By: Cristina Carapezza
Federal Circuit Tackles Common Service Mark Question
For the first time, the Federal Circuit addressed a common question in trademark law of what constitutes use in commerce of a service mark. The Federal Circuit ruled in Couture v. Playdom, Inc., No. 2014-1480 (Fed. Cir. Mar. 2, 2015), that advertising or offering of a service alone is not enough to prove use in commerce. The services offered in connection with the mark must actually be provided before a registration can be granted. David Couture filed an application in 2008 to register the service mark PLAYDOM claiming actual use, and the mark was registered in January 2009. In February 2009, Playdom Inc., a company acquired by the Walt Disney Company, filed an application to register the identical mark. Noting that Couture did not acquire his first customer and actually perform any of the services he applied for until 2010, the Federal Circuit affirmed cancellation of Couture’s registration.
Federal Circuit Vacates $101 Million Damages Award in Medtronic Patent Case
The Federal Circuit vacated a $101 million damage award to Medtronic Plc and ordered a new trial to determine damages. The three-judge appellate panel in Warsaw Orthopedic, Inc. v. Nuvasive, Inc., No. 2013-1576 (Fed. Cir. Mar. 2, 2015) affirmed that NuVasive Inc.’s oversized spinal implants and products for minimally invasive spinal surgeries infringed on patents owned by Warsaw Orthopedic Inc., a unit of medical technology company Medtronic Plc. The Federal Circuit said that Warsaw is entitled to royalty sufficient to compensate for the value of the patented technology but was not entitled to recover damages for lost profits and ongoing royalties. The appellate court also upheld that Warsaw infringed one of NuVasive’s patents.
USDA Not Liable for $10 Million to Subcontractor Building Wireless Broadband Networks
The Federal Circuit affirmed that the U.S. Department of Agriculture (USDA) is not liable for $10 million, the balance owed to construction subcontractor G4S Technology LLC after prime contractor Open Range Communications Inc. went bankrupt. The USDA Rural Utility Service (RUS) agreed to loan Open Range $267 million to finance construction of wireless broadband networks in 540 markets. Open Range told RUS that it would use third-party vendors, but the loan agreement did not provide for direct payment from RUS to third-party vendors. GS4 alleged that the loan agreement’s provision that Open Range maintain a pledged deposit account (PDA) established the government’s intent to ensure subcontractors were paid. However, the Federal Circuit in G4S Technology LLC, v. United States, No. 2014-5078 (Fed. Cir. Mar. 6, 2015), found that the PDA was required to assist the government in reviewing and approving project costs rather than to serve as a mechanism to guarantee that subcontractors were paid.