Policing Your Trademark

After acquiring a trademark registration, you may feel that you have done all there needs to be done to protect the name of your company or brand. While a trademark registration affords significant protection, it is not always enough to combat trademark infringement. In certain circumstances, if enough third-parties in the marketplace begin using a mark confusingly similar to yours, your mark may be weakened and consumers may be less likely to be confused by the infringing third-party use. Hence, remaining vigilant in the marketplace and taking swift action against infringing use is an important consideration for your trademark portfolio. As discussed below, there are a couple of efficient ways to accomplish this goal.

New USPTO Applications

A relatively easy way to keep an eye on third-parties that may be infringing your mark is to periodically review new applications submitted to the United States Patent and Trademark Office (USPTO) for marks that have words or phrases similar to your registered mark. There are numerous “watch” services, including those used by this firm, that can review these applications for you and alert you when a potentially infringing trademark application is submitted to the USPTO. Depending upon the circumstances, you may then find it appropriate to oppose the trademark application through a formal USPTO proceeding and/or send a demand letter to the applicant to cease the infringing use.

Under the Radar

Often, however, it is difficult to root out third-parties infringing your mark because some entities may not seek a trademark registration or make their presence known on the Internet. These third-parties may, however, be using your mark or a confusingly similar mark in their business names or brand names. A periodic search for such businesses through various nationwide business directories and government registries (available in report form from the vendors mentioned above) can quickly identify any such third-parties, and help you investigate whether further action against those third-parties is necessary. Through your vigilance, you may discover that a business operating just a few streets away has adopted your trademark, and that it may even be luring away your customers.

Action Plan

While periodically reviewing and protecting your intellectual property portfolio may not be on the top of your list, it should be. Your trademark can be a valuable asset, and perhaps even the only thing that separates you from your competitors in the marketplace. Take the time to ensure that your trademark is not being infringed, and, if it is, be prudent and take swift action to stem any such infringement.

-- Anuj Desai, Esq.

Not If, But How

Arnall Golden Gregory, LLP has significant experience in trademark law. Do not hesitate to contact us if we can be of help to you.

Please visit our web site for more information, www.agg.com.

Gene Patenting Decision: Undesirable Result or Pointless Ban?

The gene patenting case by the ACLU and patient groups against biotech company Myriad Genetics is motivated in large part by a desire to have knowledge and use of discoveries free and open to all rather than owned and locked up by single patent holders. While this attractive aspiration has caught favor with most of the public, it conflicts with market realities of biomedical assays and therapies. The reality is that most new biomedical assays and therapies would not be developed unless the developer has some assurance that their (usually large) investment in development can be compensated by profits down the line. While the facts around development of any given assay or drug are complicated and will differ, two likely scenarios illustrate why the ACLU’s anti-gene patent position will either be counterproductive to development of biomedical assays and therapies (the Undesirable Result Scenario) or will be ineffective at producing free and open use of gene discoveries (the Pointless Ban Scenario).

In the Undesirable Result Scenario, assume that patent protection on a gene is essential for an assay developer to recoup development costs. In this scenario, the developer could spend millions of dollars developing and gaining approval of an assay, but without patent protection, could not prevent competitors from swooping in and simply implementing the developer’s assay with little development costs. Undercutting the developer’s price (due to lower investment), the competitors can capture the market and keep the developer from making back their development costs. In the real world, developers that see this scenario before them will simply refrain from developing an assay when they do not have effective patent protection. This effect, repeated many times over many years will ultimately limit the development of many new assays and therapies that depend on gene patents. This is the undesirable result.

In the Pointless Ban Scenario, assume that an assay can be protected by patenting some aspect other than the gene involved. In this scenario, the developer would spend millions of dollars developing and gaining approval of an assay safe in the knowledge that it could prevent competitors from copying the developer’s assay. The developer’s assay would be protected by a non-gene patent. But then a prime goal of the gene patent ban would not be realized, since the assay would still be controlled by the patent-holding developer. Although the first scenario shows that this is a desirable result in order to promote assay development, it renders a ban on gene patenting pointless.

Business and Legal Communities Supportive of Competition Law Changes

Readers of our Competition Law Blog know we've been following the progress of HB 173, sea change legislation that would make enforcement of non-competition and non-solicitation agreements easier. One of our white papers looks at some ways HB 173 would accomplish that, and in the process, help attract new business to the state. CityBiz just picked up this story, referencing the white paper and some testimony we recently offered in support of the new law. http://atlanta.citybizlist.com/yourcitybiznews/detail.aspx?id=67871.

So where does the law stand? With HB 173 signed into law last year, the legislative process is again moving forward. The Georgia legislature must first approve a constitutional amendment that would enable, and make effective, HB 173. Once both chambers approve that amendment -- and based upon a House hearing last week, there appears to be widespread support -- it goes to the ballot. In November, Georgians will then have an opportunity to vote by referendum.

We hope you'll assist in raising awareness and generating discussion about an important change to our state's competitive legal framework. For the full white paper, go to http://tinyurl.com/ybwd723.

