Inventor Loses Spider-Man Royalties

Marvel Enterprises is no longer obligated to make royalty payments to the inventor of a Spider-Man toy called the Web Blaster. The Ninth Circuit Court of Appeals ruled that Stephen Kimble’s licensing agreement was unenforceable beyond the expiration date of the underlying patent under the controversial precedent established by the U.S. Supreme Court in Brulotte v. Thys Co.

Around 1990, Kimble invented and obtained a patent for a Spider-Man toy that allowed a child “role play” as Spider-Man by shooting foam string. The patent expired on May 25, 2010.

While the patent application was pending, Kimble approached Marvel about the toy and other ideas. A company executive told him that he would be compensated if Marvel used any of his ideas. Although the company ultimately informed Kimble it was not interested, Marvel began manufacturing a similar Spider-Man role-playing toy.

Kimble filed suit for patent infringement and breach of contract. While the infringement claim was dismissed, Kimble eventually reached a settlement with Marvel under which the company agreed to purchase the patent and both parties agreed to dismiss all pending appeals. Under the terms of the settlement agreement, Marvel agreed to pay Kimble $516,000 and three percent of net product sales of the toy.

In 2006, the parties got into a disagreement regarding the calculation of royalties, and Kimble filed another breach of contract lawsuit. In response, Marvel argued that it was no longer obligated to pay Kimble after the patent expired.

The Ninth Circuit ultimately agreed. It held that “a so-called ‘hybrid’ licensing agreement encompassing inseparable patent and non-patent rights is unenforceable beyond the expiration date of the underlying patent, unless the agreement provides a discounted rate for the non-patent rights or some other clear indication that the royalty at issue was in no way subject to patent leverage.”

As explained in the opinion, Brulotte has been interpreted to require that any contract requiring royalty payments for an invention either after a patent expires or when it fails to issue cannot be enforced unless the contract provides a discount from the alternative, patent-protected rate. While the court noted that it disagreed with the rationale of the rule, it also recognized that “we are bound by Supreme Court authority and the strong interest in maintaining national uniformity on patent law issues.” Accordingly, the panel begrudgingly applied the precedent.

The Ninth Circuit also rejected Kimble’s argument that Brulotte was inapplicable because the agreement discriminated between patents and non-patent rights. “We cannot agree because the agreement plainly involved one royalty rate for both patent and Web Blaster rights, with no discount or other clear indication that the Web Blaster royalties were not subject to patent leverage,” the court concluded.

How Can I Help?

If you, or someone you know, need any help with Intellectual Property issues, from filing a patent, trademark or copyright, or just need advice regarding how best to protect your inventions, ideas or your brand, please contact me for a free 30 minute consultation at nvantreeck@usip.com or call TOLL FREE at 1-855-UR IDEAS (1-855-874-3327) and ask for Norman.

– Ex astris, scientia –

I am and avid amateur astronomer and intellectual property attorney in Pasadena, California and I am a Rising Star as rated by Super Lawyers Magazine.  As a former Chief Petty Officer in the U.S. Navy, I am a proud member of the Armed Service Committee of the Los Angeles County Bar Association working to aid all active duty and veterans in our communities. Connect with me on Google +

Norman

USPTO Announces Access to Chinese Patent Documentation Via New Global Patent Search Network

In contrast to yesterday’s story, the U.S. Patent and Trademark Office recently announced the launch of the Global Patent Search Network. Accessible via the USPTO website, the new database allows users to search and retrieve Chinese patent documentation.

According to the USPTO, the data available includes both full text Chinese patents and English machine translations. Users can currently search documents including published applications, granted patents and utility models from 2008 to 2011. The USPTO has indiacted the network will periodically be updated with more current data.

A recent blog post touted the benefits of the Global Search patent Network. “This new search tool delivers to the public, as well as our patent examiners, an additional source of foreign patent collections. Furthermore, the immediate availability of English machine translations will effectively address the language barrier and allow for quick analysis of the relevancy of the prior art while reducing the need for costly human translations. Machine translation technology can sometimes generate awkward wording, but it provides an excellent way to determine the gist of the information in a foreign patent.”

The initial launch of the Global Patent Search Network features only Chinese patent documentation. However, the USPTO plans to incorporate additional foreign patent collections in the future. Interestingly, the Global Patent Search Network is the first patent-related initiative to use cloud technology.

How Can I Help?

If you, or someone you know, need any help with Intellectual Property issues, from filing a patent, trademark or copyright, or just need advice regarding how best to protect your inventions, ideas or your brand, please contact me for a free 30 minute consultation at nvantreeck@usip.com or call TOLL FREE at 1-855-UR IDEAS (1-855-874-3327) and ask for Norman.

– Ex astris, scientia –

I am and avid amateur astronomer and intellectual property attorney in Pasadena, California and I am a Rising Star as rated by Super Lawyers Magazine.  As a former Chief Petty Officer in the U.S. Navy, I am a proud member of the Armed Service Committee of the Los Angeles County Bar Association working to aid all active duty and veterans in our communities. Connect with me on Google +

Norman

Chinese Wind Company Faces Allegations of Trade Secret Theft.

