With brands becoming bigger, patent litigation increases

There is a very real issue of patent and intellectual property that is taking place in every industry. Between the threat of patent trolls and counterfeit goods made in other countries and our surprising lack of adequate precedent, intellectual property is a hot bed of controversy in this day and age. Just look at Star Wars and Spotify.

Also on the blog this week:

Star Wars IP wars

There was no way that Star Wars was going to break every box
office record going without a story on the IP aspects of the
cultural phenomenon coming out. Foley Hoag’s
Trademark & Copyright Law blog this week obliged with
a good post on the IP litigation
concerning the franchise
over the years.

The first IP spat came in 1977 when Ideal Toy company
– which had turned down the chance to make the
officially licensed products because it thought Stars Wars “was
a rather ordinary property” – came out with a line of
Star Team-branded action figures. These included a Knight of
Darkness sporting a black helmet and two inseparable android
friends. The official licensee, Kenner Products, was not best
pleased and sought a preliminary junction alleging copyright
and trade mark infringement. The Southern District of New York
was not convinced.

Other IP disputes covered in the blog post are a dispute
with the makers of Battlestar Galactica, a lawsuit against
Clarks shoes, George Lucas trying to stop people from referring
to Ronald Reagan’s Strategic Defense Initiative as
“Star Wars”, and unsuccessful attempts to block a porn parody
“Starballz” (which Foley Hoag partner David Kluft describes as
“offensive, unintelligible and only slightly more entertaining
than The Phantom Menace”).

A better way to look at litigation figures?

Some analyses of US patent litigation figures in 2015 have
been released recently (us included – see my blog post

), which revealed that last year had the second-highest
number of patent lawsuits filed ever.

Erich Spangenberg
took to his blog this week
to say that the more relevant
number is not cases filed but “the rate of patent litigation”.
Spangenberg points out that the AIA had a big effect on cases
filed because it changed the rules by limiting how many
defendants could be put together in one case, which explains
why there was a large increase in cases filed in 2012.

He said another problem with saying 2015 was nearly an
all-time high for litigation is that it doesn’t
take into account the fact there are now more patents. “If
there are more patents, ‘it must follow, as the night the
day,’ that there will be more patent litigation.
Since patents are a right to exclude they must be enforced to
have any value, and that will mean more litigation,” he

More accurate, said Spangenberg, is the number of defendants
added divided by the number of active utility patents
– which gives the rate of patent litigation. Last year
was the second lowest number by this measure since 2010.

“Something interesting did happen in 2015 though –
NPE litigation is way up,” said Spangenberg. “Total defendants
added in NPE cases, 5,349, IS at an all-time high. Operating
company litigation actually showed a slight decline from 2014.”
He suggested one reason may be that IPRs and Alice may have
ironically contributed to this by reducing operating
companies’ willingness to negotiate a licence.

USPTO sued for alleged
Constitutional rights violation

The proprietor of The Trademark Company is suing the USPTO
for allegedly violating his Constitutional rights when
investigating his practices in the filing and prosecuting of
trade mark applications,
reports The TTABlog

Matthew Swyers believes the USPTO’s requests
for information were “designed to harass, overburden, invade,
injure and damage the plaintiff and his business”. He is
seeking injunctive relief and damages. 

The Trademark Blog says The Trademark Company is reportedly
the second largest filer of trade mark applications in the US,
and uploaded Swyers’ complaint

PIPCOs suffer tough 2015

The public IP licensing company index followed by the IP
CloseUp blog was down 24.4% in 2015, compared with the 0.7%
decline of the S&P 500.

Bruce Berman
said in a blog post
that the poor performance was a result
of the weakening of patents and patent values, and the increase
in uncertainty resulting from the AIA and cases such as

Berman noted the worst performers were Marathon, Acacia and
ParkerVision, down 81%, 74.7% and 74.7% respectively. The
index’s only gainer in 2015 was Rambus, which was
up 4.5%.

spotifySpotify sued for second time in two

Spotify is facing its second class action suit alleging
systemic and wilful copyright infringement,
reports Billboard
. The suit was filed by law firm Gradstein
& Marzano and is led by recording artist Melissa Ferrick.
It seeks $200 million in damages.

The suit says that Spotify outsources its licensing and
accounting obligations to the Harry Fox Agency rather than
pursuing direct licenses or using the compulsory mechanical
licence mechanism. The suit says the agency “was ill-equipped
to obtain licenses for all of the songs embodied in the
phonorecords distributed by Spotify”.

The latest lawsuit follows
one filed on December 28
seeking $150 million in damages.
That lawsuit was filed by rock band Camper Van Beethoven and
David Lowery, the frontman of band Cracker. It alleges Spotify
knowingly, willingly and unlawfully reproduces and distributes
copyrighted songs without getting mechanical licences.

PTAB icon 250PTAB deems two decisions

The Patent Trial and Appeal Board this week designated two
of its decisions as precedential,
reports the Patents Post-Grant blog

The two decisions were the LG Electronics v Mondis Tech
inter partes review decision released September 17 2015 and the
Westlake Services v Credit Acceptance covered business method
review decision released May 14 2015.

The LG decision pertains to interpretation of “served with a
complaint” for purposes of triggering the one-year time bar set
forth in 35 USC § 315(b). The Westlake Services order
interprets the estoppel provision of 35 USC §

“The first decision, LG is more noteworthy given it
addresses the 12-month window, a topic that can get quite
complicated in the case of multiple complaint filings,”
explained Oblon’s Scott McKeown in the blog

David Bowie and IP

David Bowie’s death this week has prompted an
outpouring of grief. It has also caused intellectual property
followers to note Bowie’s keen interest in IP

Bowie was very forward thinking about IP and in particular
the impact of the internet. For example, in
an interview with the New York Times in 2002
he said: “The
absolute transformation of everything that we ever thought
about music will take place within 10 years, and nothing is
going to be able to stop it. I see absolutely no point in
pretending that it’s not going to happen. I’m fully confident
that copyright, for instance, will no longer exist in 10 years,
and authorship and intellectual property is in for such a

He wasn’t quite right with that specific
prediction, but he was correct in general. Bowie added: “Music
itself is going to become like running water or electricity. So
it’s like, just take advantage of these last few years because
none of this is ever going to happen again. You’d better be
prepared for doing a lot of touring because that’s really the
only unique situation that’s going to be left. It’s terribly
exciting. But on the other hand it doesn’t matter if you think
it’s exciting or not; it’s what’s going to happen.”

Bowie has previously attracted much interest when he sold
“Bowie Bonds”. The revolutionary deal in February 1997 allowed
the rock star to raise $55 million on the back of future
revenues from his back catalogue, a deal we covered

Some IP questions were even raised after his death. Techdirt

analysed whether radio stations are able to play
Bowie’s music all day
in tribute. The answer
was, because of copyright law, probably not.

In our news and analysis:

Source: http://www.managingip.com/Blog/3521539/Star-Wars-Erich-Spangenberg-The-Trademark-Company-IP-licensing-Spotify-PTAB-David-Bowiethe-week-in-IP.html