Gobble-Worthy Intellectual Property

Each year, as grocery stores fill with Butterball turkeys, canned gravy, and other Thanksgiving implements, the average American will spend roughly $200 on this holiday’s expenses. These costs include not only food and liquor but also travel costs. Indeed, the day before Thanksgiving and the Sunday thereafter are often the busiest travel days of the year with an estimated nearly 3 million people taking to the skies. As a result, companies and inventors alike have taken to the intellectual property system to address America’s needs with regard to turkey day.

An early turkey related patent involved a “Toy Representing a Turkey Gobbler,” the toy being made principally from pine burrs. Since that invention, others have created A Process for De-Boning a Turkey (U.S. Patent No. 6,572,467), a Cooking Jacket (U.S. Patent No. 4,942,809), and a Method of Preparing Turkey Product (U.S. Patent No. 3,347,680). Another turkey-related patent was granted in 2005 for a method and apparatus for preparing a roast turkey analog from vegetarian substitutes, which comprises a turkey mold. These are all examples of utility patents, which provide the inventor or assignee the right to exclude others from commercially exploiting or otherwise making use of the patented invention without the patentee’s authorization.

Moreover, many inventors have filed design patents having a Thanksgiving spirit. For instance, U.S. Patent No. D397,955, which issued in 1998 to Schmidt, depicts a turkey decoration featuring a plump turkey with proud tailfeathers. Another, U.S. Patent No. D184,815 for a Combined Cornucopia and Candleholder, includes three distinct candleholders set on a cornucopia. As a final example, U.S. Patent No. D527,217 issued in 2005 for a Thanksgiving Embossed Insert for Baking Pan which appears as a standard rectangular baking pan with harvest-type décor and the phrase “Happy Thanksgiving!”

Design patents are granted to any person who has invented any new, original, and ornamental design for an article of manufacture. A design patent protects only the aesthetic appearance of the article and not any accompanying structural or utilitarian features. This means, for instance, the inventor of the Thanksgiving Embossed Insert for Baking Pan can prevent others from copying their particular design of a baking pan insert but not from using a baking pan insert in general. Design patents have a term of fourteen years which grants the aforementioned inventors of these various Thanksgiving designs fourteen consecutive Thanksgivings during which to monopolize their design.

Other examples of turkey day intellectual property include copyright registrations for songs and poems commonly associated with the holiday. Adam Sandler likely holds the copyright for “The Thanksgiving Song.” Similarly, “A Charlie Brown Thanksgiving” by Vince Guaraldi Trio and even “Five Little Turkeys” by The Learning Station are subject to copyright protection. Under copyright principles, these artists’ works are protected provided they constitute original works of authorship, which requires at least minimal creativity.

Finally, a number of individuals and companies hold trademarks for various Thanksgiving terms and phrases. As fans of the popular television show “Friends” will appreciate, “Thanksgiving Pants” is registered for pajama bottoms. Additionally, Macy’s West Stores, Inc. has held the mark “Macy’s Thanksgiving Day Parade” as applied to entertainment services, namely, organizing and conducting a parade, since 1998. There are also multiple registrations for various cities’ turkey trots, such as the “San Francisco Turkey Trot.”

Even the basic term “Thanksgiving” has a few registrations. For example, Multimedia Games, Inc. owns the word as applied to computer game software for gaming machines, namely, slot machines and video lottery terminals. Another registrant owns the term in connection with jerky, meat-based snack foods, and dried meat. It is important to note that a registered mark only allows the holder to prevent others from using that term or phrase in connection with similar goods or services in such a way that it is likely to cause the consuming public to be confused. To illustrate, if one were to use “Thanksgiving” on a coffee mug, this would not infringe the trademarks for gaming machines or jerky.

While these numerous examples of intellectual property can be viewed as attempts to extort America’s dedication to Thanksgiving, the alternate perspective is to feel grateful that so many creative minds have consistently been envisioning ways to make the holiday more convenient, efficient, or even enjoyable.

Nike: Just Patent It

In its increased focus on smart garments, Nike has filed two patents, one for self-cleaning footwear and another for a bodysuit that can accurately teach yoga to its wearer. These patents were filed in the midst of Nike releasing the first self-lacing shoe. Back in 2014, Nike obtained patents for self-lacing technology, similar to that seen in “Back to the Future,” and recently, the Oregon-based sportswear giant announced its Hyperadapt sneaker complete with electric adaptable reaction lacing capable of adjusting the laces, pressure, and fit to the contours of the user’s foot. That being said, it remains unclear whether Nike will make use of these two recent patent filings as it did with the Hyperadapt technology.

