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Most people are familiar with the concept of trademarks in the form of logos or words. But intellectual property can also be embodied in sounds not represented by words and drawings, but rather musical notes and/or auditory tones. While sound marks are not nearly as common as word marks, many sound marks are immediately recognizable, including Southwest Airline’s “Ding!,” MGM’s roaring lion, AOL’s “You’ve got mail,” the Pillsbury Doughboy’s giggle, NBC’s chimes, Nokia’s default cell phone ringtone, and the Harlem Globetrotter’s theme song. However, the legal requirements to register such sound marks are different than word marks, and much less well-defined by the courts.

According to United States Patent and Trademark Office trademark examination protocol: “A sound mark identifies and distinguishes a product or service through audio rather than visual means. Examples of sound marks include: (1) a series of tones or musical notes, with or without words, and (2) wording accompanied by music.” As one court described the standard applicable to sound marks: “A sound mark depends upon aural perception of the listener which may be as fleeting as the sound itself unless, of course, the sound is so inherently different or distinctive that it attaches to the subliminal mind of the listener to be awakened when heard and to be associated with the source or event with which it is struck.” In re General Electric Broadcasting Co., 199 U.S.P.Q. 560, 562-63 (T.T.A.B. 1978).

In sum, if a sound can be readily associated with the source of a product or service in the minds of consumers, it can potentially serve as a trademark. Therefore, to be protected, sound marks must be a distinctive source identifier – as in, when you hear the DING!, you know it’s Southwest Airlines. But a different spectrum of distinctiveness than that applied to traditional word marks is followed in the case of sound marks. The U.S. Trademark Trial and Appeal Board (TTAB) has defined the spectrum as the distinction between “unique, different, or distinctive” sounds on the one hand and “commonplace” sounds on the other hand. Unfortunately, no further explanation of this distinction has been made by the courts. The most that can be said is the former are inherently distinctive and thus do not require secondary meaning, while the latter require secondary meaning to demonstrate distinctiveness. Secondary meaning for sounds has been described as whether consumers “recognize and associate the sound with the offered services . . .exclusively with a single, albeit anonymous, source.” In re General Electric Broadcasting Co. at 563.

Presuming that an applicant for a sound mark can demonstrate distinctiveness, often times the applicant must then address a registration refusal based on the doctrine of functionality. In the case of sound marks, the functionality doctrine primarily comprises “utilitarian functionality” which can defeat a mark containing a product feature that “is essential to the use or purpose of the article or . . . affects the cost or quality of the article.” Inwood Laboratories, Inc. v. Ives Laboratories, Inc., 456 U.S. 844, n.10 (1982).

Harley-Davidson dealt with the functionality hurdle when it applied to register “the exhaust sound of applicant’s motorcycles, produced by V-twin, common crankpin motorcycle engines when the goods are in use,” and was opposed by several other competing motorcycle companies. See Kawasaki Motors Corp. v. H-D Michigan, Inc., 43 U.S.P.Q.2d 1521 (T.T.A.B. 1997); Honda Giken ogyo Kabushiki Kaisha v. H-D Michigan Inc., 43 U.S.P.Q.2d 1526 (T.T.A.B. 1997). The opposing parties argued that the exhaust sound proposed to be trademarked by Harley was purely functional because it merely the sound produced by any engine of that type. Ultimately, the question of whether the Harley exhaust sound was functional was never decided because Harley abandoned its trademark application in the face of substantial opposition. Regardless, the issue of functionality is an important issue to consider when contemplating a sound mark. There are many products and services that create a unique sound that consumers recognize as an indication of unique source. The question then becomes how functional is that sound when produced. If the sound is merely functional, registration of the mark may be difficult.

In today’s business environment, considerable money is spent so that products and services can not only be seen, but also “heard” by consumers. If you have associated your business with a unique, non-functional sound, it may be worth registering your sound mark to ensure that the sound of your business remains your own.

Section 2019.210 of the Code of Civil Procedure requires that a plaintiff identify its alleged trade secrets with “reasonable particularity” before that party can commence discovery on its claims based upon trade secret misappropriation. In Perlan Therapeutics, Inc. v. Superior Court (NexBio, Inc.), a California appellate court revisited the requirements of section 2019.210 and held that a trial court has “broad discretion” in determining whether a plaintiff has complied with its obligations under section 2019.210.

