, use, or sale as claimed and patentable over each other. Assuming two joined inventions are distinct in this sense, then restriction will be required if, but only if, one or more of the following ”reasons” are present:

  • separate classification
  • separate status in the art
  • a different field of search

Procedure for Division and Election

An examiner enters a restriction requirement when he or she determines that the application includes claims to independent and distinct inventions. The applicant must then indicate a provisional election and may traverse the requirement by requesting reconsideration. In the next action, the examiner may make the requirement final and will take action on the elected claims and any linking or generic claims.

Election of Restricted Invention

A restriction requirement calls upon the applicant to elect that invention to which his or her claims are to be restricted. Election is thus the designation of the particular one of two or more disclosed inventions that will be prosecuted in the application.

Traverse and Reconsideration

If the applicant wishes to contest the restriction requirement, he or she must traverse the requirement and request reconsideration as well as stating a provisional election. The applicant must give reasons why the requirement is in error. After traverse, the examiner reconsiders the requirement and may repeat and make it final. In making the requirement final, the examiner also acts on the merits of the elected invention.

Petition and Review

If the examiner makes a traversed requirement final, the applicant may petition the Commissioner to review the requirement. The applicant may file the petition after the restriction requirement is made final and must file it not later than an appeal on the merits of final rejection. A restriction requirement is subject to judicial review through mandamus and the Administrative Procedure Act.

Withdrawal of Claims for Non-elected Inventions or Species

After a restriction requirement becomes final, the examiner will withdraw from further consideration all claims for non-elected inventions or species. If claims to elected inventions are allowed, the claims to non-elected inventions must be cancelled. The applicant may traverse the examiner’s holding that a given claim is not for elected subject matter. Such a holding is an appealable rejection. The applicant may file a divisional application claiming the non-elected inventions or species.

Protecting Valuable Secrets

A trade secret is any sort of business or technological information not generally known that provides a company or other business entity with a competitive advantage or from which the company derives some economic benefit. Trade secrets are not registered, unlike copyrights and trademarks, nor is there a process for protecting trade secrets that is similar to the patent process. Instead, trade secrets are protected under state law. Although trade secret law was originally based in common law, several states have enacted trade secret statutes.

Because neither federal nor state law provides for registration of trade secrets or issuance of trade secret protection, the only way to protect a trade secret is by taking reasonable means under the circumstances to keep the trade secret unknown to others. Although it is obvious that a company desiring to maintain the protection of a trade secret must avoid its public disclosure, that in itself is not generally sufficient; rather, some positive protective action must be taken to keep the trade secret from becoming generally known. In general, the extent to which such measures are taken will be considered in determining whether it is legally protectable.

There are several factors that are considered in determining whether a particular piece of information is protectable under trade secret law. As its name suggests, to be a trade secret, information cannot be widely known; however, a certain number of people within a company can know the trade secret without its losing eligibility for protection as long as the information is not known outside of the company. Another consideration is the value of the information to the owner, including how much time and money was expended to acquire the information. A related consideration is the cost to another company that would be required to acquire the same information.

Several different measures can be taken to increase the chance that a court will find a trade secret protectable. A business seeking to protect a trade secret might confine the knowledge of the secret to a small department in which the secret is applied or is otherwise used. The employees who need to know the secret might be compelled to sign non-disclosure agreements as a condition of their continued employment. Such agreements are special contracts between the employee and the business and are usually enforceable in court. Another effective measure would be to restrict access to the building or area of a building in which a secret is kept to personnel who are authorized to know the secret. A company that must reveal a trade secret for legitimate business purposes, for example, to another entity with which it does business, might require the other company to sign a non-disclosure agreement as a condition of doing business with the company.

If a court finds that a company has taken sufficient steps to maintain its trade secret, but the trade secret is obtained by another person or entity by theft or some other improper means, including disclosure in violation of a non-disclosure agreement, the trade secret owner will be able to obtain a court order to enjoin the use of the trade secret as well as further disclosure of the trade secret. The trade secret owner may also be able to recovery monetary damages from the person or entity that misappropriates the trade secret if the trade secret owner experiences economic loss from the misappropriation.

