Patent Reform Efforts Target "False Marking" Lawsuits and Tax Inventions

Posted on February 14, 2011 by Brian Wm. Higgins

H.R. 243 ("Patent Lawsuit Reform Act of 2011")

          Representative Robert Latta (R-OH) (right) introduced the Patent Lawsuit Reform Act of 2011 in the House of Representatives on January 7, 2011.  The bill was referred to the House Judiciary Committee, Subcommittee on Intellectual Property, Competition and the Internet, on February 7, 2011.

          Latta's measure is apparently aimed at curtailing the increase in the number of "false marking" lawsuits, which saw a sharp uptick in 2010.  False marking is governed by 35 U.S.C. 292, which states that "Whoever marks upon, or affixes to, or uses in advertising in connection with any unpatented article the word "patent" or any word or number importing the same is patented, for the purpose of deceiving the public; or Whoever marks upon, or affixes to, or uses in advertising in connection with any article the words "patent applied for," "patent pending," or any word importing that an application for patent has been made, when no application for patent has been made, or if made, is not pending, for the purpose of deceiving the public - Shall be fined not more than $500 for every such offense."

          Latta's bill would make the $500 fine apply to all of a defendant's falsely marked articles, rather than each article as a separate offense.  His bill would change the language of 292 to state "(b) A person who has suffered a competitive injury as a result of a violation of this section [35 USC 292] may bring a civil action in the appropriate district court of the United States against the person violating this section for recovery of not more than $500 in damages to compensate for the injury."

 

S.139 ("Equal Access to Tax Planning Act")

     Senator Max Baucus (D-MT) (right) introduced S.139, the Equal Access to Tax Planning Act of 2011, on January 25, 2011.  The bill was referred to the Senate Judiciary Committee the same day.  The text of the bill is apparently directed at preventing the patenting of any methods for reducing, avoiding, or deferring tax liabilities:  

"In General- For purposes of evaluating an invention under section 102 or 103 of title 35, United States Code, any strategy for reducing, avoiding, or deferring tax liability, whether known or unknown at the time of the invention or application for patent, shall be deemed insufficient to differentiate a claimed invention from the prior art."

 

UPDATE: S.23 ("Patent Reform Act of 2011")

          The Senate's version of Patent Reform, S.23, was reported out of the Judiciary Committee with a few amendments, on February 3, 2011, and placed on the full Senate Legislative Calendar the same day. The date the bill will be debated by the entire Senate has apparently not been determined.

 

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Sen. Baucus to the PTO: Don't Register "The Last Best Place"

Posted on October 31, 2007 by Brian Wm. Higgins

Question: What do Montana's slogan “'The Last Best Place” and federal appropriations legislation have in common?  One was used to stop the other from becoming the trademark of a Nevada company.


    Sec. 206 of the Science, State, Justice, Commerce, and Related Agencies Appropriations Act of 2006 prohibits the use of federal funds to "register, issue, transfer, or enforce any trademark of the phrase THE LAST BEST PLACE." It was added to the 2006 and 2007 federal appropriations legislation by Montana Sen. Conrad Burns (Sen. Max Baucus continued the tradition for the 2008 bill) in response to attempts by Last Best Beef, LLC, a Nevada company, to trademark the phrase in connection with a variety of different products and services. The phrase, however, happens to be Montana’s slogan. When President Bush signed the appropriations acts into law, the PTO withdrew registration for several of the Last Best Beef’s trademark applications. Last Best Beef responded by filing a civil lawsuit against the PTO (see Senate approves ‘Last Best' measure). 

    The Eastern District of Virginia that found Sec. 206 invalid, and thus a legal nullity, on the grounds that it contradicted but did not constitute an implied repeal or suspension of the Lanham Act. In The Last Best Beef, LLC v. Dudas, No. 06 Civ. 2219 (4th Cir. Oct. 24, 2007), the Court of Appeals for the Fourth Circuit reversed, finding that Sec. 206 was not invalid. In reaching its decision, the Court refused to adopt a per se rule that Congress cannot amend or suspend prior legislation through appropriations riders, stating:

     “While the district court expressed the view that it was unwilling to see the Lanham Act punctuated by the types of exceptions that characterize such complex bodies of law as the Internal Revenue Code, the wisdom of tradeoffs between simplicity and complexity is for Congress to decide, not the federal courts. What may seem inadvisable on the part of Congress is not unconstitutional.”

Comments:

  • So what’s the lesson? Don’t fret with the PTO's trademark opposition rules. You can always seek intervention from your Senator, especially where the trademark involves a well-known slogan. Just goes to show the power of the legislative branch in wielding the appropriations axe.

  • So how does this case affect Maryland?  Because the Fourth Circuit includes Maryland, the Last Best Beef v. Dudas is a precedential opinion in this state, so don't tread on the Old Line State or mess with The Free State.

  • In dicta, the Circuit Court Judges stated that Last Best Beef "certainly has a point," revealing the Court's appreciation for the positions advanced by Last Best Beef in this case.

  • Other trademarks Congress has removed from the trademark application process:

    • SMOKEY BEAR (exclusive rights given to the Dept. of Interior)
    • THE GIRL SCOUTS OF AMERICA (exclusive rights to emblems, badges)
    • LITTLE LEAGUE (exclusive rights given to Little League Baseball)
    • UNITED STATES OLYMPIC COMMITTEE (exclusive rights given to the U.S. Olympic Committee)  
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