Omid Khalifeh, Author at Omni Legal Group Blog

Can artificial intelligence be a patent inventor?

The United States Patent and Trademark Office (USPTO) was recently required to determine whether a patent application may list artificial intelligence as an inventor. At issue were two patent applications for two separate, seemingly mundane devices. One application described a shape-shifting container for food and the other an emergency flashlight. The two inventions were created by DABUS, an artificial intelligence system created by physicist and artificial intelligence researcher Stephen Thaler. In a published decision, the USPTO determined that neither DABUS, nor any other artificial intelligence, can be listed as an inventor on a patent filing.

For a patent to be granted, it must satisfy certain requirements. The invention must be (1) patent eligible in that it is either a machine, process, article of manufacture, or a composition of matter; (2) useful; (3) new; (4) nonobvious; and (5) described with enough particularity that a person of ordinary skill in the relevant technology field would understand the invention without undue experimentation. Aside from these patentability requirements, the application must be filed with certain documentation, including, among others, an application data sheet which identifies the inventor(s).

When filed, the application papers at issue included an application data sheet, a substitute statement in lieu of a declaration, an inventorship statement, and assignment documentation assigning the entire right title and interest to Stephen Thaler. The application data sheet, which identifies the inventor or joint inventors of an invention, identified a single inventor with the given name “DABUS” and the family name “Invention generated by artificial intelligence.” Similarly, the substitute statement was executed by Stephen Thaler, who identified himself as the legal representative of DABUS and the applicant of the invention. Substitute statements take the place of an oath or declaration when an inventor is deceased, under a legal incapacity, has refused to execute an oath or declaration, or cannot be found or reached after diligent effort.

In August 2019, a Notice to File Missing Parts was issued, which indicated the application data sheet “did not identify each inventor by his or her legal name.” In instances where a Notice to File Missing Parts is issued, the patent application will still be accorded a filing date and application number. The applicant is then given a certain time period (usually two months) to file all required items and any fee. In this case, although the Notice sought a new application data sheet with correct inventorship, the applicant instead filed a petition requesting supervisory review of the Notice. This petition was dismissed, and the applicant requested reconsideration of this decision. The USPTO agreed with the prior ruling and therefore, refused to vacate the decision.

According to the applicant, DABUS is programmed as a series of neural networks that have been trained with general information in the field of endeavor to independently create the invention. Thaler claims it was DABUS, not a person, that recognized the novelty and importance of the purported invention. Moreover, DABUS was not trained to solve any specific problem nor was it trained on any special data relevant to the invention at issue. As a result, Thaler maintains the position that inventorship should not be limited to natural persons.

In explaining its decision, the USPTO provided several statutes, including that which sets forth the requirement that a patent application include “the name of the inventor for any invention claimed in the application” and that which defines “inventor” as “the individual or, if a joint invention, the individuals collectively who invented or discovered the subject matter of the invention.” The USPTO determined that the statute precludes the applicant’s proposed broad interpretation of “inventor.” Indeed, it was also explained that the terms “whoever,” “himself,” “herself,” and “person” suggest a natural person and not a machine. Further, the USPTO cited several Federal Circuit Court of Appeals decisions that set forth that drafted must be natural persons. Overall, the USPTO found that the language of the patent laws as written by Congress and as subsequently interpreted by courts unequivocally supports the position that machines cannot be inventors.

Is a photographer owed a licensing fee in addition to compensation for time and labor for commissioned photographs to be used in the launch of a premium tequila brand?

Los Angeles-based photographer Anais Ganouna and her company, Frank & Anais, filed a lawsuit against The Colors You Like (TCYL) and Cincoro Spirits Group (doing business as Cincoro) for copyright infringement, fraud, civil conspiracy to commit fraud, and unfair competition. Ganouna claims the defendants knowingly and unlawfully exploited her creative work in connection with Cincoro’s highly anticipated launch of its premium tequila brand in 2019. Cincoro is owned by Michael Jordan and four other NBA owners.

Ganouna is a professional photographer and was commissioned to do a photoshoot for the defendants of the agave fields and plants in Mexico, the tequila production process, and the tequila bottles and barrels, as well as other instrumentalities, used for Cincoro’s tequila. Prior to contacting Ganouna, TCYL had used a staff photographer for the project but was dissatisfied with the quality of the images produced. According to Ganouna, her photoshoot was a “major success” and the defendants expressed their excitement at the prospect of using the images in their advertising campaign.