The first patent, related to “an article of footwear with soil-shedding performance,” claims a shoe designed for use in “conditions normally conducive to the accumulation of soil on the outsoles.” The filing describes the state of the prior art as featuring outsoles designed to provide traction on soft and slippery surfaces. Such outsoles often feature exaggerated tread patterns lugs, cleats, spikes, and/or rubber material to improve traction under wet conditions. A problem with these designs is the accumulation of soil and dirt in the interstitial space between cleats, lugs, or tread patterns, said accumulation ultimately weighing down the footwear and actually harming traction.

In order to solve these issues, Nike created its self-cleaning shoe that includes a sole capable of absorbing water from the terrain in one step and then expelling it in the next step, effectively squirting dirt and debris from the footwear with every other step. To accomplish this, the footwear comprises an “open-cell foam material.” Essentially acting like a sponge, due to  the compressive compliance and chemical nature of the open-cell foam, the outsole can expel water from the foam, thereby disrupting the cohesion of soil particles to each other and on the outsoles. The patent boasts that the article of footwear retains at least 20% less soil by weight as compared to an article of footwear not featuring the open-cell foam material. Largely, the shoe is designed for trail running and activities in rainy or muddy environments. However, the disclosure discusses applications in golf, baseball, American football, soccer, rugby, hiking, and even military use.

The other patent, entitled “apparel with ultrasonic position sensing and haptic feedback for activities,” teaches a garment having a plurality of ultrasonic positioning sensors and a plurality of haptic feedback devices configured to determine the position of the wearer’s body and provide feedback based thereon. This sensor-laden bodysuit has placed sensors at predetermined locations on the article, which correspond to locations of particular relevance to the activity being undertaken. The system then determines where the sensors should properly be placed and signals to the wearer to adjust a position, motion, or other aspect of their activity. This disclosure works ideally for form-fitting apparel, worn in connection with activities such as aerobic exercise, acrobatics, and yoga.

This smart garment connects with corresponding software, such as a smartphone application. The app can, in turn, show or otherwise instruct a user how to properly position his or her body. Additionally, the bodysuit itself features sensors that vibrate when misaligned and which can guide the user’s movement to a proper position. The sensors are capable of producing data over time, including instantaneous, real-time position sensing in addition to long-term information gathering such that a user can track his or her progress. Further, the bodysuit features a respiration sensor positioned so as to detect expansion and contraction of the fabric corresponding to the wearer’s breathing. The respiration sensors could then inform the suit as to the extent of strain or exertion experienced by the wearer.

Trick-or-IP

Similar to other holidays, Halloween brings with it a number of intellectual property concerns. This is unsurprising as Halloween propagates a large amount of creative energy and spans almost every area of intellectual property law.

When one thinks “Halloween” perhaps the first thing to come to mind is the classic jack-o’-lantern, featuring a carved face in an evacuated pumpkin, turnip, or other root vegetable. In 1889, a jack-a-lantern was patented for a device capable of providing amusement for children and which can also be used as a campaign torch for celebrations, torch-light processions, political meetings, and “other like occasions where an effective pyrotechnic display is desirable.” Indeed, U.S. Patent No. 396,252 issued to George Beidler for a lantern, constructed of sheet metal, papier-mache, glass or other material, in which eyes, nostrils, and a mouth are stamped or otherwise represented so as to allow a candlestick displaced therein to show through.

Roughly one-hundred years after Mr. Beidler patented the jack-a-lantern, the first pumpkin carving kit was patented and aptly called the “carve-o-lantern kit.” This patent discloses not only different types of cutting tools for penetration of “the fleshy shell of a pumpkin” but also an instruction book which provides various patterns and decorative designs to be used on the pumpkin. Interestingly, the assignee of this invention, Pumpkin Masters, used its patent to sue more than fifty retailers and manufacturers for allegedly infringing its patented kit. Big name defendants included Williams-Sonoma Inc., Walt Disney Co., and Restoration Hardware. Most of these suits settled but Pumpkin Masters continued to maintain its position that it “changed the way America carves its gourds with unique scooping and cutting tools that allow for elaborate design.”

