This week in IP: Counsel reveal VICO fears, IEEE supplement sidelined, M&S sues over copy-caterpillar

Counsel say they are concerned that pending national court actions and worries over legal provisions could discredit a hearing to address the legality of mandatory video-conferences at the EPO’s Boards of Appeal.

Speaking to Managing IP, in-house and private practice lawyers say the BoA must address these concerns if the matter is to be heard in a fair manner.

In the past few days, two patent attorney associations have filed briefs with the Enlarged Board of Appeal, which will hear the case in May, to outline their concerns.

One source also speculates that the concerns about VICO might in reality be driven by a desire for attorney firms based close to the EPO’s offices in Munich to retain their “oligopoly”.

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In perhaps the first sign that the Biden administration intends to roll back some of its predecessors' antitrust policies, the US Department of Justice transferred a supplementary letter to a 2015 business review letter of the Institute of Electrical and Electronics Engineers to the competition advocacy section of its website yesterday, April 15.

According to sources, this move essentially decouples the supplement – introduced by former DoJ antitrust chief Makan Delrahim in September 2020 – from the original 2015 letter, which condoned revisions to the IEEE Patent Policy that were thought by some to be excessively pro-implementer.

“In other words, the DoJ has now said that this was not a supplement to the letter but rather a competition advocacy piece,” says Jay Jurata, partner at Orrick in Washington DC. “This is the first indication of what the Biden administration might be doing on standard essential patents (SEP).

“It appears to be a walking back of Delrahim’s New Madison approach, but it’s not quite clear where this ends,” he adds.

The DoJ’s 2020 supplementary letter, which was intended to “supplement, update and append” the 2015 version, had set out that the original letter should not be construed as an endorsement of the standards-setting organisation’s policy.

It also said that the original letter was outdated because of developments in SEP licensing matters, such as the Court of Appeals for the Ninth Circuit’s ruling in FTC v Qualcomm last summer.

The supplement was thought to be an extension of Delrahim’s New Madison approach, which sets out that antitrust law should not be used to police commitments that patent owners unilaterally make to standards-setting organisations.

UK supermarket chain Marks & Spencer has filed a suit against German supermarket brand Aldi at the England and Wales High Court for copying the design of its iconic Colin the Caterpillar chocolate cake, it emerged yesterday, April 15.

In its complaint, M&S has demanded that Aldi remove the product, called Cuthbert the Caterpillar, from sale and agree not to sell any similar goods in the future.

The retailer owns three trademarks relating to Colin, a product launched 30 years ago. The cake in question is a sponge with milk chocolate and buttercream, topped with chocolate sweets and a smiling white chocolate face.

A spokesperson for M&S said: “Because we know the M&S brand is special to our customers and they expect only the very best from us, love and care goes into every M&S product on our shelves.

“So we want to protect Colin, Connie [another cake] and our reputation for freshness, quality, innovation and value.”

Commenting on the case, Emmy Hunt, trademark specialist and partner at European intellectual property law firm Potter Clarkson, said:

“Marks & Spencer’s claim is unlikely to be strong in respect of any assertions around consumer confusion between the two products, but it might succeed if it relies on the market reputation that its Colin the Caterpillar range has established over many years.

“While we don’t know the background to this claim, it is indicative of the fierce competition between UK supermarkets. Indeed, other supermarkets also offer caterpillar-character cakes, but it appears that Aldi may have sailed too close to the wind from Marks & Spencer’s perspective. 

“It remains to be seen which retailer will have their cake and eat it – it would come as no surprise to see this being settled behind closed doors, as so many recent actions against discount retailers have been.”

On Tuesday, April 13, the Court of Appeals for the Fourth Circuit ruled that the 'Vagisan' trademark is confusingly similar to 'Vagisil' and that the former should be disallowed under the Lanham Act.

Combe, a personal care company, has owned the 'Vagisil' mark since 1978 and sells vaginal health and hygiene products.

Wolff, a Germany-based firm, has used the mark 'Vagisan' to sell vaginal health and hygiene products internationally since 1998. It applied to register the mark in the US in 2012.

Combe opposed this registration on the basis that it was confusingly similar, but the Trademark Trial and Appeal Board dismissed this opposition and allowed Wolff to register the mark.

Combe later won the case at the District Court for the Eastern District of Virginia. Wolff appealed the ruling, but the Fourth Circuit sided with the lower court.

During its appeal, Wolff attempted to argue that the Eastern District of Virginia erred when it ruled that the strength of the mark factor (which is used to determine whether there’s likelihood of confusion) favoured Combe. But the appellate court said that the lower venue’s analysis was correct.

Wolff also argued that the district court should have only focused on the last three letters rather than the names as a whole when trying to determine whether 'Vagisan' and 'Vagisil' are confusingly similar, arguing that the first four letters were weak and descriptive.

But the appellate court said this argument lacked support in case law.

The Fourth Circuit said the district court was also correct in its finding that the actual confusion factor favoured Combe and that the sophistication of the consuming public was a neutral factor.

Finnegan represented Combe.

Intel and VLSI Technology made opening statements on Monday, April 12, in the second of three patent trials surrounding the alleged infringement of VLSI’s integrated computer chips by Intel.

VLSI claims that Intel used its patents to increase the performance of its computer chips, while Intel argues that its researchers developed the chip technology independently.

Judge Alan Albright of the District Court for the Western District of Texas denied Intel’s motion to move the case to Austin.