The theft of U.S. intellectual property has always been a hot button topic.  According to the U.S. International Trade Commission, Chinese IP theft cost U.S. companies nearly $50 billion in 2009.

The U.S. government has adopted a stronger stance against IP theft by other countries, including China.  In June, the Department of Justice charged Chinese wind turbine maker Sinovel Wind Group Co. and two of its employees with stealing trade secrets from a U.S. company, American Superconductor Corp. (AMSC).

According to the Department of Justice, AMSC developed and sold software and equipment to regulate the flow of electricity from wind turbines to electrical grids, and it considered the software and equipment to be trade secrets and proprietary information. Meanwhile, Sinovel purchased software and equipment from AMSC for the wind turbines that Sinovel manufactured, sold and serviced.

In 2011, Sinovel recruited AMSC employee, Dejan Karabasevic, to leave the company and join Sinovel. The Chinese company also allegedly offered him $1.7 million to secretly copy intellectual property from the AMSC computer system. Using the stolen computer code, Sinovel sold four pirated turbines to customers in the U.S., “cheating AMSC out of more than $800 million,” according to the indictment.

An Austrian court has already convicted Karabasevic, and sentenced him to a year in jail and two years of probation for his part in this international trade secret theft.

Since the United States obtained indictments in late June, Sinovel is fighting back, claiming that the service of the summons were faulty and that the United States improperly (and ineffectively) served Sinovel’s U.S.-based subsidiary, Sinovel Wind Group (USA) Co., Ltd., but not its Chinese parent, Sinovel Wind Group Co., Ltd.  Sinovel argues that it is not subject to the United States’ summons power as a Chinese corporation and that service of Sinovel USA (dissolved in early July 2013) is not proper under Federal Rule of Civil Procedure 4.

On September 6, 2013, the United States filed its response in opposition to the motion to quash, arguing that Sinovel USA is the alter ego of the parent corporation.  At the heart of this argument, the United States is claiming that Sinovel’s recent closure of its US subsidiary was made to avoid service of process and a direct result of the United States’ case against Sinovel.

Also, this past week the China Securities Regulatory Commission (CSRC) began looking into security market regulation violations by Sinovel.

I will be watching this case and reporting on how the final disposition of this could affect your business interests when working with foreign firms.

How Can I Help?

If you, or someone you know, need any help with Intellectual Property issues, from filing a patent, trademark or copyright, or just need advice regarding how best to protect your inventions, ideas or your brand, please contact me for a free 30 minute consultation at nvantreeck@usip.com or call TOLL FREE at 1-855-UR IDEAS (1-855-874-3327) and ask for Norman.

– Ex astris, scientia –

I am and avid amateur astronomer and intellectual property attorney in Pasadena, California and I am a Rising Star as rated by Super Lawyers Magazine.  As a former Chief Petty Officer in the U.S. Navy, I am a proud member of the Armed Service Committee of the Los Angeles County Bar Association working to aid all active duty and veterans in our communities. Connect with me on Google +

Norman

Cracking Down on IP Scammers.

Trademark and patent holders are frequently targeted by scams, often in the form of official-looking correspondence. Some companies promise to protect your patent in foreign countries, while others claims that you have an unpaid invoice for trademark registration services.  I have made many blog posts warning of these “notifications.”

While the services offered may sometimes be legitimate, the mailings are misleading because they use language, formatting and other identifying features that suggest the sender is an official government agency.  I frequently field calls from concerned clients who have received unsolicited offers for patent, copyright and trademark services.

The U.S. Patent and Trademark Office and other industry groups frequently issue warnings about these fraudulent solicitations; however, new scams seem to pop up every few months. To put these companies out of business for good, a New York intellectual property law firm is pursuing legal action in federal court.

The suit against Patent & Trademark Agency LLC and its principal owner, Armens Organesjans, alleges that the company seeks to confuse trademark owners into purchasing services under the false color of authority. The claims include unfair competition, false advertising and tortious interference with prospective economic relations.

As highlighted in the complaint, Patent & Trademark Agency LLC’s website includes a statement that they are not lawyers and do not provide legal advice; however, its Terms, Conditions and Use Agreement state the opposite: “By accepting these terms you specifically and irrevocably authorize [Patent & Trademark Agency] to conduct negotiations and act on your behalf with any party needed in order to renew or register your trademark.”

The complaint further alleges that the company falsely states that “the Patent & Trademark Agency is the nation’s premier trademark registration and renewal service.” In reality, the USPTO lists the company among entities that have been the subject of complaints regarding fraudulent solicitations.

Last year, the same New York IP firm sued USA Trademark Enterprises Inc. on similar grounds. As a result of the lawsuit, the company was permanently barred from engaging in intellectual property-related activities in the United States.

The Attorney General of Vermont also sued Patent & Trademark Agency LLC to protect its citizens from these scams.

If you believe that you have been a target of this type of scam, please report it to the AG of your state and to your IP attorney.  You can also file a complaint against the scammer on the USPTO web site here.

How Can I Help?