Corporate Advertising: Conducting Your Own Due Diligence Is A Must

Without fail, one of the first responses from companies accused by competitors of false advertising is that “we didn’t know,” and it may well be that the advertising information came from a reputable source. But is the “innocent mistake” defense viable in false advertising litigation? Although it seems only fair that a company taking reasonable steps to verify information in its advertisements would be in the clear, federal advertising law holds companies strictly liable for false advertising. In other words, there is no good faith or innocent mistake defense to underlying liability.

We recently found a “juicy” illustration of the point. Pom Wonderful, the leading marketer of pomegranate juice, had noticed one of its smaller competitors using Pom’s own studies to market competing juice. With this competitor on the radar, Pom also noticed that the company, California-based Purely Juice, was marketing “100% pomegranate juice,” with “no added sugar.” Pom’s testing proved that claim incorrect, and after negotiation failed, Pom sued in federal court.

Purely Juice, it turns out, had been using a broker to find juice suppliers. The broker vouched for its suppliers, but, despite those assurances, the juice Purely Juice received was adulterated, so that the “100% pomegranate” and “no sugar” claims were false. Purely Juice claimed it had no idea of the adulteration, and that it took the word of its broker about the reliability of the juice supply.

Was that approach successful? Just last week, a court of appeals affirmed a trial award against Purely Juice of approximately $1.2 million in damages, disgorgement of more than $300,000 in its profits, and attorney’s fees of more than $620,000. One of the legal principles that resulted in the award is that a company is liable for false advertising regardless of its knowledge. Not only that, an officer or director is personally liable for false advertising in which she participates or that she directs, so the president of Purely Juice, also a defendant, shared in the liability.

It did not help Purely Juice that the trial court also found it “knew or should have known” about the shaky credentials and processes of its suppliers and therefore, of the adulteration. In that market, the limited supply of pomegranate juice means that many suppliers mix in other juice, and add sugar. Had the company conducted and abided by its own testing, and done better due diligence, one wonders if it could have avoided the litigation entirely.

For our own marketing teams, the lesson is clear. The advertising “buck” stops at the company’s door, and assurances from third parties about the quality or characteristics of supplied products, even from trusted suppliers or business partners, will not insulate the company from liability for false advertising. Thorough internal due diligence is a must.


--Andrew Flake

Andrew B. Flake is a partner in the Litigation Group at Arnall Golden Gregory LLP (andrew.flake@agg.com). Our firm serves the business needs of growing public and private companies, helping clients turn legal challenges into business opportunities. We don't just tell you if something is possible, we show you how to make it happen. Please visit our website for more information, www.agg.com.

Are Private E-mails Sent From Work Privileged?

The new year brings a recent ruling by a federal court judge, which raises a question as to whether employers have full access to their employees' workplace email correspondence. In light of this decision, employers should ensure that their employee policies expressly address the parameters of personal use for workplace computers and networks.

The Decision

A federal court judge in the District of Columbia has ruled that a federal prosecutor who sent emails to his attorney using workplace computers had the right to keep those emails concealed because they were privileged. This decision is novel because courts generally rule that employees have no expectation of privacy as to personal information on workplace computers and networks. In this case, however, the judge ruled in favor of finding a right of privacy because the federal prosecutor was allowed by his employer, the Department of Justice, to use workplace computers for personal matters, creating a reasonable expectation of privacy.

What This Means For You

If a company allows employees, whether in practice or through a formal policy, to use workplace computers for personal matters, an employee may be able to successfully keep confidential email correspondence and electronic files of a personal nature in the event of a dispute. To avoid this result, companies should strive to audit their formal policies and their practical application to ensure that employees are expressly prohibited from using workplace computers for personal matters. While the decision discussed above is not binding everywhere or the majority view at the moment, it may be indicative of a trend favoring employees and their expectation of privacy.

-- Anuj Desai, Esq.

Not If, But How

Arnall Golden Gregory, LLP has significant experience in drafting and auditing human resource policies and agreements, including those concerning employee use of workplace infrastructure. Do not hesitate to contact us if we can be of help to you.

Please visit our web site for more information, www.agg.com. Also, we thank you for reading our blog and wish you a very happy new year.

The FTC Revises Its Guidance For Advertising Through Blogs, Endorsements, Testimonials, And More

If you advertise through blogs, testimonials, or celebrity endorsements, the Federal Trade Commission’s (“FTC”) recent revisions to its official guidance (the first revisions since 1980) on that topic are a must read. The revised guidance makes it clear that both the advertiser and endorser may be held liable under the FTC Act for false or unsubstantiated claims or for failure to disclose material connections between the advertiser and endorser.

Consumers today greatly rely upon advertising that appears as journalism, like blogs, or as anecdotal endorsements or testimonials, including celebrity advertisements. Hence, businesses have a greater imperative to fully disclose any media that is, in reality, advertising, as well as any material connections between a business and bloggers or endorsers of its products and services.