For her time, Ganouna was paid a discounted day rate of $1,000 with the understanding that licensing/usage rights would be negotiated at a later point. Indeed, Ganouna claims that such rights are typically negotiated separately from a photographer’s day rate, which merely serves to compensate the photographer for its time. When Ganouna later reached out to discuss usage of her photographs, a representative for TCYL responded that it had not been made clear that licensing the photographs would cost additional money. This same representative also represented that TCYL would be hiring another photographer to do reshoots and that none of Ganouna’s photographs would be used. However, Ganouna alleges defendants never engaged another photographer for this purpose and that no reshoots ever took place.

In September 2019, Cincoro officially launched. At this point, despite defendants’ representations, Ganouna discovered that Cincoro had indeed used a number of her images on its website, social media accounts, including Instagram, Facebook, and Twitter, as well as in paid advertising (i.e., sponsored advertisements) and by third-party vendors. As such, Ganouna, through counsel, sent a letter to defendants demanding compensation for their purported use of her photographs and requesting they cease using the same until after a resolution had been reached.

In response to Ganouna’s letter, defendants claimed that TCYL had meta data proving that every photograph used was pulled from a video shot by TCYL and not from Ganouna’s photographs. Nonetheless, Ganouna argues that even if this is the case, the photographs selected from the videos taken concurrently with her photoshoot appear to be identical to her photographs or “extremely close derivatives thereof.” Indeed, Ganouna claims to have dressed the sets, staged the shots, and placed or directed the subjects of the shots. Moreover, Ganouna claims that video was not shot to accompany every scene Ganouna shot. To date, Ganouna’s alleged photographs remain on Cincoro’s website and social media pages.

Ganouna’ first claim for relief, copyright infringement under 17 U.S.C. § 101 et seq., requires the use of works protected by copyright law without permission for such usage, thereby infringing the copyright holder’s exclusive rights. Under copyright law, authors of original works of authorship that are fixed in a tangible medium possess numerous rights, including reproduction, preparation of derivative works, distribution, public performance, and public display. For economic rights to a copyrighted work to be transferred, such as through a licensing agreement, the transfer must be in writing and signed by the copyright holder. Notably, such transfer does not require payment or any consideration in exchange for the granting of a license. That being said, copyright holders often do require payment or otherwise place restrictions or obligations on the licensee. Thus, in this case, the court will determine whether by accepting a $1,000 fee, Ganouna had licensed the rights to her photographs. In any event, though defendants have not responded to Ganouna’s lawsuit, defendants may maintain their position that none of Ganouna’s photographs was used, in which case no license would be required.

Can 3M use a trademark infringement lawsuit to mitigate price inflation of N95 respirator masks during the global COVID-19 pandemic?

Earlier this month, 3M filed a lawsuit alleging trademark infringement against Performance Supply, LLC, an N95 respirator distributor in the District Court for the Southern District of New York. 3M alleges Performance Supply has been offering for sale counterfeit 3M-brand N95 respirators to unwitting consumers, including government agencies. In addition to addressing Performance Supply’s infringement of 3M’s eponymous trademark, the goal of the lawsuit is to eliminate “a false and deceptive price-gouging scheme” by this unauthorized supplier of 3M respirators.

Since 1902, when 3M began as a small-scale mining venture, it has become a provider of scientific, medical, household, and other products to consumers internationally. According to the Complaint, 3M is “an industry-leading provider of scientific, technical, and marketing innovations throughout the world,” including a portfolio of more than 60,000 goods and services. As it relates to this lawsuit, 3M offers a wide variety of medical devices, supplies, and personal protective equipment (PPE), including the N95 respirator.

For the past century, 3M has been using its trademarks, such as “ACE,” “POST-IT,” “SCOTCH,” “NEXCARE,” the slogan “3M Science. Applied to Life,” as well as others. However, 3M claims to be most widely recognized by its eponymous brand, including its standard character “3M” and the inset 3M design mark. 3M has been using its standard-character 3M mark as applied to respirators since at least 1960 and its design 3M mark on respirators since at least 1990. 3M claims that its 3M trademark is famous and distinctive.

Famous trademarks are those that have an immediate connection in the minds of the consumer with a particular product or service and the source of that product or service. Famous marks enjoy a broader scope of protection. Trademarks may become distinctive after five years of substantially exclusive and continuous use of the mark in commerce. Because 3M has been using its 3M marks on N95 respirators for more than 30 years, there can be little doubt 3M’s marks are distinctive.