Defendant Mang Yu incorporated Perlan in 1997 to develop “protein based therapeutics for the treatment of diseases caused by viral infection and diagnostic products to detect viral infection.” He and his wife, Fang Fang, served as directors and officers of Perlan at various times. Perlan developed a product known as “ColdSol,” a daily nasal spray for treating the common cold. Yu resigned from Perlan in June 2001 and incorporated a new company, NexBio, Inc., the following August. Fang continued to work at Perlan until May 2003. She then joined her husband as a director and officer of NexBio. NexBio obtained more than $50 million in grants to fund its research into “protein therapies for influenza”. Perlan sued NexBio, Yu and Fang claiming that they had secretly formed NexBio “to wrongfully exploit and misappropriate the Perlan technology inventions and other proprietary information.” Perlan’s second amended complaint included 12 causes of action that were all based, at least in part, on allegations of trade secret misappropriation.

Perlan attempted to conduct discovery after providing an initial 2019.210 trade secret disclosure statement but defendants moved for a protective order. Perlan then amended its 2019 statement which was again met with a motion for protective order. Perlan’s amended trade secret statement consisted of a “preliminary statement” and “general objections” that often appear in typical discovery responses. The rest of the amended trade statement consisted of four pages, much of which repeated the narrative in the second amended complaint and provided additional technical details concerning the trade secrets that was also publicly available. The statement continued to provide additional details about an invention and related processes that were not included in the second amended complaint but contained only general descriptions and did not provide the specific identification of particular ingredients used in the process. The statement concluded by claiming that the trade secrets also included “all related research, development, advancements, improvements and processes related thereto.”

In granting the defendant’s motion for protective order and thus preventing plaintiff from engaging in discovery, the Court concluded that Perlan “failed to demonstrate that the purported trade secret(s) is not generally known to the public or to other persons who can obtain economic value from its disclosure or use.” The Court also held that, although plaintiff was pursuing a claim for the misappropriation of several trade secrets, “the statement has not clearly identified all of the trade secrets at issue.” After the Court granted the protective order, plaintiff filed a petition for a writ of mandate challenging the Court’s discovery order.

The reviewing Court noted that although “writ proceedings are not the favored method for reviewing discovery orders,” it published “this opinion to emphasize that trial courts still have broad discretion under section 2019.210.” The Court began by noting the purpose of section 2019.210 was to: (1) Promote well-investigated claims and dissuade the filing of meritless trade secret complaints; (2) prevent plaintiffs from using the discovery process as a means to obtain the defendant’s trade secret; (3) assist the court in framing the appropriate scope of discovery and in determining whether plaintiff’s discovery requests fall within that scope; and (4) enable defendants to form complete and well-reasoned defenses. With these considerations in mind, the Court, after reviewing the record, concluded “(1) Perlan has the ability (but not the inclination) to provide clearer, more specific information about at least one of its alleged trade secrets; and (2) although Perlan lacks any particular information beyond three purported trade secrets, Perlan wishes to reserve the right to unilaterally amend (without leave of the Court) its identification so it can broaden its lawsuit to include claims it hopes to develop in discovery.” In reaching this conclusion, the Court reviewed two recent California appellate decisions, Advanced Modular Sputtering, Inc. v. Superior Court (2005) 132 Cal.App.4th 826 and Brescia v. Angelin (2009) 172 Cal.App.4th 133.

The Court noted that the Advanced Modular court observed that “the letter and spirit of section 2019.210 require the plaintiff … to identify or designate the trade secrets at issue with ‘”sufficient particularity’” to limit the permissible scope of discovery by distinguishing the trade secrets ‘”from matters of general knowledge in the trade or of special knowledge of those persons … skilled in the trade.”’” The Court noted that although trade secret identification does not require “every minute detail” of the trade secret to be disclosed or the “greatest degree of particularity possible,” nor does it envision a “miniature trial on the merits of a misappropriation claim before discovery ay commence,” the Court noted that where the alleged trade secrets consist of incremental variations on, or advances in the state of the art in a “highly specialized technical field;” then “a more exacting level of particularity may be required to distinguish the alleged trade secrets from matters already known to persons skilled in that field.”

Likewise, in reviewing the Brescia decision, the Court recognized that section 2019.210 “does not create a procedural device to litigate the ultimate merits of the case – that is, to determine as a matter of law on the basis of evidence presented whether the trade secret actually exists.” The Court noted that the Brescia court rejected the theory “that a trade secret claimant must, in every case, explain how the alleged trade secret differs from information available in the public domain.”