Trade secret law protects valid trade secrets from being appropriated through invalid means. It does not prevent a company from obtaining a trade secret that another company already owns through research or investigation. It is not illegal under trade secret law to take a validly obtained product of the trade secret owner and disassemble or otherwise analyze the product to determine how it works and how it is made, a process known as reverse engineering. If a trade secret might be easily obtained by others through such valid means, the trade secret owner might wish to seek patent protection or other type of protection available for intellectual property. Although the patenting process, if successful, will result in the public disclosure of the trade secret and the destruction of trade secret protection, a patent application is subject to trade secret protection until such time as a patent issues. If the trade secret is not eligible for a patent, it will therefore remain a trade secret as long as measures for continuing its protection are maintained.

Protecting and Registering Service Marks

Service marks are used to identify services which are performed by one person for the benefit of a person or persons other than himself or herself, either for pay or otherwise. A service mark is the same as a trademark except that it identifies and distinguishes the source of a service rather than a product. The terms “trademark” and “mark” are commonly used to refer to both trademarks and service marks.

Definition of a Service Mark

A service mark is any word, name, symbol, device or any combination, used, or intended to be used, in commerce to identify and distinguish the services of one provider from services provided by others and to indicate the source of the services.

Rights in a Service Mark

There are two types of rights in a mark. There is the right to register the mark and there is the right to use the mark. Service mark rights arise from either the actual use of the mark or the filing of a proper application to register a mark in the U.S. Patent and Trademark Office stating that the applicant has a bona fide intention to use the mark in commerce. Federal registration is not required to establish rights in a mark or to begin using a mark.

Use of Service Marks

In general, the first party who either uses a mark in commerce or files an application in the USPTO has the ultimate right to register that mark. The USPTO’s authority is limited to determining the right to register. The right to use a mark can be more complicated to determine, especially when two parties have begun using the same or similar marks without knowledge of one another and neither has a federal registration. Only a court can render a decision about the right to use the mark.

Examples of Service Marks

  • Better Business Bureau, BBB, BBB AUTO LINE, BBB OnLine, and the BBB torch, BBB OnLine and BBB CARE logos are federally registered service marks owned by the Council of Better Business Bureaus, Inc. These marks may be used, with certain restrictions, by Better Business Bureaus and eligible companies participating in Better Business Bureau programs under a license agreement.
  • Amazon.com (retail Web site)
  • Jack in the Box (fast food service)
  • Kinko’s (photocopying service)
  • American Civil Liberties Union (legal service)
  • Blockbuster (video rental service)
  • CBS’s stylized eye in a circle (television network service)
  • the FedEx logo (delivery services)

Registration of Service Marks

Marks may be registered with the USPTO and similar agencies throughout the world. In the United States, marks can also be registered within each state and territory, although such registrations are of limited value to businesses engaged in interstate commerce. A state registration normally cannot defeat a federal registration because federal trademark rights supersede state rights. Unregistered marks are protected at “common law” in the United States so that marks need not be registered to be recognized and enforced. However, marks registered with the USPTO have advantages over unregistered marks.

The initial term and renewal term for a trademark or service mark is 10 years. A renewal application cannot be filed until at least six months prior to the expiration of the mark’s registration. However, between the fifth and sixth year after the date of initial registration, the registrant must file an affidavit which must include a specific list of the goods or services set forth in the registration and indicating that the registrant is still using the mark on or in connection with the goods or services listed, a specimen showing how the mark is currently in use with the goods or services identified, and the required filing fee.

Dilution of your Trade or Brand Identity

A trademark is infringed when the mark or a similar mark is used in a way that is likely to confuse the public into believing that the trademark owner is the source or sponsor of products that it does not actually make or endorse. Trademark anti-dilution laws are intended to enable trademark owners to prevent the gradual weakening or whittling away of the strength of their marks, through blurring or tarnishment, even if the public is not likely to be confused. Until 1996, trademark dilution laws consisted of a patchwork of non-uniform state statutes and common law. In early 1996, Congress enacted the Federal Trademark Dilution Act (FTDA) to provide nationwide injunctive relief for diluting uses of nationally famous trademarks.