During this global pandemic, 3M has doubled its production of 3M-brand, Model 8210 respirators, many of which are provided to healthcare workers. Indeed, 3M’s anticipated annual production is 1.1 billion respirators. These N95 respirators reduce exposure to airborne biological particles and liquid contaminants, which is especially crucial during the outbreak of the coronavirus. Despite investing capital and resources to increase its production of these essential N95 respirators, 3M has not increased its prices.

In addition to not increasing its prices, 3M has also taken an active role in counteracting price-gauging by third parties who seek to exploit the exponentially increased demand for 3M-brand N95 respirators. Not only have these third parties increased their prices, some sell counterfeit, lesser-quality versions of the masks and others even accept money for the respirators despite not having the product nor ever intending to deliver the product. 3M’s goal is also to protect the reputation and goodwill of its brand. In so doing, 3M has worked with law enforcement, retail partners, and even consumers to stop the unlawful practices related to 3M’s respirators.

Around the end of March, at a time when New York City was reporting record numbers of COVID-19 positive tests and deaths, Performance Supply emailed a “Formal Quote” to the New York City’s Office of Citywide Procurement. Therein, Performance Supply offered to sell the Office 2 million 3M-brand N95 Model 8210 and Model 1860 respirators at prices 500-600% over 3M’s suggested list price. Within the Formal Quote prepared by Performance Supply, 3M’s design and standard character marks were used nine times.

Due to Performance Supply’s “rampant use” of the 3M trademarks, as well as, the New York City officials’ mistaken identification of Performance Supply as an authorized vendor of 3M-brand, N95 respirators, the Procurement Office actually purchased $45 million-worth of purported 3M-brand N95 respirators. However, 3M claims to have no association with Performance Supply, nor is Performance Supply an authorized distributor of 3M products. As a result of this conduct, 3M filed claims for federal and state trademark infringement, unfair competition, false association, false endorsement, false designation of origin, trademark dilution, false advertising, and deceptive acts and business practices.

Does copyright infringement arise out of publishing embedded content from third-party websites?

The United States District Court for the Southern District of New York recently determined that Mashable lawfully used a photojournalist’s photograph pursuant to a sublicense from Instagram. Following a motion to dismiss by defendants, Mashable and parent company, Ziff Davis, the court held no copyright infringement had occurred by embedding the Instagram photo in an article. As a result, the plaintiff’s, Stephanie Sinclair, complaint for copyright infringement was dismissed.

The dispute began in March 2016, when an article titled “10 female photojournalists with their lenses on social justice” was published. The article highlighted the work of ten female photographers whose work focuses on social justice. One of the photojournalists featured, Sinclair, shoots for National Geographic and aims to protect girls’ rights and end child marriage by documenting sensitive human rights topics internationally. With a particular focus on gender issues, Sinclair most frequently shoots the subjects of child marriage and self-immolation. At issue is one photograph in particular, titled “Child, Bride, Mother/Child Marriage in Guatemala.” Mashable initially offered Sinclair $50 for rights to this photograph for the article. When Sinclair declined, Mashable embedded the image from Sinclair’s official Instagram account. Shortly thereafter, Sinclair filed a lawsuit for copyright infringement.

In including Sinclair’s Instagram photo in their article, Mashable used a process called “embedding.” This technical process allows a website coder to incorporate content that is located on a third-party’s server into the coder’s website. When users visit said website, the user’s Internet browser retrieves the embedded content from the third-party server and displays it on the website. Thus, the user sees the embedded content on the website, despite the fact of it actually being hosted on a third-party’s server. Instagram uses an “application programming interface,” or “API,” to enable users to access and share content posted to “public” accounts, such as Sinclair’s. Here, Mashable used the API to embed Sinclair’s photograph from her Instagram account to their article.

Previously, the nature of this lawsuit revolved around the server test. This doctrine focuses on the fact that a publication which uses a photo-embed code never stores the photo on its own servers or transmits it to the user. Rather, the embed code instructs the user’s Internet browser how to download the image directly from another site. In this case, the other site was Instagram, and particular, Sinclair’s official, public account. A majority of courts have found such use of third-party content to not constitute copyright infringement because the publisher is not distributing or displaying the content to users. Other courts, including the Southern District of New York, have found infringement in these instances claiming the technical details of how the photograph reached the user’s browser does not overshadow the fact that the news websites caused the photo to appear on user’s browsers without permission from the copyright holder. Problematically, under the server test, those who evaded liability for direct infringement could still be held liable for indirect copyright infringement.