A Summary Of Revisions To The Guides

The revised guidance asks businesses to disclose “material connections” between advertisers and endorsers, especially when such connections may not be expected by the consumer. So, if your favorite radio talk-show host raves about a new spinal decompression therapy that helps his back pain, but never discloses that he gets this therapy for free in exchange for “talking it up” on his show, both the therapy provider (advertiser) and the talk show host (endorser) could end up being in trouble with the FTC, along with being held liable under the FTC Act.

Similarly, when a blogger reviews a product or service in exchange for cash or in-kind payment, it is considered to be an endorsement. The FTC requires that the blogger disclose any relationship with the seller of the product or service, and payment received, in the blog post. With many consumers browsing online reviews of products and services before making a purchase, the FTC’s revised guidance is aimed at blogs that may be perceived by consumers as a source of independent opinion on a particular product or service, but are, in reality, endorsements paid for by the seller of the product or service.

Also, a business may refer to research findings in its advertising, and this often occurs with health and nutrition products and services. If that business sponsored the research, it must disclose this material connection in the advertising. On a related note, businesses can no longer get away with featuring the experience of a consumer, for example of losing 50 pounds with a weight loss product, and disclaim that “results are not typical.” The FTC now advises that businesses clearly disclose the results that consumers can generally expect.

What This Means For You

As a practical matter, any business looking to reach consumers through blogs, viral videos, testimonials, or other unconventional forms of advertising should take steps to ensure that consumers understand that the media is really an advertisement and to ensure that the advertising clearly conveys the nature of the business’s relationship with the advertising source.

-- Anuj Desai, Esq.

Not if, but how

Arnall Golden Gregory, LLP has significant experience in the area of marketing and promotions, including evaluating advertisements and advertising-related disputes. Do not hesitate to contact us if we can be of help to you.

Please visit our web site for more information, www.agg.com.

A copy of the FTC’s revised Guides Concerning the Use of Endorsements and Testimonials in Advertising, with illustrations of applications of the revised guidance, is available at www.ftc.gov.

Senate Moves to Clarify Tension between Patent and Antitrust Law

Patent law limits competition, keeping prices high in order to foster innovation. Antitrust law promotes competition, keeping prices low to benefit consumers. The following “reverse payment” scenario illustrates the tension between the two:

Branded Drug Company sells a patented drug. Generic Drug Company files an application to bring a competing generic drug to market. Branded sues Generic for patent infringement. A settlement is reached where Branded pays Generic to delay entering the market, a so-called “reverse payment.” Branded maintains its patent, and continues to monopolize the market for the patented drug.

The question at the heart of the reverse payment scenario is whether drug patents are truly property. According to both pharmaceutical companies and the U.S. Court of Appeals for the Eleventh Circuit, less competition and higher prices are the natural result of the “permissible monopoly” created by patents, and thus there is nothing wrong with reverse payments. Lawyers for the federal government disagree, arguing that patents are not true property rights, but rather a right to “try to exclude.” The Federal Trade Commission (FTC) has thus determined that “collusion by pharmaceutical manufacturers is contrary to free competition, to the interests of consumers, and to the principles underlying antitrust law.” The Department of Justice (DOJ), which did not oppose the settlements during the Bush administration, now considers these deals to be straightforward violations of antitrust law, and thus “presumptively unlawful.”

Regardless of who is correct, the decade long battle reached an important point on October 13th, when the Senate Judiciary Committee voted 12 to 7 to approve its draft legislation, the Preserve Access to Affordable Generics Act of 2009. The bill makes it unlawful for a person, in connection with the sale of a drug product, to be a party to any agreement resolving or settling a patent infringement claim in which: (1) an abbreviated new drug (generic) application filer receives anything of value; and (2) such filer agrees not to research, develop, manufacture, market, or sell the generic product for any period.

The Judiciary Committee bill specifically cites the appellate court decision approving reverse payments, and points out that several settlements since that decision have resulted in generic companies receiving compensation to keep cheaper drugs off the market. According to an FTC study released in June, consumers, insurance companies, and the federal government have spent an extra $3.5 billion for prescription drugs every year because of such settlements.

As expected, the Senate’s reverse payment legislation is strongly opposed by both generic and branded drug companies. These companies argue that parties need to be able to negotiate such agreements, given the uncertainties of litigation, and that reverse payment legislation will result in more cases going to trial rather than settling. The result, they say, could be less predictable litigation costs, less generic drug filings, and less generic drugs for consumers.

Although courts are reluctant to oppose reverse payments, both Democrats in Congress and the Obama Administration seem eager to score political points by slamming pharmaceutical companies as responsible for the high cost of healthcare. With the DOJ and FTC aligned on the issue, it is increasing likely that the recently approved Senate Judiciary bill will end the era of reverse payments between branded and generic drug companies.

Arnall Golden Gregory LLP serves the business needs of growing public and private companies, helping clients turn legal challenges into business opportunities. We don't just tell you if something is possible, we show you how to make it happen. Please visit our website for more information, http://www.agg.com/.