Federal Trademark Dilution Act

The Federal Trademark Dilution Act (FTDA) became law in 1995. The new statute amends the Lanham Act to provide a federal remedy for dilution. State law is not preempted. In fact, the laws of many states go farther in granting more protection than that provided in the federal statute. Although many states had enacted laws that prohibited trademark dilution, the FTDA was intended to provide uniform and nationwide protection for famous marks. “Dilution” is defined in the FTDA as “the lessening of the capacity of a famous mark to identify and distinguish goods or services, regardless of the presence or absence of (1) competition between the owner of the famous mark and other parties, or (2) likelihood of confusion, mistake, or deception.” Prior to the enactment of the FTDA, courts found that dilution could occur as a result of either “blurring” or “tarnishment.” Both of these concepts are encompassed within the FTDA. The FTDA applies only to famous marks.

Famous Marks

In determining whether a mark is famous a court may consider the following non-exclusive factors:

  • the degree of inherent or acquired distinctiveness of the mark;
  • the duration and extent of use of the mark in connection with the goods or services with which the mark is used;
  • the duration and extent of advertising and publicity of the mark;
  • the geographical extent of the trading area in which the mark is used;
  • the channels of trade for the goods or services with which the mark is used;
  • the degree of recognition of the mark in the trading areas and channels of trade used by the marks’ owner and the person against whom the injunction is sought;
  • the nature and extent of use of the same or similar marks by third parties; and
  • whether the mark was registered under the Act of March 3, 1881, or the Act of February 20, 1905, or on the principal register.


“Blurring” typically refers to the “whittling away” of distinctiveness caused by the unauthorized use of a mark on dissimilar products. Dilution by blurring can occur when a trademark is used by someone other than the trademark owner on products that are very different from those normally produced by the trademark owner


“Tarnishment” involves the unauthorized use of a mark which links it to products that are of poor quality or which are portrayed in an unwholesome or unsavory context that is likely to reflect adversely upon the owner’s product. .

Remedy – Injunctive Relief

Generally, only injunctive relief is available under the FTDA. However, if the defendant willfully intended to trade on the owner’s reputation or to cause dilution of the famous mark, the owner of that mark may also be entitled to other remedies, including defendant’s profits, damages, attorneys’ fees and destruction of the infringing goods. The availability of monetary relief is a striking departure from state dilution laws, which have typically provided only for injunctive relief. Additionally, the FTDA provides that the ownership of a valid federal registration is a complete bar to the assertion of a dilution claim under state law.

The FTDA allows injunctive relief to owners of famous marks against another’s use of the mark if:

  1. the use of the mark is commercial,
  2. the use began after the senior mark became famous, and
  3. the use dilutes the distinctive quality of the mark.

Non-actionable Use of a Famous Mark

The following are not actionable under the FTDA:

  • fair use of a famous mark by another person in comparative commercial advertising or promotion to identify the competing goods or services of the owner of the famous mark
  • noncommercial use of a mark
  • all forms of news reporting and news commentary

State Dilution Laws

More than half of the states afford protection from trademark dilution through statutory or case law. The FTDA expressly states that the federal statute does not preempt state dilution laws. Where the federal statute provides protection for dilution of nationally famous marks, state statutes seek to protect interests of a more local nature. Courts have acknowledged that trademarks need not be nationally famous for a mark to be strong in a particular geographic region or industry segments. In addition, whereas the FTDA requires actual dilution, state laws sometimes require only a showing of likelihood of dilution to grant injunctive relief.

Dilution in the United States Patent and Trademark Office

Although the FTDA became effective in 1996, it was not until 1999 that dilution became a basis on which an application or registration of a mark could be challenged in a U.S. Patent and Trademark Office opposition or cancellation proceeding. It still is not a basis on which an examiner can reject an application during an ex parte examination.