In a column late final yr, I highlighted a high-profile instance of a mass counterfeiting case gone flawed, no less than with respect to one of many defendants, in a case involving music star Luke Combs. That case was a trademark motion, however comparable makes use of of what has been known as Schedule A litigation within the design patent context as nicely are being seen. Final week, I discussed the submitting of “two design patent circumstances concentrating on on-line infringement by Chinese language firms promoting to U.S. clients” for example of the varieties of hurt to patent house owners that “drives patent assertion these days.” I additionally teased the likelihood that I might take a more in-depth take a look at these varieties of circumstances in a future column. Aided by an upcoming Harvard Regulation Evaluate paper titled “The Counterfeit Sham” — authored by former interviewee and present Suffolk Regulation professor, Sarah Burstein — now could be nearly as good a time as any to dive deeper into what’s going on with design patent assertions aiming to police on-line gross sales exercise.
To begin, let’s attain settlement on what defines a Schedule A case. As outlined by Burstein, such circumstances include allegations accusing “massive teams of on-line sellers of infringing varied IP rights. In these circumstances, the defendants are often listed not on the face of the criticism itself however on a separate doc, usually labeled ‘Schedule A.’” Typically filed underneath seal, all these complaints have discovered welcoming houses in numerous outstanding district courts, together with NDIL, SDNY, and SDFL. Certainly, the filings I noticed final week have been each filed within the NDIL, a district that Burstein notes is understood to grant to filers “types of reduction which can be presupposed to be extraordinary, similar to ex parte orders freezing the defendants’ property — earlier than the defendants even know they’ve been sued.” It’s unsurprising, due to this fact, that IP house owners are drawn to all these circumstances, contemplating the dearth of viable alternate options — maybe in need of a barrage of Amazon or eBay takedown notices — to deal with infringement by on-line sellers in a commercially significant interval.
Initially, the first use of Schedule A circumstances by IP house owners centered on makes an attempt to halt on-line gross sales of trademark infringing items, a la the Luke Combs fiasco talked about above. However, as Burstein notes, Schedule A circumstances involving allegations of design patent infringement began to look on the scene round 2019. Apparently, that was additionally across the time a legislative push began to offer Customs and Border Patrol brokers the flexibility “to police design patent infringement by permitting CBP to cease imports of infringing merchandise with out the necessity for an ITC exclusion order,” as I discussed in a column discussing the professionals and cons of such an initiative.
With the elevated focus on the time on design patent points, aided partially by Apple’s success in securing a big damages verdict towards Samsung based mostly by itself design patent declare, the turning to Schedule A circumstances as an enforcement mechanism by the design patent plaintiffs bar is comprehensible. What’s much less palatable, nonetheless, is the co-opting of anti-counterfeiting rhetoric by that very same bar — in addition to by some jurists — within the design patent context. In actual fact, Burstein factors out that one NDIL jurist “refers to all Schedule A circumstances as ‘Counterfeit Product Circumstances’” even when no colorable declare of counterfeiting is made — as is commonly the case the place the one infringement complained about is design patent infringement. Furthermore, Burstein’s paper highlights how unfastened use of counterfeiting language has crept into judicial language round Schedule A circumstances in different districts as nicely.
Based on Burstein, this isn’t a innocent phenomenon, since such rhetoric can coloration how jurists deal with Schedule A circumstances even the place no correct counterfeiting declare has been lodged. Making issues worse is the truth that this “mismatch” is made worse by “the truth that the design patent infringement claims introduced in Schedule A circumstances are sometimes not significantly robust — many may even be characterised as frivolous.” a few of the examples she cites in her paper, it’s exhausting to disagree with that sentiment. And having had the prior expertise of defending a shopper accused of design patent infringement in a case the place the plaintiffs preferred to make use of the phrase counterfeit to solid aspersions on my shopper’s merchandise, albeit incorrectly, I can attest to the problem of making an attempt to defuse such an explosive characterization in entrance of a generalist district court docket choose.
That have as protection counsel helps me admire her ideas for an elevated use of particular masters to assist decide infringement on the TRO stage, or for an elevated uptake in frequent sense limits on the variety of defendants in Schedule A circumstances. Most significantly, I commend readers to think about her paper in full, because it lays out a complete case for better judicial scrutiny of Schedule A circumstances within the design patent context, particularly in gentle of the challenges and complexities inherent within the correct adjudication of design patent claims. These challenges and complexities are exhausting to cope with in themselves, even with out the moralizing use of inflammatory language by plaintiffs searching for a fast win.
Finally, it could be sensible to heed Burstein’s warning that sure actors on the design patent plaintiff aspect “appear to be misusing the phrase ‘counterfeit’ intentionally, to evoke the specter of harmful and intentional malfeasance” the place none exists. The motivation for them to take action could also be current, together with no less than some rewards for doing so at this stage. As a result of that technique is shortsighted, the time is now to include one of these habits, because it does no long-term favors for IP house owners and could also be inflicting fast hurt to alleged infringers. In brief, it’s time we obtained design patent circumstances again on schedule, with out the hyped-up prices of counterfeiting.
Please be happy to ship feedback or inquiries to me at gkroub@kskiplaw.com or through Twitter: @gkroub. Any subject ideas or ideas are most welcome.
Gaston Kroub lives in Brooklyn and is a founding associate of Kroub, Silbersher & Kolmykov PLLC, an mental property litigation boutique, and Markman Advisors LLC, a number one consultancy on patent points for the funding group. Gaston’s follow focuses on mental property litigation and associated counseling, with a robust concentrate on patent issues. You may attain him at gkroub@kskiplaw.com or comply with him on Twitter: @gkroub.