If you, or someone you know, need any help with Intellectual Property issues, from filing a patent, trademark or copyright, or just need advice regarding how best to protect your inventions, ideas or your brand, please contact me for a free 30 minute consultation at nvantreeck@usip.com or call TOLL FREE at 1-855-UR IDEAS (1-855-874-3327) and ask for Norman.

– Ex astris, scientia –

I am and avid amateur astronomer and intellectual property attorney in Pasadena, California and I am a Rising Star as rated by Super Lawyers Magazine.  As a former Chief Petty Officer in the U.S. Navy, I am a proud member of the Armed Service Committee of the Los Angeles County Bar Association working to aid all active duty and veterans in our communities. Connect with me on Google +

Norman

A Puppet Show With A Purpose.

As the world’s largest video-sharing service, YouTube(r) faces a daily battle of keeping infringing content off its website. The site uses a variety of tools to educate users about what is permissible under copyright law and recently added puppets to the mix.

Under the Digital Millennium Copyright Act (DMCA), YouTube cannot be held liable for the copyright violations of its users, so long as it promptly removes the content upon receiving a takedown notice from a rights holder. However, it is still in the company’s best interests to develop ways to combat copyright infringement.

For example, users who are subject to a valid removal request receive a “strike” against their account. Receiving a copyright strike can result in limited access to certain YouTube Features and requires users to complete YouTube’s Copyright School. If a user receives three copyright strikes, the account is suspended and all the videos uploaded are removed.

In addition to the standard procedures under the DCMA, YouTube uses video fingerprinting technology, called Content ID. It allows rights holders to identify user-uploaded videos comprised entirely or partially of their content. In addition, the program allows the rights holder to inform YouTube in advance what they want to happen when those videos are found. Options include monetizing the videos, collecting statistics, and blocking them from YouTube altogether.

The latest addition is a video, entitled “YouTube Copyright Basics.” It features puppets named Mario and Fafa from the site’s Glove and Boots channel. With the help of a copyright attorney, they explain topics including copyright basics, the process for filing a copyright complaint, content ID takedowns, and fair use.

How Can I Help?

If you, or someone you know, need any help with Intellectual Property issues, from filing a patent, trademark or copyright, or just need advice regarding how best to protect your inventions, ideas or your brand, please contact me for a free 30 minute consultation at nvantreeck@usip.com or call TOLL FREE at 1-855-UR IDEAS (1-855-874-3327) and ask for Norman.

– Ex astris, scientia –

I am and avid amateur astronomer and intellectual property attorney in Pasadena, California and I am a Rising Star as rated by Super Lawyers Magazine.  As a former Chief Petty Officer in the U.S. Navy, I am a proud member of the Armed Service Committee of the Los Angeles County Bar Association working to aid all active duty and veterans in our communities. Connect with me on Google +

Norman

Patent Application Fees Can Qualify for the Research and Development Tax Credit.

The federal research and experimentation tax credit (referred to as both an “R&D credit” or “R&E credit”) can be a valuable tool for individuals and businesses that conduct research and development, including the invention of patented products and processes. It provides a 20 percent credit on selected research expenditures.

In order to qualify for the R&D credit, research activities must satisfy a four-part test established by Congress:

  • Permitted Purpose: The goal of the activity must be to create a new or improve an existing business component in terms of functionality, performance, reliability, or quality. A business component is defined as any product, process, technique, invention, formula, or computer software that the taxpayer intends to hold for sale, lease, license, or actual use in the taxpayer’s trade or business.
  • Elimination of Uncertainty: A degree of uncertainty must exist concerning the development or improvement of the business component. Uncertainty exists if the information available to the taxpayer does not establish the capability of development or improvement, method of development or improvement, or the appropriateness of the business component’s design.
  • Process of Experimentation: The taxpayer must undertake a process of experimentation designed to evaluate one or more alternatives to achieve a result.
  • Technological in Nature: The experimental process must fundamentally rely on principles of the “hard sciences, including physical, biological sciences, engineering, or computer sciences.

As detailed by the Journal of Accountancy, a number of expenses can qualify for the R&D tax credit, including wages, supplies and contract research expenses. For instance, in-house wages attributable to qualified research and 65 percent of vendor expenses related to design and testing services are includable.

In addition, the tax credit has been interpreted to include not only developing prototypes or models, but also applying for patents. Accordingly, inventors may be able to use the tax credit to offset the increased application fees now required by the U.S. Patent and Trademark Office.

How Can I Help?

If you, or someone you know, need any help with Intellectual Property issues, from filing a patent, trademark or copyright, or just need advice regarding how best to protect your inventions, ideas or your brand, please contact me for a free 30 minute consultation at nvantreeck@usip.com or call TOLL FREE at 1-855-UR IDEAS (1-855-874-3327) and ask for Norman.

– Ex astris, scientia –

I am and avid amateur astronomer and intellectual property attorney in Pasadena, California and I am a Rising Star as rated by Super Lawyers Magazine.  As a former Chief Petty Officer in the U.S. Navy, I am a proud member of the Armed Service Committee of the Los Angeles County Bar Association working to aid all active duty and veterans in our communities. Connect with me on Google +

Norman