As most children would likely agree, there can be no Halloween without candy and there can be no candy without a means of carrying it. As such, U.S. Patent No. 6,629,810 issued in 2003 for a “Halloween treat carrier.” The carrier essentially features a container having a Halloween design and a glow-in-the-dark material.

Another pumpkin-y treat carrier, a “Halloween portable container,” appears to be a jack-o’-lantern on wheels capable of carrying treats collected during trick-or-treating. U.S. Patent No. 7,594,669 to Linda Acosta confirms the invention comprises a rolling container contemplated to be in the form of a pumpkin, witch, ghost, goblin, monster, vampire, werewolf, or any other Halloween related object, and having a cover, as well as, an arm or rod to assist in the maneuvering, driving, or controlling of the apparatus. This rolling trick-or-treat container solved the difficult task faced by many children of having to carry a heavy sack of confections, which generally does not have a lid to prevent spillage and unwanted spoilage of said confections.

Candy companies have not hesitated in capitalizing on Halloween by taking advantage of the intellectual property system in protecting their various confections. The popular candy corn, commonly associated with the holiday and the fall season, was trademarked in 1997. The Goelitz Confectionary Company, now known as the Jelly Belly Company, applied for and received registration for “The Original Gourmet Candy Corn.”

As another example, since 1906, The Hershey Company has held the trademark for “Hershey’s.” Additionally, Hershey owns trademark for the design of Hershey’s Kisses as well as the term “kisses.” Moreover, Hershey was initially denied registration for “kiss” due to the term constituting the generic word for that type of candy. The Hershey Company commissioned a survey of potential candy buyers, to whom the difference between a brand name and a generic name was explained and who were asked whether kisses (in addition to other names such as M&M’s and malted milk balls) were generic or brands. Due to the survey’s overwhelming results indicating that consumers understood “kiss” to emanate from Hershey, the Appeals Court sided with Hershey, allowing the company to trademark the word.

Finally, costumes have continued to generate a decent amount of litigation, most of which has been copyright-based. Indeed, in 1991, the Copyright Office used a Policy Decision on the Registrability of Costume Designs, providing that fanciful costumes were to be treated as useful articles and therefore, were generally not subject to copyright protection. This decision effectively defined costumes under the useful article doctrine, which provides that useful articles are those with an intrinsic utilitarian function that is not merely to portray the appearance of the article or convey information. As such, “useful articles” are not copyrightable. Costumes serve a dual utilitarian purpose as both clothing and also as masquerading.

Masks, on the other hand, are not useful articles and may qualify for copyright protection. That being said, masks, as with all other works, must still meet basic copyrightability requirements, such as the requirement that the mask be original. In one instance, the creator of the mask that was used for Michael Myers brought suit against the makers of the Halloween movie franchise for copyright infringement. The mask-maker ultimately lost because the Court determined the mask was merely a mold of actor William Shatner’s head, originally formed for a Captain Kirk mask, and therefore was not sufficiently original to warrant protection.

American Airlines Detours From Copyright Office After Experiencing Turbulence in Attempted Registration of Its Logo

The Fort Worth-based airlines, American Airlines, recently took a detour in its attempt to obtain copyright registration for its new logo by filing a lawsuit against the Copyright Office in federal court in the Northern District of Texas. American, believing the Copyright Office’s determination to be wrong, has requested the federal judge overrule the department’s decision. The airline goes on to assert that the agency routinely accepts registration for logos that are no more, and in many cases less, creative than that of American.

In June of 2016, American first filed for copyright registration of its new logo. A few months later, in October of 2016, the Copyright Office rejected the application claiming the logo “lacks the authorship necessary to support a copyright claim.” After this initial rejection, American sought reconsideration, which was against denied. Yet again, the air carrier sought reconsideration, which was finally rejected in 2018.

Due to a major rebranding that was concurrent with American Airlines’’ merger with U.S. Airways, the former sought to revamp its iconic double “A” logo and introduce a more modern image. The previous “AA” logo had been in use for more than 40 years, beginning in 1968. The new logo, first introduced in 2013, features an eagle with its head bisecting a diagonal design encompassing the eagle’s wings and which also looks like the vertical rudder of a jet aircraft. The color blue appears above the eagle’s somewhat abstract head while red appears below, thereby maintaining the classic “American” color scheme. When initially introduced, the logo’s designer, Futurebrand, was awarded a Clio, which is a top advertising award, for its work.

