IP ADR Blog

(image from the U.K. Trademark Application Blog)

What's the difference between an IP arbitrator or mediator and a general commercial arbitrator and mediator?  Some of us -- like Les Weinstein and Michael Young -- have devoted substantial parts of their careers to patent (Les) and trademark (Michael) litigation.

The rest of us -- the Hon. John Leo Wagner (Fed. Magistrate, Ret.), Eric van Ginkel, the soon-to-be-added Jay McCauley and I -- have litigated patent, trademark, copyright and other IP cases in the course of our more general commercial litigation careers.

What unites us is an avidity for the topic and an interest in keeping up with the law.  So in addition to being the quick studies that all general commercial litigators are, we're already all the way (Les, Mike) or half way there when you lay your fabulously instructive briefs on us.   

To help our clients and ourselves, we print tutorials from time to time by law firms who our statistics page tells us are reading our blog.  Today we excerpt and link to Lindquist and Vennum's terrific Trademark tutorial -- The Trademark Dilution Act of 2006 -- A Summary of Changes Affecting Trademark Owners

When is a mark famous?

A mark is famous if the general consuming public of the United States widely recognizes it as a designation of a source of goods or services.

In determining whether a mark is famous enough to merit protection under the Trademark Dilution Revision Act, a court may consider all relevant factors, including:

1. The duration, extent, and geographic reach of advertising and publicity of the mark, including whether the mark is advertised or publicized by the owner or third parties
2. The amount, volume, and geographic extent of sales of goods or services offered under
   the mark 
3. The extent of actual recognition of the mark 
4. Whether the mark was registered

Because no registry of famous marks exists, determining whether a particular mark is famous requires the court to evaluate these factors on a case-by-case basis.

What constitutes tarnishment and blurring?

Dilution by tarnishment is an association arising from the similarity between the famous mark and the diluting mark that harms the reputation of the famous mark—that is, when the diluting mark is used in connection with undesirable or inferior goods or services that could create a negative association with the use of the famous mark.

Dilution by blurring is an association arising from the similarity between the famous mark and the diluting mark or trade name that impairs the distinctiveness of the famous mark. Dilution by blurring reduces the connection in the minds of consumers between the famous mark and the goods and services for which it is used.

In determining whether a mark is likely to cause dilution by blurring of a famous mark, a court may consider all relevant factors, including:

1. The degree of similarity between the mark or trade name and the famous mark 
2. The degree of inherent or acquired distinctiveness of the famous mark 
3. The extent to which the owner of the famous mark is engaging in substantially
   exclusive use of the mark 
4. The degree of recognition of the famous mark 
5. Whether the user of the mark or trade name intended to create an association with the
   famous mark 
6. Any actual association between the mark or trade name and the famous mark

For the remainder of this excellent article, click here.

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The IP ADR Bloggers have just gone "live" with our new web site:  ipadr.com.

Come on by and check us out!  

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(pictured, Kell M. Damsgaard, leader of the Morgan Lewis Intellectual Property Practice)

I want to recommend the September 13, 2007 publication of the “Morgan Lewis Intellectual Property LawFlash.” It does an excellent job in summarizing the main provisions of the Bill that is to become the Patent Reform Act of 2007 after the House vote on this Bill (as amended). The Senate Judiciary Committee started out with an identical version, but the House has since adopted a number of amendments. It is unclear when the Senate will vote on its version of the bill.

As most of our readers know, the Patent Reform Act of 2007, if adopted, will make substantial changes in the way one applies for, manages and exploits, and challenges patents.

Rather than summarize here what those changes are, let me refer you to the Morgan Lewis intellectual property lawflash, which tells it like it is.

This “lawflash” was reproduced in the Lexology newsletter, which I find to be a very informative if sometimes repetitive newsletter. You can subscribe to it free of charge here.   

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by Eric van Ginkel

You can probably guess that  most of us here at the IP ADR Blog think it's a good idea to  include in your ADR clauses specialty requirements for the arbitration or mediation of your  commercial or IP disputes. 

Not to mention a bad idea to serve your infant beer before bed! 

The need for an ADR neutral with specialized legal or industry knowledge is particularly true for patent litigation but also important for the other "soft" forms of IP disputes.  

Let's not go overboard however, by requiring that the arbitrator have at least twenty-five years experience in trademark litigation, an office in Santa Barbara County, belong to a lawfirm with at least five offices and no fewer than 1,000 attorneys, and . . . . serve his clients beer before bed!

Riduculous you say?  Don’t be surprised, I have seen weirder clauses.

The Beer Before Bed Amendment to the Business and Professions Code

I was reminded of this problem today when I came across a proposed amendment to the Business and Professions Code introduced by Gloria Negrete McLeod, California State Senator for the 32nd District (San Bernardino County) back in February of this year. It is currently on Governor Schwarzenegger’s desk awaiting his signature.

This is a good example of legislators going overboard.  

The proposed legislation requires the arbitration of disputes concerning the termination of an existing wholesaler by a company aquiring a beer brewery.  If the terminated wholesaler believes the new brewer has not paid him the fair market value of his distribution rights, the dispute over compensation must be submitted to arbitration. So far so good.  But here's where the legislation goes astray.

The proposed amendment requires that the arbitration of the dispute must be held

through a private arbitration services provider with at least three offices in California and a statewide roster of at least 70 neutral arbitrators, of which at least 30 have prior experience as a sole arbitrator in franchise, distribution, or related business litigation.