In light of these decisions, the Perlan court concluded that the legal interpretation of “the meaning of section 2019.210’s `reasonable particularity’ requirement” is a de novo review. However, a trial court’s determination of whether a party has complied with 2019.210 which does not include an improper understanding of the legal meaning of “reasonably particular” will be reviewed only for an abuse of discretion. The Perlan court noted that “so long as a trial court applies the correct legal standard and there is a basis in the record for its decision, appellate courts should not micromanage discovery. Rather, the trial court must exercise its sound discretion in determining how much disclosure is necessary to comply with section 2019.210 under the circumstances of the case.”

With that standard in mind, the Perlan court concluded that the trial court correctly determined that Perlan’s amended trade secret disclosure statement was inadequate. First, Perlan did not identify all of its trade secrets that it claimed to have been misappropriated. Second, Perlan was not entitled to include broad “catch all” language as a tactic “to preserve an unrestricted unilateral right to subsequently amend its trade secret statement.” The Court cautioned that if plaintiff did not known what its only trade secrets were, it had no basis to allege that defendants misappropriated them. The Court also noted that, if Perlan uncovered additional evidence during discovery that more of its trade secrets had been misappropriated, “it may have good cause to amend its trade secret statement under appropriate circumstances.”

Finally, the Court noted that Perlan was not being required “to convince defendants or the court in its section 2019.210 statement that its alleged trade secrets are not generally known to the public. This is an element of their case that must be proven, but not at the pre-discovery stage of the action.” The Court recognized, however, that the trial court was “simply applying the rule that in a `highly specialized technical field’ (such as developing protein based treatments for viral infections) a more exacting level of particularity may be required to distinguish the alleged trade secrets from matters already known to persons skilled in that field.”

The Perlan decision reminds plaintiffs of their duty to identify their alleged trade secrets with reasonable particularity and that a determination of whether this requirement has been satisfied will be left to the broad discretion of the trial court. In cases involving “highly specialized” fields of expertise, a plaintiff may wish to error on the side of caution and provide more detail about its alleged trade secrets because the trial court may place a greater burden on the party to make a detailed disclosure prior to allowing discovery to commence.

Recently the 7th Circuit in Sunstar, Inc. v. Alberto-Culver Company provided a reminder to attorneys engaging in a business transaction between domestic and a foreign parties. Stated plainly, the 7th Circuit reminded business attorneys that if a term is included in a transaction document – especially if that term is a foreign word – be sure you understand what it means. This case presented the question of how a foreign legal term included in a trademark license agreement should be interpreted where the choice of law for such agreement was Illinois state law.

In 1980, Alberto-Culver, a major producer of skin and hair care products, including the “Alberto V05” line of products, entered into a license agreement with Sunstar to license a number of trademarks, including the Alberto V05 mark, to Sunstar for 99 years. The license agreement contained the provision which stated that if at any time during the term of the agreement the licensor had a “reasonable ground” for thinking that Sunstar had committed an act that created a “danger to the value or validity of licensor’s ownership and title in the licensed trademarks” Sunstar would have to cease use of the trademarks in question until the licensor “reasonably determined” that the danger had passed. In the event of an actual breach of the license agreement by Sunstar, the license was to be rescinded and the marks returned to Alberto-Culver.

Additionally, the license agreement refers to the license granted to Sunstar as a senyoshiyoken, which in English means “exclusive use rights.” According to Japanese trademark law, the holder of a senyoshiyoken not only has an exclusive right to use the licensed trademarks within the geographical scope of the license but, holds other rights and privileges such as the right to sue infringers of the trademarks in its own name. Under Japanese trademark law, the holder of a senyoshiyoken is treated, in certain circumstances, as if they were the trademark owner.

In 1999 Sunstar began using a variant of the Alberto-Culver’s V05 mark. Sunstar described it as a “modernized” version of the licensed trademark. Alberto-Culver refused to amend the license agreement to permit Sunstar to use the modernized version and considered such use a breach of the license agreement. Sunstar filed suit seeking a declaration that Sunstar’s use of the modernized version of the mark was permitted by the license and as a holder of a senyoshiyoken.

At the District Court, Albert-Culver took the position that the parties used the term “senyoshiyoken” merely to indicate that Sunstar could register the license with the Japanese trademark office and that the term did not confer on Sunstar the rights that a senyoshiyoken confers on a holder under the Japanese law. The District Court agreed and refused to instruct the jury on the legal meaning of the Japanese term.