The Copyright Office vehemently disagrees with American’s position, finding that the logo does not even comprise the minimal level of creativity necessary for copyright registration. At one point, the office even stated, “while the bar for creativity is low, it does exist and the work cannot glide over even its low heights.” The agency describes American’s logo as “a trapezoid with two curved corners overlaid in the middle by a triangle with a curved right point, justified to the left edge of the trapezoid. The top of the trapezoid is blue, the bottom of the trapezoid is red, and the triangle is white. All of these elements have some shading. The trapezoid is reminiscent of an airplane’s tail, while the triangle could be described as an abstraction of a bird’s head.”

Copyright protection subsists in original works of authorship. Thus, to be protectable as a copyright, each work must at least satisfy the originality requirement, which necessitates the work have independent creation and sufficient creativity. Independent creation merely means he work was independent created by the alleged author and was not copied from someone or somewhere else. Sufficient creativity, on the other hand, requires that there must be “more than a modicum of creativity.” That is, the work must possess more than a de minimis quantum of creativity. This very low threshold was discussed and solidified in Feist Publications, Inc. v. Rural Telephone Service Company, 499 U.S. 340 (1991). In that case, the Supreme Court found that the white pages in a telephone directory do not embody the requisite modicum of creativity because they simple listed names, addresses, and numbers in alphabetical order. By contrast, the Court held, the yellow pages in a telephone directly may potentially meet the threshold level because they embody some level of creativity in the selection, coordination, and arrangement.

Notably, American Airlines’ logo is already registered as a trademark. In fact, American owns multiple registrations and applications incorporating the logo as a trademark. It is understandable why the company would seek copyright protection in addition to its trademark registrations though. Namely, copyright registration offers a broader range of protections as it allows the owner to protect against any unlicensed use that is outside of fair use. Dissimilarly, trademarks refer to phrases, symbols, or designs of one party that distinguish that party from others in the relevant marketplace and trademark registration only allows the owner to prevent the mark from being used by others in commercial settings. Moreover, trademarks are designed to prevent confusion in the relevant marketplace, not merely copying, which severely limits what uses of a trademarked logo may be considered infringing.

Representatives from the Copyright Office have not released any public statement nor have they responded to the lawsuit. American Airlines has publicly remarked that it is not taking its decision to bring suit against the agency lightly. Indeed, in its complaint, American acknowledges that in most cases, the Copyright Office’s decisions are “consistent and well-reasoned,” but that the present decision is “arbitrary, capricious…and an abuse of discretion.” If Supreme Court precedent in Feist Publications, Inc. is followed, American is expected to be successful in this litigation.

Just Dunkin’

Dunkin’ Donuts recently announced its intention to drop “donuts” from its name. “Dunkin’” will continue to be featured in the familiar rounded font with an orange-and-pink color scheme. The name change was tested at a handful of Massachusetts restaurants late last year and apparently was successful. As such, commencing in January of 2019, the name change will officially take effect as part of a major rebrand of the company with the new name appearing on napkins, boxes, and signs at United States stores. The name change will eventually be adopted by the company’s international locations so that the company’s more than 12,500 stores globally will reflect this alteration.

Doughnuts will continue to be sold by “Dunkin’” but it will increase its emphasis on coffee and other drinks, such as nitro-infused cold brew. Indeed, the CEO stated that “there is no Dunkin’ without donuts!” This shift toward drinks has been occurring for a while now, as evidenced by the company’s cut of 10% of its menu earlier this year. Drinks currently comprise 60% of its sales. Moreover, the new name is consistent with the tagline used by Dunkin’ Donuts since 2006: “America Runs on Dunkin’.”

Over the last 68 years, Dunkin’ Donuts has become a very well-known brand. In fact, the company’s spelling of the word “doughnut” as “donut” arguably popularized the spelling as part of the American lexicon. The Merriam Webster dictionary even added the term “donut” as a less common spelling of “doughnut.” As a result of this popularization, the word has likely suffered genericide. A trademark becomes genericized when the term or phrase no longer becomes associated exclusively with the brand. Instead, the term becomes associated with the product or service itself.