Intel claimed jury bias, citing reports “of another jury's unprecedented large verdict in a factually related case involving the same parties tried only six weeks earlier”.

In March, a jury in Waco, Texas, awarded VLSI $1.5 billion for the infringement of one of its patents, and $675 million for another.

The VLSI patents cover technology originally invented by electronics company SimgaTel, and are based on technology used in MP3 players.

Counsel for VLSI argued the case is about defending the IP rights of small companies against corporate giants like Intel. Intel counter-argued that VLSI makes no products of its own and sees this lawsuit as its only potential revenue.

After the trial in March, Intel's shares fell by 2.6% to $61.24 on the New York Stock Exchange.

The third trial is set to begin in June.

The EPO Boards of Appeal reported this week that 2020 had been a successful year in which it decreased its case backlog and pendency time for cases, despite the challenges posed by the COVID-19 pandemic.

According to the Annual Report 2020 of the Boards of Appeal, published on Monday, April 12, the number of pending cases was reduced by 954 over the course of the year and the backlog of pending cases fell to 8,280 as of the end of December 2020 – a 10.3% drop over 2019.

The BoA added that it has also reduced the pendency time of cases throughout the year. In 2020, 90% of cases were settled within 60 months (five years), compared to 65 months during 2019.

In 2020 (January 1), the BoA’s revised Rules of Procedures also came into effect.

BoA president Carl Josefsson said that despite the specific challenges faced due to the pandemic, the BoA did not lose sight of its objectives.

Also in the report, the BoA said it had attempted to mitigate the negative impact of the pandemic by allowing staff to work from home and by conducting oral proceedings with video-conferencing technology.

Staff adapted well to the changes in their working conditions and the resulting additional challenges, the report added.

The Crypto Open Patent Alliance filed a complaint in the England and Wales High Court late last week over a copyright dispute surrounding authorship of a bitcoin white paper.

The alliance – a bitcoin industry working group – filed the case on Friday, April 9, asking the court to rule that Australian national Craig Wright was not the author of the 2008 white paper, and that others should be free to publish it.  

Authored by Satoshi Nakamoto, the paper was the first document to outline the principles of the cryptocurrency. Wright, a computer scientist, has said he and Nakamoto are one and the same, although he has yet to prove these claims.

The complaint asks the court to confirm that Wright is neither the author nor the owner of the white paper and that COPA’s publication of it does not amount to copyright infringement.

COPA is requesting an injunction so that Wright cannot claim authorship or ownership of the document, which would provide anyone who posts the 2008 paper with legal cover.

In a tweet confirming the litigation, a COPA spokesperson said: “COPA has initiated a lawsuit asking the UK High Court to declare that Craig Wright does not have copyright ownership over the bitcoin white paper.

“We stand in support of the bitcoin developer community and the many others who've been threatened for hosting the white paper.”

Kirupa Pushparaj, deputy general counsel at Square – the company that launched COPA in September 2020 – said on LinkedIn that he was proud of the organisation for taking this stance.

On Friday, April 9, the District Court for the Eastern District of Arkansas ruled that Walmart had to pay Ecoark, owner of Zest Labs, $115 million for misappropriating trade secrets.

The case dates back to 2018 when Ecoark sued the US supermarket company for wrongfully using and disclosing Zest’s trade secrets when it filed two patents for technologies that were aimed at improving produce freshness.  

Ecoark had alleged that Walmart stole the information some time between 2014 and 2017, when the two companies worked together on a pilot project for Zest Labs. 

The jury awarded Ecoark and Zest $60 million in compensatory damages and $55 million in exemplary damages for the breach and misappropriation of trade secrets.

Ecoark CEO Randy May said: “We are happy that we had our day in court and that the jury found that Walmart misappropriated our trade secrets and breached the agreement between the parties. The damages awarded were strongly supported by the evidence.”

A spokesperson for Walmart told the Arkansas Times: “Walmart values its business relationships and respects the intellectual property rights of others. We have policies in place to prevent the inappropriate use of third-party assets. We believe the jury’s verdict is excessive, not supported by the facts and should be set aside.”

Walmart said it is planning its next steps and will file post-trial motions.

Ericsson snagged some high-profile supporters in its dispute with Samsung on Friday, April 9, when former USPTO director Andrei Iancu, North Carolina senator Thom Tillis and former Federal Circuit judge Paul Michel filed an amicus brief in support of the Swedish telecoms company.

In their submission, the three asked the Court of Appeals for the Federal Circuit to affirm a district court’s issuance of an anti-interference injunction.

In 2019, Ericsson filed a complaint against Samsung in the US District Court for the Eastern District of Texas, alleging that the Korean company refused to accept a licence on fair, reasonable and non-discriminatory (FRAND) terms.

Samsung sought an anti-suit injunction from the Wuhan Intermediate People’s Court in China to prevent Ericsson from litigating its FRAND and patent issues in the US and globally. Ericsson then asked the Eastern District of Texas to grant an anti-anti suit injunction, which Chief Judge Rodney Gilstrap did.

In their submission, Iancu, Tillis and Michel argued that the case had turned into an international dispute about a foreign court asserting unilateral control over global licence rates without parties’ consent. 

“In fact, without the consent of all parties and notice to all parties, the Wuhan court has unilaterally crowned itself the sole arbiter of global rate-setting for Ericsson’s SEPs, irrespective of where those patents were issued or where the infringement occurred.” 

They added that courts in India and Germany have rejected similar moves from the Wuhan court and that US courts have only adjudicated global FRAND licensing terms with full-party consent.