Instead of relying on the server test, Mashable argued Sinclair granted a license to Instagram to use her photo when she uploaded it. In addition, Instagram’s terms of service state that it has the right to sub-license the photo to others. A copyright owner who permits a licensee to grant sublicenses cannot bring an infringement suit against a sublicensee, so long as the licensee and sublicensee have acted within the terms of their license and sublicense, respectively. Indeed, a sublicensee cannot acquire valid rights to copyrighted works if the sublicensor had no right to issue a sublicense in the first place.

By using Instagram’s embedding service, Mashable was lawfully sublicensing the photo from Instagram. The court agreed with this argument in finding no copyright infringement had occurred. This licensing-based reasoning clearly distinguishes between authorized and unauthorized social media uploads. Importantly, through a site like Instagram, which is automatically granted a license to content uploaded to its platform, the user who uploads content may disable any third-party use of the same by marking the post as private. Sinclair appears to have done just that as her photograph no longer appears in Mashable’s article. Moreover, any sublicense arising out of an Instagram-posted photo is limited to the embedding tool. Thus, if Mashable, or another entity, sought to use the photo for another purpose, it would require a separate license from Sinclair.

Tiger King

Netflix’s “Tiger King” has become a mainstay in many American households during this period of quarantine. Indeed, in the first few days following the hit, true-crime documentary miniseries’ March 20^th debut, more than thirty-four million viewers tuned in to follow the demise of Joe Exotic. Exotic is a self-proclaimed “gay, gun-carrying redneck with a mullet” who owns a big cat roadside zoo and animal park in Oklahoma. Moreover, those who watched learned that Joe Exotic’s intellectual property infringement was the first step in a series of negative events that eventually led to his conviction and prison sentence.

While much of “Tiger King” tracks Exotic’s bitter, decades-long discord with animal conservationist Carol Baskin, one particular episode focuses on trademark and copyright disputes between the pair. Baskin is the owner of Big Cat Rescue, which takes in large felines and allows them to live out their days in caged conditions. Baskin’s purported goal is to make the selling of exotic cats in the United States illegal. Baskin trademarked her logo, which includes the words “Big Cat Rescue.” Later, in the heat of the pair’s bad blood, Joe Exotic named his traveling venture “Big Cat Rescue Entertainment,” with a logo that looks uncannily similar to Baskin’s.

Notably, prior to Exotic’s use of “Big Cat Rescue Entertainment,” Baskin did not own a trademark for the phrase “Big Cat Rescue.” Instead, she merely owned a design mark for a logo that incorporated “Big Cat Rescue.” However, during prosecution of Baskin’s design mark, the trademark office required a disclaimer of “big cat rescue.” A disclaimer does not remove the disclaimed matter from the mark but is simply a statement that the trademark applicant does not claim exclusive rights in the disclaimed wording apart from the mark as shown in the drawing. In addition, just because Baskin failed to secure registration of the words by themselves, she may have nonetheless been entitled to common law protection due to her extensive prior use of the same. Thus, absent the consent judgment, Exotic may potentially have been able to prevail on his use of “Big Cat Rescue Entertainment.” That being said, due to the highly similar nature of the respective logos, as well as, the nearly identical services, Exotic likely would have lost on the design mark claim.

Later, between 2011 and 2012, a second lawsuit was filed against Joe Exotic by Carol Baskin and her husband alleging copyright violations. This litigation arose due to Exotic’s misappropriation and posting online of various photographs to which Baskin owned copyrights. During depositions, Exotic admitted to posting the pictures but still asserted that Baskin was not the original owner of the photos. Such an argument is irrelevant in copyright law and as such, Exotic was forced to pay Big Cat Rescue Corp. damages totaling $75,000. However, as a result of the consent judgment in the trademark dispute, Exotic owed more than $950,000 in damages, for a total of over a million dollars in judgments against him. As a result, Exotic became bankrupt.

Meanwhile, since the series’ release, multiple individuals or entities have filed trademark applications for marks including “TIGER KING” and “JOE EXOTIC.” For instance, one application for “JOE EXOTIC” is for hats, sweatshirts, and t-shirts, and was filed by a California company that presumptively has no connection to the Oklahoma-based flamboyant feline lover. By way of further example, applications for “TIGER KING” include for plush toys, clothing, bean bag chairs, decorative seasonal stockings, Halloween costumes, and multimedia goods. While these entities may believe they have gotten ahead of the curve by cashing in early on the series’ sudden popularity, their changes of security registration are most likely slim to none.