Generic terms cannot operate as trademarks, whether commonly understood as the name of a product or service or otherwise becoming known in such manner due to prolific use thereof. Trademarks are aimed at distinguishing the goods or services of one enterprise from those of other enterprises. Thus, consumers are unable to distinguish between different parties’ goods and services when generic terms are used. Such terms therefore cannot properly indicate source. As an example, the term “escalator,” while originally a registered mark of the Otis Elevator Company, is now known as the name of a moving staircase. As another example, the word “zipper” was originally owned by B.F. Goodrich for use in rubber boots but has since taken on a generic meaning. Here, the term “donuts” has become so accepted and used in our lexicon that the term is now generic.

In contrast to generic terms, descriptive trademarks are words that identify the characteristics of a product or service to which the mark pertains and can serve as source identifiers. Descriptive terms may acquire distinctiveness because, over time, the consuming public may come to understand the terms as associated with specific goods or services. Acquired distinctiveness, or secondary meaning, indicates that although the mark on its face describes the relevant goods or service, consumers have come to recognize the mark as having a source indicating function. Secondary meaning is often achieved through long term use or large amounts of marketing and advertising.

While not overtly admitted, it seems Dunkin’ Donuts has sensed the genericide of the word “donuts” for some time now. This is evidenced by the fact that trademark applications and registrations filed by the company have often required the disclaimer of the term “donuts” for certain classes of goods and services. A disclaimer in a trademark application or registration is a statement made of record to indicate that the owner does not claim any exclusive rights to the disclaimed portion of the mark. Disclaimed words are usually those considered to be generic, descriptive, or informational. For example, Sprinkles Cupcakes owns registration of the identical phrase for a variety of goods and services and all with the term “CUPCAKES” disclaimed. Interestingly, the original registration for “DUNKIN’ DONUTS” circa 1963 did not require disclaimer of the term “donuts.” However, later iterations of “DUNKIN’ DONUTS,” including design marks, have necessitated such disclaimer for certain classes.

Due to the likely genericide of the term “donuts,” Dunkin’ Donuts’ decision to drop the term serves not only to modernize its brand but also to strengthen it. What remains unclear is whether the consuming public will accept this change and start referring to the multinational quick service restaurant chain as “Dunkin’” or if this official change will literally be “in name only.”

District Court Extinguishes Copyright Infringement Claims

A United States District Court Judge recently extinguished a lawsuit brought by a hairstylist against Gwen Stefani, Pharrell Williams, and Interscope Records alleging direct, contributory, and vicarious copyright infringement based on defendants’ song, “Spark the Fire.” The lawsuit also included a separate conversion claim under California state law against Stefani only. Having been previously unsuccessful in obtaining a dismissal of the case when it was transferred from its original court in Colorado to California, the defendants filed a motion for summary judgment. Judge Dolly M. Gee granted this motion in favor of the defendants, finding the works in question were not substantially similar so as to sustain a claim for copyright infringement.

The plaintiff, Richard Morrill, is a singer/songwriter and former Huntington Beach hairstylist who allegedly colored and styled Stefani’s hair one time in 1998. Morrill is best known for his stint in the late 1980s/early 1990s metal band, L.A.P.D, an outfit which later became Korn. During his session with the then-twenty-something No Doubt star, Morrill played his song “Who’s Got My Lightah?” In response, Stefani claimed to like the song and agreed to accept a compact disc with the same on it. Morrill contends to have written and recorded his original version of “Who’s Got My Lightah?” in 1996, two years before sharing it with Stefani. Fast forward to 2014, during which time Morrill discovered the alleged infringement when Stefani and Williams performed their then-recent hit on “The Voice,” a television singing competition. The plaintiff further claims a 2009 derivative version of the song, “Who’s Got My Lighter,” is also infringed by “Spark the Fire,” although this version was not shared directly with Stefani or any of the defendants.

In his complaint, Morrill alleges the lyrics, chorus, rhythm, melody, metric placement, background music, and accompanying sounds in the defendants’ song and his two copyrighted works are extremely similar. More specifically, the plaintiff asserts there is structural similarity and recurring lyrics between the paired hook structures of the works. Plaintiff’s song features the lines “Who got my light-ah” followed by “who got my fi-ah” while defendants’ song contains “Who got the light-ah” and then “let’s spark the fire.” Moreover, Morrill pointed out the distinctive pronunciation that is different from standard English. For instance, the pronunciation of the words “lighter” and “fire” as “light-ah” and “fi-ah” is identical among the songs. The plaintiff further asserted that Stefani, Williams, and the label made at least $25 million from “Spark the Fire.”

