Green IP Litigation

On this day after Earth Day, are you considering advertising the environmental benefits of your product? Is your competitor already doing it, and perhaps overselling the environmental benefits of its product? Are you considering a trademark that includes words such as “green” or “eco” or “enviro?” Do you have an invention that promises environmental benefits?

If you said yes to any of those, know that the word green when used to mean “good for the environment” has a many shades as the color green. That uncertainty, of course, makes litigation concerning the proper use of the word green and related terms increasingly likely.

The USPTO is struggling with what it means to be “green.” Reports are that trademark applications including words associated with the environment are up, and the USPTO is giving such applications increased scrutiny. As green and other terms relating to the environment are included in more trademarks, infringement litigation is more likely, as are office actions and litigation involving allegations of misuse of such terms.

On the patent side, the USPTO has sought to encourage development of environmentally-friendly technology by fast-tracking “green” patent applications. At least one report, however, suggests that restrictive interpretations concerning what types of inventions qualify have rendered the program less effective than many hoped. USPTO representatives have been speaking about the program at a number of conferences, but I have been unable to attend. I’d love to hear from anyone who has heard the USPTO’s view on this concern. I wonder what might happen when a business tries to advertise the green benefits of an invention that is rejected for the USPTO program. Should that rejection in any way inform the decision as to whether such green advertising is false?

False advertising litigation should be the largest byproduct of the green ambiguity. By many accounts, assertions of environmental benefits, both legitimate and illegitimate, are up. “Greenwashing”, the practice of falsely advertising products as having environmental benefits is bound to be an area of increased litigation for business, consumers and the FTC. The Seven Sins of Greenwashing offers a method of analyzing so-called “green” advertising that could lead to some interesting litigation strategies.

The current issue of the John Marshall Law School Intellectual Property Law Review offers a number of interesting articles concerning these issues. In particular, Maureen Gorman’s article What Does it Mean to Be Green: A Short Analysis of Emerging IP Issues in "Green" Marketing and Eric Lane’s Consumer Protection in the Eco-Mark Era: A Preliminary Survey and Assessment of Anti-Greenwashing Activity and Eco-Mark Enforcement, offer much food for thought.
 

A Faster End to Frivolous Copyright Infringement Cases?

Defendants in copyright infringement cases may find comfort in the Second Circuit’s recent decision in Peter F. Gaito Architecture v. Simone Development Corp. The Second Circuit blessed what has become an increasingly common practice in the Southern District of New York: that of dismissing copyright infringement cases in which the works are obviously dissimilar at the pleading stage, rather than requiring a trial or motion for summary judgment.

The case involved alleged infringement of an architectural design. The Second Circuit affirmed the district court’s decision dismissing the case based on the court’s comparison of the two works at issue, holding that such dismissal was proper because the absence of similarities in copyright protected elements made it impossible for the plaintiff to allege “substantial similarity” between the two.

Notwithstanding prior case law endorsing this approach, comparison of the works at issue on a motion to dismiss previously seemed to be of questionable legitimacy. The Second Circuit itself acknowledged that the question of substantial similarity is inescapably a question of fact. As a result, even where the case for infringement seemed weak, it seemed the more prudent course for defendants to answer the complaint and then seek summary judgment rather than moving to dismiss under Rule 12(b)(6).

Now, defense counsel should consider very seriously moving to dismiss immediately. The potential litigation cost savings for defendants could be significant. Inevitably, on the other hand, the process will be abused and defendants in cases that really do pose issues of fact will make frivolous motions to dismiss.

An odd aspect of the decision is the district court’s finding, repeated by the Court of Appeals, that certain of the similarities identified by the plaintiff concerned “generalized concepts and ideas that are common to countless other high-rise residential developments.” It is unquestionably proper to exclude ideas from the comparison because they are not protected by copyright, but then it should not matter whether such ideas are common. So why the reference to commonality? And how would one know at the pleading stage, and without expert testimony whether certain elements are “common to countless other high-rise residential developments?” A judge living in New York City may have significant exposure to urban architecture, but the determination of commonality would seem to require evidentiary support.
 

IP Counsel Must Communicate With Marketing and Manufacturing Personnel

A recent decision from the Federal Circuit underscores the need for IP counsel to communicate with the company’s manufacturing and marketing staff. IP counsel, and company management, should be aware of the importance of marking patented products properly. Generally, it takes little prodding or persuasion to insure that patented products are identified with the patent number; everyone involved can easily see value in that, not only in terms of preserving the right to seek damages, but in terms of intimidating competitors and impressing consumers.

But what about when the patent expires? We all know we should not be marking our product in a way that is deceptive, but it typically doesn’t seem so urgent to adjust molds, presses or packaging to delete the patent information. So what if we make a few runs marked with the expired patent?

Forest Group Inc. v. Bon Tool Co., 590 F.3d 1295 (Fed. Cir. 2009) cautions that we should be more diligent. In that case, the Federal Circuit held that the penalty for intentional false marking, up to $500, applies on a per product basis, as opposed to a per run basis. So if you are making widgets and run a single post-patent production of 100,000, your potential exposure is $50,000,000.

Bear in mind that imposition of false marking penalties requires actual intent to deceive, so demonstrably honest mistakes should not result in punishment.  Also, courts have discretion to determine the amount of the per product penalty, so an award could be significantly less than $500 per. The Federal Circuit itself suggested in the Forest Group case that in cases involving large runs of inexpensive products, the penalty could be limited to fractions of a penny per article. And, in the Pequignot v. Solo Cup case, although the court held that marking with an expired patent constituted false marking subject to penalty, the court ultimately exonerated the defendant, holding that a patent owner that used production machinery that was expensive to re-tool and, for that reason and in consultation with patent counsel, did not change its markings until it changed its machinery, was not liable for intentional false marking on runs it made post-patent term but pre-purchase of new machinery.

On the other hand, there are reports of emergence of a new type of patent troll, who seeks out products marked with expired patents and then sues to collect half the penalty (the other half goes to the government). That raises the level of risk for owners of expired patents. It is possible the Federal Circuit could disagree with the Virginia court’s analysis and apply a less lenient standard to patent owners that mark with expired patents. Moreover, subsequent case law could condemn the advice Solo received from its patent counsel, removing reliance on counsel’s advice as a justification for less than prompt re-marking.

Rather than putting your company at the mercy of an opportunistic plaintiff and ultimately a court, if your patent expires, the safest course may be to change your markings immediately. If that is impossible or highly impractical, one would be wise to document the reasons and weigh carefully the potential litigation costs against the re-tooling costs.