In particular, unlike the patent system, under which the first inventor to file an application is entitled to rights (assuming the other requirements of patentability are satisfied), trademarks are not awarded based solely on a first-to-file system. Rather, for trademarks, it is the first entity that uses the mark in commerce that matters. Moreover, unless the applicants get Joe Exotic to consent to the use of his name, the Trademark Act, which bars federal registration of a mark that consists of or comprises matter which falsely suggests a connection with a famous person, will likely block these applications from registering.

Can one copyright a graphic depiction of a mood?

In an action to determine whether certain anthropomorphized characters representing human emotions qualify for copyright protection, the United States Court of Appeals for the Ninth Circuit affirmed the district court’s dismissal of the action. The lawsuit was filed by Denise Daniels and The Moodster Company, who created “The Moodsters.” In their complaint, plaintiffs alleged that The Walt Disney company and Pixar infringed their copyrighted characters through the movie “Inside Out.” The Ninth Circuit also affirmed the district court’s denial of plaintiffs’ claim for breach of an implied-in-fact contract under California law based on plaintiffs’ alleged disclosure of information about The Moodsters to various employees of Disney and its affiliates.

Plaintiff Daniels is an expert on children’s emotional intelligence and development and designs and promotes initiatives that help children cope with their emotions. As a commercial application of this work, Daniels developed “The Moodsters” and hired a team under her company, The Moodsters Company. The Moodsters are lightly sketched anthropomorphized characters representing human emotions. The Moodsters include five characters that are color-coded anthropomorphic emotions, each representing a different emotion: pink for love, yellow for happiness, blue for sadness, red for anger, and green for fear.

In 2007, Daniels and her team created a 30-minute pilot episode for a television series featuring The Moodsters, titled “The Amoodsment Mixup,” which was later available on YouTube. Between 2012 to 2013, plaintiffs developed a line of Moodster products, including toys and books that were sold at Target and other retailers beginning in 2015. Moreover, plaintiff claims to have pitched The Moodsters to numerous media and entertainment companies. Notably, plaintiff alleges that the Walt Disney Company and Pixar were recurring targets, although no deal was ever reached.

Meanwhile, Disney began development of “Inside Out” in 2010 and the film was released in 2015. “Inside Out” centers on five anthropomorphized emotions that live inside the mind of an 11-year-old girl. Slightly different than The Moodsters, these emotions are joy, fear, sadness, disgust, and anger. In addition, in Disney’s telling, yellow is for joy, blue is for sadness, red is for anger, green is for disgust, and purple is for fear.

In 2017, plaintiffs filed their lawsuit for copyright infringement of The Moodster characters and breach of an implied-in-fact contract. According to plaintiffs, the contract arose from Disney using plaintiffs’ characters to develop “Inside Out” and the breach occurred when Disney failed to compensate plaintiffs for the material. As to copyright infringement, plaintiffs alleged infringement of the individual Moodster characters and the entire ensemble of characters. Disney responded to the lawsuit by filing a motion to dismiss, alleging that plaintiff failed to meet the standard for copyright protection and that plaintiff’s publication of the characters doomed plaintiff’s breach of contract claim. The district court granted Disney’s motion to dismiss and plaintiff appealed to the Court of Appeals for the Ninth Circuit.

At primary issue in this case is whether The Moodsters constitute copyrightable material. While characters are not an enumerated copyrightable subject matter, courts have often extended such protection to graphically depicted characters. A character is entitled to copyright protection only if (1) the character has physical as well as conceptual qualities, (2) the character is sufficiently delineated to be recognizable as the same character whenever it appears and displays consistent, identifiable character traits and attributes, and (3) the character is especially distinctive and contains some unique elements of expression.

Disney conceded that The Moodsters certainly have physical as well as conceptual qualities. However, the court determined that these characters do not qualify for copyright protection because they lacked consistent, identifiable character traits and attributes and were not especially distinctive. In particular, the notion of using a color to represent a mood or emotion is an idea that does not fall within the realm of copyright protection. The court noted the vast number of works featuring the idea of color psychology. The court further noted that colors themselves are generally not copyrightable. Moreover, The Moodsters changed significantly over time and therefore, lacked consistent, identifiable character traits. For example, the characters’ names changed throughout the various iterations. Indeed, other than the notion of color and emotions, there are few other identifiable character traits and attributes that have remained consistent across the various versions of The Moodsters.

Further, The Moodsters did not qualify for copyright protection under the alternative “story being told” test. Under this test, a character can be subject to copyright protection if it constitutes the story being told. In other words, to be eligible for protection, the character must be central to the story. On the other hand, if the character is “a mere chessman in the game of storytelling,” no protection subsists. Here, the court found that the depictions of The Moodsters failed to include any substantial character development or character study. Therefore, the court held that that characters each serve as a means by which particular emotions are introduced and explored.