A judge should properly grant a motion for summary judgment when the requesting party shows that there is no genuine dispute as to any material fact and that the requesting party is entitled to judgment as a matter of law. Once the moving party has met this burden, the nonmoving party then is required to demonstrate that there exists specific facts that create a genuine issue for trial. Copyright infringement occurs where (1) the plaintiff owns a valid copyright and (2) the defendant infringed elements of that work that are capable of copyright protection.

Here, there is no dispute that the plaintiff owns copyrights in both the 1996 original version and the 2009 derivative version of his song. That being said, absent evidence of direct copyright, infringement can be established by showing the defendant had access to the plaintiff’s work and that the works are substantially similar. In determining substantial similarity, courts break down the respective works into their constituent elements. Those elements are then compared for proof of copying. In this comparison, it is crucial to distinguish between protected and unprotected elements. More particularly, the scènes à faire doctrine provides that certain elements, which are stock or standard features commonly associated with the treatment of a given subject, are unprotectable under copyright law.

In dismissing the case through summary judgment, Judge Gee found Morrill failed to show substantial similarity between his copyrighted work and the accused song. Primarily, the court found pronunciation of the words “lighter” and “fire” as “light-ah” and “fi-ah” does not, in itself, demonstrate similarity. In particular, while this is not the pronunciation in standard English, pronouncing words that end in an “-er” with an “ah” sound is a common practice in African American vernacular English. In fact, according to the court, this practice predates Morrill’s 1996 song and is viewed as a staple in rap and hip-hop music, as well as, other types of media. Moreover, deleting verbs is another common practice in African American vernacular English. For instance, the court cited pronunciation of “who got” instead of “who’s got” in the movie “Billy Madison.” As another example, the court referred to the identical pronunciation of the words “fire” and “lighter” in The Roots’ song, “Push Up Ya Lighter.”

As another matter, the court determined that the common practice of rhyming the last word in the line of a song is not protectable. Specifically, the plaintiff claimed the respective songs are substantially similar, in part, because of identical rhyming of the words “light-ah” and “fi-ah” on the fourth beat of each song. Additionally, the presence of a long-short-long rhythm does not render the two songs rhythmically similar as this practice is too general to be protectable. Furthermore, the alleged “similar rhythms” are implemented in vastly different manners in each song.

Lastly, Judge Gee concluded there was no infringement of the 2009 version of the plaintiff’s song because it is a derivative work. Copyright in a derivative work only subsists in the material contributed by the author of such work. Protection is limited to changes and contributions made and does not cover preexisting material, such as the plaintiff’s 1996 version of the song. With all of this in mind, the court ultimately concluded Morrill did not sufficiently establish substantial similarity so as to present a genuine issue of material fact for trial.

A Tale of Two At-Home Exercise Bikes

Indoor cycling has become one of the most competitor spaces in the fitness market, with many popular studios vying for consumers’ attention. Companies such as SoulCycle, which is now international, and Los Angeles-based Cycle House offer cycling classes where an instructor and participants exercise on stationary bikes with the instructor and music combining to motivate the riders. Peloton, on the other hand, offers a fitness experience unique and disparate from that previously offered by indoor cycling studios and gyms. Launched in 2012, Peloton is a high-tech fitness company known for its popular and trending home-fitness bike. In merely six years, the company has delivered more than 250,000 bikes and maintains over 600,000 active riders.

To adequately protect its novel technology, Peloton applied for and was granted two patents, United States Patent Nos. 9,174,085 and 9,233,276, for an “exercise system and method.” The disclosure delineates the limitations of class-based fitness experiences. In particular, such classes are only accessible at specific times and locations, which may not be convenient or available to some consumers. Moreover, such studios have limited space with classes often selling out even for those users in a location convenient to the studio. As such, Peloton Interactive, Inc. invented and developed an at-home fitness bike which incorporates a tablet screen to permit the user to watch the instructor, view their statistics, and compare their performance to other riders.