We don't even want to go tothe "additional amendments" that will govern the "arbitration process."

So, as in all things, moderation is key.

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by Eric Van Ginkel

Remember Martha’s conviction for perjury that sent her off to jail a few years back? She served a 5-month prison term and 5 months in home detention (not so bad, I guess, if your home sits on 153 acres!). Her conviction, if you recall, arose from allegations concerning insider trading of ImClone stock.

Jail was also the fate for ImClone founder Sam Waksal, after he pleaded guilty to charges of securities fraud and other charges relating to insider trading, as well as wire fraud and other charges in connection with evading sales tax on some significant art purchases. Sam is still serving a seven years and three months sentence (about three more years to go).

Here is the news: ImClone just announced it has settled the patent suit that Repligen and MIT initiated against it.

The suit involved ImClone’s cancer treatment drug, Erbitux.

The connection?  Erbitux was the drug at the center of Sam and Martha’s insider trading debacle.

So, in a way, this is the end of the Martha/Erbitux saga.

Why do I write about this case?

Because it settled only one week before trial. 

That means, of course,  that all discovery was completed, briefs written and trial preparation done. Imagine the millions of dollars wasted before the parties came to the bargaining table ready and willing to finally negotiate a settlement that constituted a better alternative to the cost and uncertainties of trial. 

For ImClone, not all the misery is behind it. It is still facing the lawsuit Abbott lodged against it earlier this year.

Could this be a wake-up call to ImClone and Abbott?

It's not just about "trying mediation" anymore.  It's about having the skill-set necessary to make the mediation or settlement process as important as the litigation process.   It's about "thinking like a negotiator" as often as you "think like a lawyer."

How does a negotiator think? 

S/he thinks like a lawyer about interests instead of about legal positions.  

More on the negotiation mind-set in future posts.

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We're delighted to have as one of our bloggers international IP mediator and arbitrator Eric Van Ginkel.

With a background in both transactional and litigation law practices, Eric has been dealing with complex international corporate and business transactions for more than three decades. 

In addition to his IP practice, Eric has also litigated cases and advised clients concerning co-development deals, mergers and acquisitions, commercial real estate developments, straight and syndicated loans, and license and distribution agreements.

Eric acted as in-house counsel for almost ten years, and in that capacity, supervised the litigation of a substantial number of cases in the member countries of the European Union.

Eric is an arbitrator and mediator for the International Chamber of Commerce (ICC), the American Arbitration Association (AAA), the International Centre for Dispute Resolution (ICDR), the World Intellectual Property Organization (WIPO), the National Arbitration Forum (NAF), the Australian Centre for International Commercial Arbitration (ACICA), and the International Mediation and Arbitration Center (IMAC).

He also serves on the Panels of the United States District Court (Central District of California), the Los Angeles Superior Court and the California Court of Appeal (Second Division).

In addition to his LL.M. in dispute resolution from the Straus Institute, Eric holds Juris Doctor degrees from both the Law Faculty of Leiden University in the Netherlands and Columbia Law School in New York City. Being a Netherlands citizen living in California (having lived both in Europe and the United States), Mr. van Ginkel is sensitive to cross-cultural issues.

Eric is fluent in Dutch, English, French and German, and somewhat proficient in Italian and Spanish.

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Appeal of Arbitration Awards Should Be Permissible 

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(photo by Bansky)

by Eric Van Ginkel

If you and opposing counsel enter into a post-dispute arbitration agreement that involves a copyright infringement issue, be sure to dismiss the action that was pending in the US district court. If not, chances are you will be held liable for the winning party’s legal fees incurred in post-award proceedings under 17 USC § 505.

That is the lesson I draw from the decision of the US District Court for the Northern District of California in Brayton Purcell LLP v. Recordon & Recordon, --- F.Supp.2d ---, 2007 WL 1462365 (N.D. Cal., May 18, 2007) (currently available only on Westlaw).

What happened?

The law firm Brayton Purcell, headquartered in Novato, California (near San Francisco), discovered that the website of San Diego-based Recordon & Recordon had materials on elder abuse that looked a lot like Brayton Purcell’s page on that subject. Recordon brought the web designer, Apptomix, into the lawsuit, which argued that it had developed that page based on independent research.

The three parties decided to submit the dispute to binding arbitration. In May 2006, the arbitrator found in favor of Brayton Purcell, and the two defendants sought to vacate the award. The district court denied the motions to vacate and confirmed the award. Then Brayton Purcell filed a motion for post-arbitration fees and costs.

The Court’s Holding

The court found that Section 505 of the Copyright Act applied to this case.  

As this case was not dismissed by the parties when they agreed to submit the dispute to arbitration, this case remains a “civil action under this title” within the literal meaning of § 505. In this regard, cases cited by Recordon denying post-arbitration fees are inapposite. They do not involve a continuation of a court case in which interim arbitration has taken place, but rather the initiation of an independent lawsuit seeking confirmation of an arbitration award.

In other words, [t]he analysis might be different had the parties in the case at bar stipulated to a dismissal of the case as part of their agreement to submit to binding arbitration. There would no longer have been a “civil action” under the Copyright Act pending before the Court, and any new court filing seeking to confirm the arbitration award arguably would not be a “civil action” under the Copyright Act.

Rather, federal jurisdiction for such a suit would have to have been independently established, e.g., diversity. To be absolutely clear on the matter, the court stressed that in agreeing to binding arbitration, the parties could have stipulated that fees would be awarded only in arbitration, and not for any post-arbitration proceedings.

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