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News/Events - Newsletter

February 2007

A profile of Ostrolenk appears in the winter 2006 issue of the Patent Lawyer, a publication of the Association of Patent Law Firms.  The article is entitled "A Well-Oiled Boutique, Ostrolenk Faber Proves Small is Better for Patent Prosecution" and describes the quality and value provided by our firm.  A copy of the article is enclosed with this newsletter.  The article may also be viewed at our web site at www.ostrolenk.com.

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We are pleased to announce that Kourosh Salehi has been elected to the partnership.  Mr. Salehi is a graduate of Virginia Tech and Western New England School of Law, where he graduated magna cum laude.  Following graduation, he served as a judicial clerk for the Honorable Justices David M. Borden and Flemming L. Norcott of the Connecticut Supreme Court.  Mr. Salehi, who has been with Ostrolenk since 2000, is currently focusing his practice on domestic and international patent procurement, and client counseling related to semiconductor devices, materials, optics, manufacturing machinery, automotive and audio technologies.

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Partners Robert C. Faber and Douglas A. Miro won a victory on behalf of the plaintiff in the case of Bogopa Service Corp. v. Food Bazaar, Inc., Civil Action No. 3:06-cv-00218, in the United States District Court for the Western District of North Carolina.   In that trademark action, the plaintiff sued for infringement of a registered trademark.  The defendant moved to dismiss the case based on the Dawn Donuts line of trademark cases, which hold that there is no trademark confusion where the plaintiff and defendant do not compete in the same geographic market.  The attorneys at Ostrolenk found a hole in the Dawn Donuts cases, permitting the action to continue where the defendant has acted in bad faith.

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Stephen J. Quigley reviewed and analyzed key 2006 judicial opinions pertaining to copyright issues on the Internet.  His article, "A Review of 2006 Case Law: Who Are the Infringers on the Internet?", was published in the December, 2006 Andrews Computer & Internet Litigation Reporter.  Mr. Quigley focused on two areas of emerging law: search engine liability for links to web sites that post unauthorized copyrighted works and the hurdles copyright owners face in identifying and stopping on-line infringers.  For a copy of the article, please send an e-mail to Mr. Quigley at squigley@ostrolenk.com or visit our firm web site at www.ostrolenk.com.

Legal Developments

Patent Law

In a long anticipated decision, the U.S. Supreme Court issued its opinion in MedImmune v. Genentech, 2007 U.S. Lexis 1003 (Sup. Ct. 2007).  The Supreme Court held that a licensee, who continues to pay royalties under a patent license agreement, has standing to bring a civil action seeking a declaratory judgment that the licensed patent is invalid, unenforceable, and/or not infringed.

In 1997, MedImmune received a license from Genentech for patents covering chimeric antibodies expressed in recombinant host cells and agreed to pay royalties for sales of licensed products.  In 2002, Genentech asserted the license included MedImmune's Synagis, a drug that prevents respiratory tract disease in children.  MedImmune did not believe that the Genentech patent covered Synagis and believed that the patent was invalid and unenforceable. MedImmune was concerned that it would be found to have willfully infringed the Genentech patent if it canceled the license agreement and stopped paying royalties, because a finding of willful infringement could lead to an award against MedImmune of treble damages and Genentech's attorney's fees.  To avoid this possibility, MedImmune paid the license royalties under protest and filed a civil action seeking a declaratory judgment that the patent is invalid and unenforceable and was not infringed by Synagis. 

The district court dismissed the civil action because of the Federal Circuit holding in Gen-Probe Inc. v. Vysis, Inc., 359 F.3d 1376 (2004), that when a licensee continues to pay royalties for a patent license, the licensee had no apprehension that the licensee would be sued for infringement of the licensed patent. Therefore, MedImmune faced no imminent threat of harm to be addressed by a declaratory judgment.  The Federal Circuit affirmed the district court dismissal.

The Supreme Court reversed the Federal Circuit and overruled the test in Gen-Probe. The Court instead held that a declaratory judgment action is permissible even while a patent licensee continues to pay royalties. The requirement for an actual case or controversy for subject matter jurisdiction over a claim in a federal court is met when payments on the claim are made under coercive or involuntary circumstances that preserve the right to challenge the legality of the claim.  Thus, when a licensee disagrees with a claim asserted by a licensor demanding royalties, the payments of the license royalties do not defeat the licensee's right to challenge the validity, enforceability and/or infringement of the licensed patent.

Trademark Law

In First Niagara Insurance Brokers, Inc. v. First Niagara Financial Group, Inc., No. 06-1202 (Fed. Cir. January 9, 2007), the Court of Appeals for the Federal Circuit reversed and remanded a closely watched trademark opposition which dealt with issues of transnational trade between Canada and the U.S. and the trademark use standard necessary to establish priority in an opposition based upon likelihood of confusion.

The Federal Circuit stated that the facts relevant to the appeal before it were undisputed.  Opposer First Niagara Insurance Brokers (FN-Canada) is located in Niagara Falls in Ontario, Canada and has no physical presence in the United States.  FN-Canada does have some business dealings in the U.S., including selling insurance policies to U.S.-based underwriting companies, providing insurance to Canadians to facilitate their travel to the U.S., and providing insurance to the Niagara Falls Bridge Commission, a joint U.S.-Canada venture.  FN-Canada does not own any registered U.S. trademarks, but uses the marks "First Niagara" and "First Niagara Insurance Brokers" in advertising that spills over to the U.S.

Applicant First Niagara Financial Group (FN-US) also offers insurance broker services similar to FN-Canada.  FN-US is located in upstate New York, and its physical presence is confined to the United States.  FN-US also has both U.S. and Canadian customers and uses marks similar to those used by FN-Canada, including "First Niagara" and "First Niagara Financial Group."

FN-Canada opposed the registration of FN-US's trademark applications, arguing that they were likely to cause confusion with FN-Canada's prior marks.  In response, FN-US asserted that FN-Canada could not establish the priority necessary to win on a likelihood of confusion claim because FN-Canada's marks had not been used "in commerce" within the meaning of the U.S. Trademark Act.  At trial during the administrative proceedings below, the Trademark Trial and Appeal Board found that FN-Canada's activities in the U.S. were only incidental to its business in Canada and did not meet the use "in commerce" requirement necessary to oppose FN-US's applications.

According to the Federal Circuit, however, the Trademark Trial and Appeal Board applied the incorrect standard.  The Board had based its decision on the assumption that an opposer's claim of prior use can succeed only if it proved use of its marks in connection with services rendered in commerce lawfully regulated by Congress. However, the Federal Circuit stated that such an assumption resulted in too high a burden and was unwarranted in light of the plain language of the U.S. Trademark Act, which merely requires the prior mark to have been used in the United States by another.  Thus, according to the Court, a foreign opposer can present its opposition on the merits by showing only use of its mark in the United States.

According to the Federal Court, the record unquestionably revealed more than ample use of FN-Canada's marks in the United States.  As a result, the Court reversed the decision of the Board and remanded the case for further proceedings consistent with its opinion.