In November 2017, Flywheel Sports, Inc. launched its FLY Anywhere bike, also designed for at-home use. Flywheel launched in 2010 and has historically offered studio-based cycling workouts. Since its inception in New York, Flywheel now has 43 studios across the nation. Peloton filed a lawsuit in the United States District Court for the Eastern District of Texas in Marshall, Texas against Flywheel accusing it of offering a copycat version of its home-fitness bicycle. Peloton claims Flywheel’s FLY Anywhere bike uses Peloton’s technology to stream live and on-demand classes, track the rider’s performance, and compare the rider’s statistics to other riders. The Peloton bike starts at $2,245 and all of its machines come standard with a screen. Flywheel’s bike, on the other hand, runs around $1,699 and consumers must pay extra to have a screen included on the bike itself. Both machines require users to pay extra to subscribe to the classes.

Interestingly, in early 2012, Peloton and Flywheel engaged in discussions regarding a potential partnership. Per these discussions, Peloton was to be the interactive arm of Flywheel, focused on developing the at-home cycling business utilizing Flywheel’s instructor-led, studio-class content. Meanwhile, Flywheel would continue to run its existing studio cycling businesses. While Flywheel was initially interested in the partnership, the deal ultimately fell through.

Other than these discussions in 2012, in its complaint, Peloton claims that it had another run-in with Flywheel, albeit unknowingly. Three months before Flywheel’s new bike was announced, a Flywheel investor, Michael Milken, approached the CEO of Peloton, John Foley when Foley, Milken, and other chief executives attended a private investment conference. Milken allegedly pressed Foley for details about Peloton’s technology and business strategy, presenting himself as a potential investor. Milken, however, did not disclose the salient fact that he was a major investor in Flywheel. Instead, according to the complaint, Milken misappropriated this information to facilitate the development, sales, and marketing of Flywheel’s infringing bike.

In its complaint, Peloton details the hard-won journey of the attempt to build the first Peloton bike. The company notes the many technical and hardware challenges and the “dozens of investors” who refused to invest. Peloton explains that prior to its machines, no existing exercise bike had all the features sought after by Peloton, nor were there any existing products that would communicate with bike hardware, or track and analyze rider performance. The complaint further alleges Peloton was the only company to “think beyond the studio experience.” The complaint concludes “[y]et through research, ingenuity, and persistence, Peloton pushed on, working with two core manufacturing partners to design and produce the necessary high-tech, sleek bikes and tablets.”

In response to these allegations, a spokesperson for Flywheel claims this lawsuit is “a classic example of a big business trying to intimidate a competitor out of the marketplace.” Moreover, the spokesperson emphasized the fact that Flywheel launched its “unique and differentiated indoor cycling offering that utilizes proprietary on bike FLY Tech tracking technology and signature features,” such as scoreboards and individual personalized performance trackers eight years ago. By comparison, Peloton only introduced its home indoor cycling experience four years ago, employing many of the features first pioneered by Flywheel.

Ironically, before Flywheel announced any intention to release an at-home bike, Foley boasted that he had no concern regarding competition in the stationary cycling space from companies like Flywheel. Rather, the CEO posited his concern would be targeted at technology companies, like Amazon, coming into the space “versus a content company trying to figure out what Peloton does.” In an interview, the CEO stated that brands like SoulCycle and Flywheel were content companies that are known national brands for their local studios.

Federal Circuit Affirms Termination of CRISPR Patent Interference Proceeding

CRISPR-Cas9 is a revolutionary genome editing technology with a host of potential biotechnology applications and also, the subject of three-year long litigation between leading research institutes. During the period of 2011 to 2012, two research teams, one at the University of California-Berkeley and the other at the Harvard and Massachusetts Institute of Technology-affiliated Broad Institute, were researching the same mechanism simultaneously yet separately. Finally, by the end of 2012, Dr. Jennifer Doudna of UC Berkeley published her findings on how to transform CRISPR from a natural bacterial mechanism into a laboratory-based genome editing tool. In 2013, Feng Zhang of the Broad Institute published a paper outlining the CRISPR process as applied to eukaryotic cells. Then, in April 2014, The Broad Institute received the first of several issued patents for the mammalian use of CRISPR.

