Please join us on Monday, August 23 at 1:00 pm, when Mark Goldstein will lead a discussion of two recent cases, one addressing whether patents are invalid for claiming abstract ideas and the other about asserting trademark infringement resulting from the use of internet keywords that are the trademarks of another. (Access the cases by clicking the headings.)

PersonalWeb Technologies LLC v. Google LLC, et al., No. 20-1543 (Fed. Cir. 2021)

PersonalWeb asserted patents against Google, Youtube, Facebook, VMWare, Level 3 and EMC.  The patents relate to data-processing systems that assign each data item a substantially unique name that depends on the item’s content – a content-based identifier. The identifier changes when the data item’s content changes. PersonalWeb sued the appellees for patent infringement in the Eastern District of Texas.  After claim construction, the cases were transferred to the Northern District of California. That court stayed the cases pending resolution of several inter partes reviews (“IPRs”) at the Patent Trial and Appeal Board (“Board”), which challenged various claims. In six IPRs filed by EMC and VMware, the Board held all challenged claims unpatentable, finding that using hash-based identifiers for data management was disclosed in the prior art.  On review of the Board’s remand decision, the Federal Circuit reversed the Board’s finding that a particular limitation was inherently disclosed in the prior art, but did not disturb the earlier observation that content-based identifiers were known.

After the stay was lifted, the appellees moved for judgment on the pleadings that the remaining asserted claims were ineligible under 35 U.S.C. § 101.  The district court granted the motion. Plaintiff appealed. Here, the Federal Circuit affirms. To assess patent eligibility, the two-step framework set forth in Mayo and further detailed in Alice is used. At step one, we “determine whether the claims at issue are directed to a patent-ineligible concept” such as an abstract idea. Alice, 573 U.S. at 218. At step two, “we consider the elements of each claim both individually and as an ordered combination to determine whether the additional elements transform the nature of the claim into a patent-eligible application.”

The Federal Circuit concludes the claims are directed to the use of an algorithm-generated content-based identifier to perform the claimed data-management functions, which across the three patents include controlling access to data items (the ’310 patent), retrieving and delivering copies of data items (the ’280 patent), and marking copies of data items for deletion (the ’662 patent). The Federal Circuit holds the functions are mental processes that “can be performed in the human mind” or “using a pencil and paper.” CyberSource Corp. v. Retail Decisions, Inc., 654 F.3d 1366, 1371–72 (Fed. Cir. 2011) (cleaned up) (quoting Parker v. Flook, 437 U.S. 584, 586 (1978)) – a telltale sign of abstraction.  The Federal Circuit determines that “the claims as a whole, then, are directed to a medley of mental processes that, taken together, amount only to a multistep mental process.”

Jim S. Adler, PC v. McNeil Consultants, LLC, No. 20-10936 (5th Cir. 2021)

Adler, the plaintiff, spends significant amounts of money to market his law practice on television, radio, and billboards. Adler has consistently used several trademarks, including JIM ADLER, THE HAMMER, TEXAS HAMMER, and EL MARTILLO TEJANO (collectively, the “Adler marks”).  The defendants do business as Accident Injury Legal Center that operates a lawyer-referral website and call center. Defendants solicit and refer personal injury cases to lawyers with whom they have a referral agreement that provides for compensation for referrals.  Defendants advertise on the internet and purchase Google keyword ads for the Adler marks. This ensures that an advertisement for Defendants’ services appears when a user performs a Google search using an Adler mark as a search term.

Adler filed suit alleging that defendants purchased the Adler marks as keywords for search-engine advertising, and then placed generic advertisements that confused customers as to whether the advertisements belonged to or were affiliated with Adler.  Adler alleged claims for trademark infringement in violation of the Lanham Act and claims under Texas law.

The district court dismissed the complaint for failure to state a claim and denied leave to amend. The Fifth Circuit reversed the remanded for further proceedings. The Fifth Circuit followed Ninth Circuit precedent and McCarthy on Trademarks that in the context of internet searches and search-engine advertising in particular, the critical issue is whether there is consumer confusion. Distraction is insufficient. In regard to the sufficiency of Adler’s trademark infringement claims, the court concluded that whether an advertisement incorporates a trademark that is visible to the consumer is a relevant but not dispositive factor in determining a likelihood of confusion in search-engine advertising cases. Initial interest confusion is evaluated.  In this case, plaintiff’s complaint contains sufficient factual matter, accepted as true, to state a Lanham Act claim that is plausible on its face.

Please RSVP to Join the Discussion

All are welcome to attend. To join the discussion, please RSVP via email to elisham @ socalip.com (remove the spaces, which have been inserted to thwart spammers) by noon the day of the program to obtain a video conference link. The State Bar of California approves this activity for one hour of CLE credit.