What innovation has resulted from the ongoing coronavirus pandemic?

As the physical world has become increasingly inaccessible as a result of lockdowns announced in various countries, people have availed themselves of the virtual world. Numerous existing and novel applications have seen a significant increase in traffic as users find themselves seeking mental sustenance. Indeed, while applications such as HouseParty, Zoom, WhatsApp, and Netflix have addressed these needs and desires, other software has been released that may directly address the coronavirus pandemic.

Salcit Technologies is an India-based startup that has released an application that can be downloaded to one’s smartphone and that purportedly provides on demand respiratory assessment during early stages of the coronavirus disease. The technology implements audiometric evaluation of coughing, wheezing, breathing and crackling sounds to determine whether the sound is attributable to the patient’s airways, parenchyma, or pleura of the lungs. The system allows patients to remotely perform these assessments using only the speaker on their smartphone. In addition, this at-home assessment frees up doctors and other medical personnel who would normally diagnose these patients in-person or via other virtual healthcare services, such as Teladoc. The application also provides tracking of the patient’s symptoms and therefore, disease progress.

Salcit Technologies was granted an Indian Patent, No. 308156, for this invention, as well as, an International Patent Cooperation Treaty Application, Publication No. WO2019116381. The disclosure, titled “Method and System for Analyzing Risk Associated with Respiratory Sounds,” describes assigning a “risk category” to respiratory sound signals captured by an acoustic sensor, that is, the microphone of one’s device. In this system and method, the patient also inputs information related to their symptoms. Interestingly, while the invention is likely to prove useful for diagnosing and tracking coronavirus symptoms, the patent was granted in India in December 2017 and published worldwide June 2019.

Other applications have been developed to assist in health tracking. Two such apps, Coviguard and Covicare, track health statistics of individuals and also provide area-wide spread of the coronavirus. Similarly, another app, aptly called “Covid Symptom Tracker” helps people track symptoms related to coronavirus. This application in turn takes into account the rate at which the virus is spreading in a user’s area, high-risk areas, high-risk individuals, and other related analytics, thereby curbing the spread of the virus. Moreover, other technology companies have taken additional steps to slow the pandemic. As one example, together with the Center for Disease Control and Prevention, the White House coronavirus task force, and the Federal Emergency Management Agency, Apple launched a COVID-19 website and application that includes both information related to the disease as well as a screening tool.

While, for now, these tools are provided by way of free applications that can be downloaded directly to one’s smartphone, other coronavirus-related innovation may be subject to patent protection. This highlights a tension within the patent system, which simultaneously provides incentive for research and development while disallowing the fruits of that innovation to be publicly enjoyed (at least for the term of the patent). When an inventor is granted a patent, they are provided a twenty-year term during which they may exclude others from making, using, offering for sale, selling, or importing into the United States the invention claimed in the patent. Thus, arguably, if one were to invent a cure, a vaccine, method of diagnosing, or other helpful tool in the fight against coronavirus, this inventor could receive a patent and prevent others from benefiting from the invention. These concerns could potentially be addressed through a compulsory licensing scheme, adopted in other countries (not the United States), under which patents related to treating, diagnosing, or preventing the novel coronavirus present an exception to this rule.

Can a test for COVID-19 be subject to patent infringement?

Labrador Diagnostics has filed a lawsuit in the United States District Court for the District of Delaware against BioFire Diagnostics, a company that makes medical testing equipment and most recently, developed a test for the new coronavirus. The lawsuit alleges patent infringement of two of Labrador’s patents related to testing the presence of substances in bodily fluids. Labrador purchased these, and other, original Theranos’ patents after the failed blood-testing startup sold its patent portfolio to Fortress Investment Group in 2018.

One of the Theranos patents, United States Patent No. 8,283,155, teaches point-of-care fluidic systems and uses thereof. The patent describes a generic architecture for a machine that automates testing for the presence of substances in bodily fluids. The system includes a test device and a reader device. The test device contains both the patient’s bodily fluid to be tested and the reactants required to perform the test. However, no particular reactants, other than generally an immunoassay and nucleic acid reagents, or bodily fluids are disclosed. The reader device triggers the chemical reactions necessary to perform the test and reports the results. Again, however, no particular testing protocol is disclosed.

