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Skilled in the Art

Everything IP

Scott Graham

Sep 04, 2018

Welcome to Skilled in the Art. I'm law.com IP reporter Scott Graham. I hope you all enjoyed your holiday weekend. Today the Federal Circuit kicked off September with an interesting trademark argument and an IP boutique announced expansion—repeat, expansion—plans. As always you can email me your thoughts and feedback and follow me on Twitter.

 

Omaha Steaks Takes Trademark Beef to CAFC

Trademark owners have had a rough few months before the Federal Circuit. First the appellate court in June ordered the Trademark Trial and Appeal Board to consider whether the Coke Zero mark is generic. Then arguments earlier this summer for Real Foods and its “Corn Thins” mark didn't go well, though the court hasn't ruled in that case yet.

But on Monday it sounded as if Omaha Steaks International has persuaded the Federal Circuit that its mark—featured everywhere from Seinfeld to The West Wing—is sufficiently famous to merit more protection than it was getting from the Trademark Trial and Appeal Board.

Omaha Steaks general counsel Nora Kane told the court the company spends $40 million to $50 million in advertising each year, about 10 percent of its annual sales. But the TTAB discounted that evidence, saying Omaha Steaks hadn't explained how its advertising translates into actual notoriety. “Omaha Steaks,” therefore, isn't “truly famous,” the TTAB concluded, and its reliance on the geographic descriptor “Omaha” further weakens it. That opened the door for Greater Omaha Packing to register its competing mark.

The TTAB said “you have to show us market share, show us something else,” Kane recalled. “Well, I can't show you market share. We're a privately held company. Been in business 101 years now. There is nobody that I can go to and say, 'What are your sales? How much are you spending on advertising?'”

It didn't sound as if she'll have to do that. Before her opponent, Stephen Samuels of Samuels & Hiebert, finished saying his name, Judge Kathleen O'Malley jumped in. “What if we conclude that the board erred in its analysis of fame, that it rejected too readily all the evidence that the mark is famous?” she asked Samuels. “Where does that leave you?”

Chief Judge Sharon Prost added that while the TTAB pointed out that many other companies use “Omaha” in their names, few of them involved meat or other food products.

Samuels disagreed. Omaha is used in the names of steakhouses, wine, popcorn and other food products. “Those are all similar goods to meat,” he said.

“Popcorn is similar to meat?” O'Malley asked.

“I would suggest yes,” Samuels insisted. “We're not talking about automobiles or something.”

There was some dispute at the TTAB as to whether Greater Omaha Packing is actually in the same business of mail ordering steaks directly to consumers. “Is there anyone else in your space?” O'Malley asked Kane. “That's what I'm trying to figure out.”

Um, I can think of one person who used to be.

 

Tensegrity Goes Coast to Coast

Every time an IP boutique such as Fitzpatrick, Cella, Harper & Scinto gets acquired by a full service firm, the questions begin: Is the IP boutique an endangered species?

Well, Silicon Valley's Tensegrity Law Group, founded in 2011 by Matthew Powers and other Weil Gotshal & Manges alumni, doesn't sound endangered. In fact, it's expanding, announcing Tuesday that it's launching a second office in the Washington, DC area. Tysons Corner, Va., to be precise.

Now, at 17 lawyers in one Redwood City office, Tensegrity didn't have the same footprint as Fitzpatrick. Still, business is good, and clients are eager for the alternate fee structures the firm can easily provide, partner Robert Gerrity said. “Particularly given our ITC and Federal Circuit work, DC is a great place to be,” Gerrity said.

The office will be led by Tensegrity partners Azra Hadzimehmedovic, who's already been spending signifcant time in D.C., and Aaron Nathan. They'll be joined by senior associate Samantha Jameson. Gerrity said the firm envisions adding lateral hires down the road.

 

Speaking of Litigation Boutiques ...

Eight years after leaving Kirkland & Ellis to form Desmarais LLP, star IP litigator John Desmarais dishes with my colleague Susan DeSantis about recruiting, succession planning and flat fees at his 57-lawyer firm.

Some highlights from the interview.

On competing for top talent: Desmarais associates "are paid $20,000 above the New York scale at every level (first-year associates currently start at $210,000), and their year-end bonuses are also significantly above the New York market. … We compete with the large firms for the same recruits. If we want to continue to grow, we need more and more of the top recruits who have technical degrees, and that is a limited pool that is fiercely sought after by several firms."

On creating an alternative to hourly rates: "We do not bill by the hour. Instead, we bill a monthly, flat fee and, if a client prefers, we also will bill a flat monthly fee for the expenses, which we will then manage. The preset monthly fee gives clients clear budget certainty for the duration of the matter. Of course, that arrangement should not be confused with a cap on the overall fee or the amount a matter will cost … The fixed monthly fee billing approach not only provides predictability for our clients’ budgets, it also enables our firm to make accurate financial forecasts."

On the future: "We are actively planning for succession. Our plan is implemented regularly by pushing responsibility for client matters down to the next generation as soon as practicable. Firms generally do not do a good job in this regard because senior partners are unwilling to let go of responsibility for clients and matters. We have a very different philosophy, and we regularly encourage our clients to allow the younger partners to take control. That approach frees up the more senior partners either to develop new clients or to train the younger partners, both of which are critical to the firm’s long-term success."

Read the full interview.

 

Who Got the Work?

Some big guns are squaring off in high-end NPE litigation over smartphone camera technology. Tel Aviv-based Corephotonics sued Apple last year and again in 2018 over dual aperture lens technology. RPX Corp. has reported that Corephotonics was formed by executives formerly affiliated with IP shop Tessera Technologies, and claims funding from MediaTek, SanDisk and Foxconn, among others. The company says it began discussing collaboration with Apple in 2012 and was led to believe Apple was interested in partnering. Instead Apple began touting the same functionality on the iPhone 7 while never taking a license. Both suits are pending before U.S. District Judge Lucy Koh. In the meantime, Apple filed five IPR petitions challenging the validity of Corephotonics' patents this spring and summer.

Quinn Emanuel Urquhart & Sullivan and Russ August & Kabat represent Corephotonics in the district court litigation. Partners Claude Stern and Yury Kapgan and of counsel Bruce Zisser helm the team for Quinn while partners Marc Fenster, Benjamin Wang and Neil Rubin and associate Bahrad Sokhansanj have weighed in from Russ August. Apple is represented by Cooley partners Heidi Keefe, Lowell Mead, Phillip Morton and Stephen Smith and special counsel Priya Viswanath.

Haynes and Boone partners David O'Brien, Michael Parsons and Andrew Ehmke and associate Jordan Macoutel and Hong Shi are representing Apple in the IPR proceedings. Russ August partners Reza Mirzaie and C. Jay Chung are defending Corephotonics at the PTAB.

 

That's all from Skilled in the Art for today. I'll see you all again on Friday.

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