On appeal, the 7th Circuit found fault with the District Court and stated that it could not find any basis for the proposition that the term senyoshiyoken should be defined as suggested by Alberto-Culver. The court noted that when parties to a contract, especially sophisticated parties, use a technical term there is a presumption that they are using it in its technical sense. Where a technical term also happens to be a foreign term the presumption is that it is used in its foreign technical sense. Here, the 7th Circuit noted that the parties were using a foreign technical legal term, and despite that the contract calls for Illinois law to govern, the meaning of senyoshiyoken is to be determined under Japanese trademark law. (The court noted that the parties certainly could not have meant that the meaning of senyoshiyoken would be decided under Illinois law as the word has no meaning under Illinois law.)

Accordingly, the court turned to Japanese trademark law to determine whether the holder of a senyoshiyoken is permitted to use variants of the license the trademark. After reviewing various scholarly articles on Japanese trademark law, the court determined that as a holder of a senyoshiyoken, the Japanese rule of law would allow the type of changes that Sunstar sought to make to the licensed trademarks. Under Japanese trademark law (as well as under U.S. trademark law) the change Sunstar sought to make, notably a change in the trademark typeface, is not considered a material alteration of the original trademark. The court further explained that the longer the term of the license, the less plausible it is to assume that, in the absence of an express prohibition, the license was forbidden to make small changes to the licensed trademark. Here, the court noted that the license was for 99 years and changes in language, typeface, marketing methods, and trademark styles would be likely and would require the modification to the wording or appearance of the licensed mark in order to enable the branded product to be marketed effectively.

Although in this case both U.S. and Japanese law were the same, the 7th Circuit’s holding would allow for a situation where a foreign legal term, interpreted pursuant to the laws of its home nation, could result in a determination that would otherwise not occur under U.S. law. Thus, where foreign counsel insists on the inclusion of a foreign legal term U.S. counsel should be certain how that term will affect the transaction under the laws of the foreign nation.

Not all trademark law is aimed at protecting consumers. The Federal Trademark Dilution Act (“Act”) is aimed at protecting a company’s property right in its trademark. Dilution is defined as “the lessening of the capacity of a famous mark to identify and distinguish goods or services, regardless of the presence or absence of competition between the parties or the likelihood of confusion, mistake or deception.” In essence, dilution forbids the use of a famous trademark by others in any manner that lessens the uniqueness of the mark. Again, the purpose of the dilution doctrine is not to protect the consumer, but to protect the property right and goodwill that a company has developed in a mark.

Dilution can be separated into two related concepts: blurring and tarnishment. Blurring occurs when a defendant uses or modifies the plaintiff’s trademark to identify the defendant’s goods and services, raising the possibility that the plaintiff’s mark will lose its ability to serve as a unique identifier of the plaintiff’s product. In these cases, consumers are not confused as to the source of the mark. The original trademark, however, is lessened. For example, if a car company decided to sell cars under the trademark McDonalds, the link and image between the word “McDonald’s” and fast food is weakened.

Besides blurring, dilution can be caused by tarnishment. Tarnishment occurs when the trademark is used in an unsavory or unflattering manner. In a case last year, Hershey, the chocolate maker, claimed that an individual sold marijuana in packages that resembled Hershey products, the Hershey trademark was degraded by such use.

In order for a trademark owner to succeed on a trademark dilution claim, it must satisfy the elements of the claim. The first and most important aspect of a dilution claim is that the mark must qualify as a distinctive and famous mark. The Act states that courts should consider, but are not limited to, eight factors. These are:

1. The degree of inherent or acquired distinctiveness of the mark
2. Duration and extent of the use of the mark in connection with the goods and services
3. Duration and extent of advertising and publicity of the mark
4. Geographical extent of the trading area in which the mark is used
5. Channels of trade for the goods or services for which the mark is used
6. Degree of recognition of the mark in the trading areas and channels of trade used by the mark’s owner and the person against whom the injunction is sought
7. Nature and extent of use of the same or similar marks by third parties; and
8. When and how the mark was registered.

From these eight factors, it is clear that Hershey’s, in the above case, would constitute a famous mark based on its duration of use of its mark along with its advertising and publicity.

The traditional remedy in dilution cases is an injunction against the trademark violator. In addition, monetary damages may be rewarded if the defendant is found to have willfully intended to trade on the trademark owner’s reputation or to cause dilution of the famous mark.

One of the requirements for obtaining a patent is enablement. As set forth in 35 U.S.C. §112, ¶1, the specification of the patent must teach a person skilled in the art how to make and use the invention without undue experimentation. The enablement requirement must be satisfied at the time the patent application is filed for each claim. If a claim in a patent is not enabled, it is invalid.