The other Theranos patent-in-suit, United States Patent No, 10,533,994, teaches systems and methods of sample processing and fluid control in a fluidic system. The system generally comprises a cartridge for sample collection and assaying and a reader assembly for detection of the presence or absence of the analyte and communication of the same. Again, no particular reactants or bodily samples are disclosed, nor are any reaction types. Indeed, the reactant is described as something that “reacts with the analyte to yield a signal indicative of the presence of the analyte.”

A working prototype or actual use of an invention is not needed to obtain a patent. In this way, your technology need not necessarily work in order to obtain a patent. This is how Theranos managed to obtain numerous patents regardless of its famed inability to produce functioning technology. Indeed, all that is needed to obtain a patent is a novel, non-obvious invention. In addition, a patent document must sufficiently describe the technology on which a patent is sought by disclosing the technologic knowledge upon which the patent is based and demonstrating that the inventor was in possession of the invention that is claimed at the time of filing.

The defendant-in-suit, BioFire Diagnostics, offer a BioFire Filmarray machine that automates detection of a variety of pathogens. Labrador claims that each of BioFire’s FilmArray devices, including the accompanying pouches and software, infringe its patents. Most recently, BioFire added coronavirus to the slate of pathogens capable of detection. Prior to the initiation of this litigation, the medical diagnostic supply company hoped to make this test publicly available to customers by the end of March.

After filing its lawsuit last week, a slew of bad press fell upon Labrador, including multiple articles referring to it as a “patent troll” and “tone deaf” given the recent coronavirus crisis. As such, earlier this week, the small firm announced it would grant royalty-free licenses to companies developing COVID-19 tests. The company also claims that it was unaware that BioFire was developing a coronavirus test at the time the lawsuit was filed. Nonetheless, Labrador appears to be intending to proceed with the lawsuit as no notice of dismissal has been filed.

Is Quibi liable for patent infringement and trade secret misappropriation of its turnstyle technology?

Eko, an interactive video company, accused Quibi of infringing one of its patents as well as misappropriating its trade secrets. In response, Quibi preemptively filed a complaint in the United States District Court for the Central District of California seeking a declaratory judgment of non-inringement of Eko’s patent and no misappropriation of trade secrets. The following day, Eko filed a complaint for patent infringement in the same court.

In Quibi’s original complaint, the mobile-video company seeks relief from Eko’s attempts to tarnish Quibi’s brand and interfere with the highly anticipated launch of its platform. Quibi argues Eko’s allegations result solely from the widespread advertisement of Quibi’s high-profile novel service. In particular, Quibi believes Eko is attempting to capitalize on Quibi’s early acclaim through “demonstrably false claims of intellectual property infringement.”

Quibi explains that two weeks after it announced its innovative platform at CES, an industry conference, Eko’s attorneys sent a demand letter to Quibi asserting that its turnstyle feature employs technology disclosed in Eko’s patent, thereby demanding Quibi immediately cease use of this proprietary technology. Quibi responded to the letter asserting its position but Eko proceded to contact a technology reporter to reiterate its false allegations and also, sent a notice to Apple, Inc. alleging Quibi’s app infringes Eko’s patent. Finally, Eko repeated its allegations to a reporter and editor of the Wall Street Journal. As a result of the foregoing, Quibi maintains its reasonably apprehended a lawsuit against it that could wrongfully impact its ability to release its service.

Quibi is an upcoming short-form mobile video platform set to launch April 6^th. Quibi utilizes an innovative technology designed to display television shows and movies on a small screen, such as that found on a smartphone. The platform was designed to optimize customer-viewing experience on a mobile device regardless of whether the phone was being held in portrait or landscape mode. As such, Quibi strove to create new technology capable of streaming video content that seamlessly adapted to those changes in orientation. Moreover, each episode is delivered in ten minutes or less, known as a “quick bite.” This service is targeted toward a younger demographic who commonly experience decreasing time and attention spans and increasing use of mobile devices. As of its launch, Quibi plans to offer more than fifty titles.

In its complaint, Eko complains that Quibi’s turnstyle mobile-video technology infringes United States Patent No. 10,460,765 for “systems and methods for adaptive and responsive video.” Unlike the prior art, Eko’s patented feature does not crop or letterbox a presentation but instead, provides seamless transition from a first state of a video presentation to a second state of a video presentation. Eko asserts that, starting in 2015, and through 2018, Bloch met with three former Snap, Inc. employees under a nondisclosure agreement to integrate Eko’s technology into the Snapchat application. Three of those former Snap employees joined Quibi mere weeks prior to Quibi filing for its own patent on the turnstyle feature.

