Maryland Intellectual Property Law Blog : Maryland Intellectual Property Lawyer & Attorney : Brian Wm. Higgins : Serving Baltimore, Columbia, Frederick

"Commerce Under Secretary to Address Bush Administration’s Views on Patent Reform Act of 2007

Washington, D.C. – Under Secretary of Commerce for Intellectual Property and Director of the United States Patent and Trademark Office (USPTO) Jon Dudas will highlight by teleconference on Tuesday, February 5, the Bush Administration’s views letter provided to members of the Senate regarding the Patent Reform Act of 2007 (S. 1145).

WHO Under Secretary of Commerce for Intellectual Property Jon Dudas

WHAT Media availability to discuss Administration’s views on S. 1145

WHEN Tuesday, February 5, 2008 10:30 a.m. ET (call in by 10:25 a.m.)

Reporters should call 800-779-8694 and enter the code #35841 to participate in the call.

Background
The Administration strongly opposes S. 1145 in its current form, but strongly supports passage of balanced patent modernization legislation. Any changes must be carefully considered and balanced to encourage all innovators and business models. The Administration opposes S. 1145 because it does not strike the right balance for all innovators. Unless the provisions limiting inventors’ rights to obtain damages are significantly revised, the Administration believes the resulting harm to the U.S. intellectual property (IP) system would outweigh the bill’s many useful reforms.

The Administration continues to strongly support the passage of patent modernization legislation that improves patent quality and reduces litigation costs. In fact, the Administration agrees with many of the bill’s provisions— and believes that those provisions pertaining to applicant quality submissions are the only ones that serve to maximize quality in the U.S. IP system. The Administration will continue to work with Congress to enact legislation that will promote innovation throughout all sectors of the economy.

To access the letter in its entirety, go [here]. "

     On October 31, 2007, in a packed courtroom, the Eastern District of Virginia considered (1) the likelihood of success on the merits by GSK, (2) the possibility of irreparable harm to GSK if the injunction is not granted, (3) the balance of hardships between the parties, and (4) the public's interest.

     Under factor (1), the court found that each side had a likelihood of success at trial on the issues noted below. However, under factor (2), the court granted the preliminary injunction because it is likely that GSK would suffer irreparable harm if the preliminary injunction is not granted, namely of potentially losing valuable patent protection and incurring significant costs to comply with the Final Rules. And, under factor (3), the court determined that, though the hardship to the PTO for maintaining the status quo by deferring the effective date of the Final Rules is not nonexistent, the uncertainty and loss of investment suffered immediately by GSK tilts the balance of hardships in their favor. Finally, under factor (4), the court found that the public interest is most served by continuing the status quo and granting the preliminary injunction.

     Thus, while there are some issues on which the PTO may ultimately prevail as this litigation proceeds to the next stage, the court found, as a preliminary matter, that there is a likelihood that the PTO has exceeded its authority at least on several of the Final Rules, so it granted GSK’s motion, thereby preliminarily enjoining the PTO from implementing the new rules (see PTO's statement about the litigation here).

     In a poll conducted after the injunction issued, 92.8% of those who responded said that Judge Cacheris made the appropriate legal decision.  See PLI's Patent Blog for in-depth coverage of the legal challenges to the PTO's new rules.

     Since GSK’s challenge is a legal one, the next stage in this litigation will be for the parties to submit summary judgment motions. 

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)