In In re ‘318 Patent Infringement Litigation (Janssen Pharmaceutica N.V. v. Teva Pharmaceuticals USA, Inc. and related cases) (2009 U.S. App. LEXIS 21166, September 25, 2009), the Federal Circuit Court of Appeals addressed the issue of enablement. Janssen’s patent covered a method to treat Alzheimer’s disease with a chemical compound called galanthamine. Claim 1 of the patent was:

“A method of treating Alzheimer’s disease and related dementias which comprises administering to a patient suffering from such a disease a therapeutically effective amount of galanthamine or a pharmaceutically-acceptable acid addition salt thereof.”

The patent application was filed on 1986. The specification was slightly longer than one page and contained brief summaries of six scientific articles which discussed the use of galanthamine on humans or animals for various purposes. None of the six articles addressed the treatment of Alzheimer’s or dementia or the potential of galanthamine to treat those diseases.

The PTO examiner rejected the original claims on the grounds of indefiniteness and obviousness. The claims were found to be indefinite because they covered a method of “treating and diagnosing” Alzheimer’s and the examiner stated that diagnosis was not related to treatment. The obviousness rejection was based on several of the scientific articles disclosed in the specification which addressed the treatment of memory loss in animals.

In response to the office action, the inventor deleted the word “diagnosis” so that the claims covered only the treatment of Alzheimer’s, which overcame the indefiniteness rejection. The inventor overcame the obviousness rejection by asserting that the scientific studies on memory loss had no relevance to Alzheimer’s because they were conducted under unrelated circumstances. The inventor also stated that experiments on animal models related to Alzheimer’s had begun.

The patent was allowed and issued in 1987. The research on the animal models was not completed by the time the patent issued and was not provided to the PTO.

The inventor later licensed the patent to Janssen. Janssen then obtained FDA approval to treat Alzheimer’s with galanthamine. Shortly thereafter, several drug companies filed abbreviated new drug applications for generic versions of galanthamine. Janssen sued these companies for patent infringement.

At a bench trial, the defendants admitted infringement, but asserted that the patent was invalid as anticipated, obvious, and not enabled. The district court found that the patent was not anticipated or obvious but was invalid on the grounds that it was not enabled. The court held that the specification lacked utility, as the animal tests were not done, and that it was not enabled because it did not describe the dosage to be used.

Janssen appealed. The Federal Circuit Court of Appeals affirmed the trial court’s decision.

The Court of Appeals discussed both the enablement and utility requirements:

“The utility requirement prevents mere ideas from being patented. As we noted in Genentech, Inc. v. Novo Nordisk A/S, 108 F.3d 1361, 1366 (Fed. Cir. 1997), ‘patent protection is granted in return for an enabling disclosure of an invention, not for vague intimations of general ideas that may or may not be workable…Tossing out the mere germ of an idea does not constitute enabling disclosure.’”

The court further stated:

“The utility requirement also prevents the patenting of a mere research proposal or an invention that is simply an object of research. Again as the Supreme Court stated in Brenner ‘a patent is not a hunting license. It is not a reward for the search, for compensation for its successful conclusion.’ [Citation omitted.] A process or product ‘which either has no known use or is useful only in the sense that it may be an object of scientific research’ is not patentable. [Citation omitted.] As we observed in Fisher, inventions do not meet the utility requirement if they are ‘objects upon which scientific research could be performed with no assurance that anything useful will be discovered in the end.’”

The court explained that patent applications for methods of treating diseases usually include test results to satisfy the utility requirement. The test results need not be Phase II (human trials), but rather may be from animal tests or in vitro research.

The court found that the patent application, however, did not include any test results. The six scientific articles clearly did not provide evidence of utility because the inventor had stated during the prosecution of the patent that those references did not relate to the method of the invention and did not render it obvious.

Janssen argued that utility was demonstrated by analytic reasoning and that test results were not necessary. The court noted that Janssen’s suggested reasoning was not included in the specification and was therefore irrelevant.

The court concluded:

“Thus, at the end of the day, the specification, even read in the light of the knowledge of those skilled in the art, does no more than state a hypothesis and propose testing to determine the accuracy of that hypothesis. That is not sufficient. [Citation omitted.] ‘If mere plausibility were the test for enablement under §112, applicants could obtain patent rights to “inventions” consisting of little more than respectable guesses as to the likelihood of their success. When one of the guesses later proved true, the “inventor” would be rewarded the spoils instead of the party who demonstrated that the method actually worked.’”