Both complaints address meetings that took place between the founders of the respective companies. In its separate complaint, Eko argues that, in 2017, Quibi’s founder, Jeff Katzenberg, met with Eko’s founder/Chief Executive Officer, Yoni Bloch, to discuss a potential investment in Eko. Eko claims to have demonstrated its horizontal-to-vertical video technology. Ultimately, however, Katzenberg declined to invest in Eko. Quibi, in its complaint, asserts that no confidential information was requested nor provided during the one-time meeting of the companies’ founders.

Traditionally, patents and trade secrets have presented opposite choices. Trade secrets derive protection through reasonable efforts to maintain secrecy and could theoretically last indefinitely. On the other hand, patents are only protectable through public disclosure. Indeed, patents are obtained through filing a patent application which discloses exactly what the inventor purports to be his invention. In addition, a patent only lasts a period of twenty years, upon the expiration of which the inventor’s monopoly is released for public use. Moreover, while one cannot legally use verbatim an inventor’s patent, reverse engineering of a trade secret is permissible.

Is “Panda Libre,” an Arizona-based restaurant offering Mexican and Asian fusion, likely to be confused with Panda Express?

In August 2019, Panda Express sent a cease and desist letter to a Gilbert, Arizona-based restaurant, Panda Libre, which offers “Mexican and Asian Fusion” cuisine. In this correspondence, the fast food giant advised Panda Libre of its trademark rights and demanded that it cease using the mark, PANDA LIBRE. The proprietors of Panda Libre failed to respond to this letter in writing. However, attorneys on behalf of Panda Libre advised Panda Express’ counsel that it is unwilling to change its name and intends to continue use of the same.

Panda Express was originally founded in 1973 as “Panda Inn.” The “panda” concept of the restaurant was inspired by the emerging friendship between the United States and China at the time, which was symbolized by two panda bears, Ling-Ling and Hsing-Hsing. The two famous pandas were provided as gifts to people of the United States by China after President Nixon’s historic 1972 visit, which marked the culmination of the Nixon administration’s resumption of harmonious relations between this country and mainland China after years of diplomatic isolation. In 1983, “Panda Express,” the fast-service version of the Panda Inn, was opened and within ten years, there were nearly one hundred Panda Express restaurants. Now, Panda Express is the largest Asian-American restaurant chain and family-owned restaurant in the United States with nearly 2,000 stores.

Panda Express currently possesses over thirty federal trademark registrations. Indeed, the chain owns registration for PANDA, PANDA EXPRESS, PANDA PANDA, PANDA CAFÉ, GREAT PANDA, PANDA MANIA, PANDA KIDS, PANDA KITCHEN, and others. Moreover, several of Panda Express’ marks have acquired incontestability status due to their length of use. The restaurant claims to have expended significant resources to advertise its service and acquired substantial goodwill in its brand, including its marks. According to the complaint, of its offerings, Panda Express invented the “orange chicken burrito,” after introducing “The Original Orange Chicken” to the United States market in the late 1980s. Panda Express also asserts that this product was widely publicized as being an exclusive item.

Last week, Panda Express filed a lawsuit in the United States District Court for the District of Arizona alleging federal trademark infringement, false designation of origin, unfair competition, federal trademark dilution, and unfair competition. In order to prevail, the restaurant chain will need to demonstrate that consumers are likely to be confused, mistaken, or deceived as to the source or origin of the goods or services offered by Panda Libre in that consumers are likely to believe or assume that Panda Libre is sponsored by, affiliated with, or otherwise connected to Panda Express. In assessing this likelihood of confusion, courts analyze several factors including the similarity or dissimilarity of the marks in their entireties as to appearance, sound, connotation and commercial impression; relatedness of the goods or services offered by the parties; similarity or dissimilarity of established, likely-to-continue trade channels; and the conditions under which the sales are made.

Because Panda Express filed its complaint mere days ago, Panda Libre has yet to file an answer thereto. Pursuant to the Federal Rules of Civil Procedure, Panda Libre is allowed twenty-one days from being served with the summons and complaint within which to file a responsive pleading. In its response, Panda Libre will either admit or deny the allegations asserted by Panda Express and state in short and plain terms its defenses, if any, to each of the asserted claims. While Panda Libre did not formally respond to Panda Express’ written threats, it seems doubtful the single-location establishment will admit the restaurant chain’s allegations. Instead, Panda Libre owner, Paul Fan, has expressed his dismay with the lawsuit on the restaurant’s social media accounts indicating that it will “hold on as long as [they] can” but that the litigation “has put a heavy burden” on Fan and his family.

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