While the Broad Institute’s patent applications were not the first CRISPR-related applications to be filed, these were the first that described actual experimental data in mammals. Doudna’s disclosure instead focused on CRISPR in cell-free systems, such as bacterial systems in test tubes. Indeed, Doudna’s invention was not directed to genome editing in eukaryotic cells. The Broad Institute’s issued patents, on the other hand, deal with genome editing in eukaryotic cells, focusing more particularly on its usage in human and mouse cells. This patent granted by the United States Patent and Trademark Office thereby awarded the Broad Institute the exclusive rights to use the CRISPR-Cas9 for eukaryotic cell-editing methods.

Derived from a protein found in Streptococcus bacteria, CRISPR-Cas9 is a gene-editing tool capable of making precise cuts and rearranging viral DNA. CRISPR-Cas9 renders possible a variety of advancements in fields such as medicine, biology, and agriculture. In particular, CRISPR-Cas9 may potentially help to cure genetic diseases such as Huntington’s disease, sickle cell anemia, and cystic fibrosis. Moreover, CRISPR-Cas9 could also produce bespoke bacteria, engineer animal chimeras, and make foods more plentiful and safer. As a result, CRISPR applications in eukaryotic cells, including plant, human, and animal, hold the greatest potential for industry and commercial purposes. It is, therefore, understandable that UC-Berkeley and the Broad Institute would controvert who deserves credit for realizing the CRISPR system in mammalian cells.

Following the issuance of the Broad’s first CRISPR-related patent, Doudna and her collaborators at UC-Berkeley appealed the decision by the patent office. Doudna did so by filing an interference proceeding, which is aimed at determining the priority of multiple patent applications. The United States, and all other countries, utilizes a first-to-file patent system, wherein the right to the grant of a patent for a given invention lies with the first person to file a patent application for protection of that invention, regardless of the date of actual invention. However, at the time the Broad Institute and UC-Berkeley filed their respective applications on CRISPR, the United States followed a first-to-invent system. Invention was defined as (1) conception of the invention and (2) reduction to practice of the invention. An interference proceeding, therefore, determines which party, out of two claimed inventors, is the earlier inventor of the claimed invention. At such a proceeding, the USPTO reviews evidence of conception and reduction to practice.

UC-Berkeley’s position is that Doudna and her team invented the system and that UC-Berkeley’s patents relating to CRISPR overlap the Broad’s patents. Due to this overlap, Berkeley contends that it is the rightful owner of the Broad’s issued patents on CRISPR. In February 2017, the United States Patent Trial and Appeal Board disagreed by ruling that the two patents owned respectively by UC-Berkeley and the Broad Institute applied to different subjects and therefore, do not interfere with one another. UC-Berkeley thereafter appealed that ruling, arguing the wrong standard for obviousness was applied by the Board. Obviousness is a general patentability requirement according to which an invention should be sufficiently inventive, or “non-obvious,” in order to receive patent protection. UC researchers argued it was obvious to test the CRISPR system in mammalian cells and that the Board erred in finding that merely because there was no guarantee the eukaryotic experiment would work, the Broad Institute had satisfied the obviousness standard.

On Monday, the United States Court of Appeal for the Federal Circuit affirmed the Board’s termination of the interference proceeding. The Federal Circuit found that while the two patents at issue do overlap somewhat, the claims subject to the interference proceeding were separately patentable. The decision did not address, however, who invented the specific application of CRISPR-Cas9 in eukaryotic cells nor whether the patents held by the Broad Institute or UC-Berkeley are valid. Indeed, other proceedings may later establish that UC-Berkeley is the actual inventor of the CRISPR-Cas9 system in eukaryotic cells. While the Broad Institute has reflected on this litigation in stating “it is time for all institutions to move beyond litigation,” UC-Berkeley contends it will be “evaluating further litigation options.” Regardless, per the recent result, both parties remain free to exploit their respective patents and applications.

Did You Know?

Rosie the Riveter has been a labor icon since World War II. Indeed, Rosie and her “We Can Do It!” message was used as a symbol of feminism and to boost morale for females working in factories during the war. Artist J. Howard Miller designed the poster in 1943 for Westinghouse Electric, who had hired him to create a series of posters to display to the company’s workers. Interestingly, the name “Rosie” was not originally associated with the picture and instead, the iconic woman was dubbed “Rosie” when the poster was rediscovered in 1982 in the U.S. National Archives.