Wearable Technology: Protecting IP Rights and Minimizing Infringement Risks Leveraging Utility Patents, Design Patents, Trademarks and Trade Dress to Safeguard IP

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TUESDAY, AUGUST 23, 2016 1pm Eastern | 12pm Central | 11am Mountain | 10am Pacific

Today’s faculty features:

John M. Augustyn, Shareholder, Leydig Voit & Mayer, Chicago

Rod S. Berman, Partner, Jeffer Mangels Butler & Mitchell, Los Angeles

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Wearable Technology: Protecting IP Rights and Minimizing Infringement Risks John M. Augustyn Leydig, Voit & Mayer, Ltd. Strafford Webinar – August 23, 2016

Chicago Frankfurt am Main ChicagoSan Francisco l Rockford Bay l SeattleArea l Washington Washington, D.C.D.C . Frankfurt, Germany John Augustyn

John Augustyn has been active in litigation, client counseling, and prosecution for over 25 years. He has been lead or co-counsel in patent and trade secret litigations throughout the country. In addition, he manages the patent prosecution for several international corporations. Furthermore, he has extensive experience in the drafting and negotiation of agreements and licenses relating to intellectual property. He has authored numerous articles and chapters for books, has appeared on multiple television and radio programs, and has provided over 20 CLE programs to thousands of attorneys. Mr. Augustyn has been a law school instructor for several years. Prior to attending law school, he worked as an engineer for a Fortune 100 company. Mr. Augustyn has received several legal awards, including Super Lawyer, Top Rated Lawyer, and Leading Lawyer.

6 Agenda

John Augustyn

– What is Wearable Technology?

– Examples of Wearables

– Recent Cases

– Utility Patents

– Design Patents

– Trade Secrets

– Data Security and Privacy

7 Agenda (continued)

Rod Berman

– Trademarks, Logos, Taglines

– Trade Dress

– Design Patents

– Copyright

– Comparisons

– Partnerships and Other Agreements

8 What is Wearable Technology?

Several possible definitions

– A device which is worn by a person and the device includes a new technology.

– A device which is worn by a person and the device includes electronics.

– A device which is worn by a person and the device communicates with another device, such as, a phone or a network.

9 Examples of Wearables

Head

– Virtual Reality Headsets

– Google Glass

– Blue Light Eyeglasses (filter out blue light from TV’s, computers, and phones about 2-3 hours before bedtime).

– Sleep Hat (Sleep Shepherd-stocking-type hat with speakers. Monitors brain waves to generate sounds to aid sleeping).

– Spree Smart Cap (Fitness tracker which includes an electronic pod in the headband which connects to app.)

10 Examples of Wearables (continued)

Wrist − Apple Watch − Fit Bit − Jawbone

Body

− Shirts which monitor your heart rate, breathing, muscle usage, and other items.  Catapult (measures metrics and used by NFL, NBA and college teams)  Adidas miCoach (measures metrics and used by soccer teams)  Zebra (RFID chips in shoulder pads of football players which tracks player stats)  Athos (measures metrics including muscle groups)  Sensoria (measures metrics and used by Formula 1 racing teams)  Ralph Lauren Polo Shirt (measures metrics and connects to phone) − Clothes printed on 3D printer. Danit Peleg on Ted Talk. Made five outfits using open source file for fabric. Used a soft filament vs. hard filament. Assembled fabric pieces into outfit. Also printed shoes on 3D printer.

11 Examples of Wearables (continued)

Shoes

− Electronics to monitor your activity. (GPS SmartSole monitors the location of people who may get lost due to memory impairment.) − Shoes printed on 3D printer.

Accessories

− Handbags which charge your phone. − Cuff (An electronic module which vibrates to notify you of calls and messages. The module fits inside several different styles of bracelets and pendants.) − Ringly (A ring which changes color and vibrates to notify you of preselected calls, messages, apps or people. Customize notifications with 5 different colors and 4 different vibration patterns.)

12 Recent Cases

Ralph Lauren’s Ricky Bag

− Bryan v. Leoht, Inc., Ralph Lauren Corporation and Kickstarter, Inc., filed August 19, 2015, Southern District of Texas, Case No. 4:15 cv 2395

− Patent infringement suit over bag with illuminable interior and charger for electrical devices.

− US Patents 6,340,235 and 6,637,909

− Individual inventor (Jimmy Bryan) sued Ralph Lauren, Leoht and Kickstarter.

− Leoht Inc. was technology partner with Ralph Lauren.

− Leoht used Kickstarter to develop products for the technology.

13 Recent Cases (continued)

14 Recent Cases (continued)

15 Recent Cases (continued)

Adidas miCoach Training Shirts

− Sarvint Technologies, Inc. v. Textronics, Inc. and Adidas North America, Inc., filed January 9, 2015, Northern District of Georgia, Case No. 1:15 cv 73

− Patent infringement suit over Adidas miCoach training shirts which measure heart rate, etc. and use a smart phone app.

− US Patents 6,381,482 and 6,970,731

− Adidas and Textronics (body sensor manufacturer) sued by body sensor manufacturer, Sarvint.

16 Recent Cases (continued)

17 Recent Cases (continued)

18 Recent Cases (continued)

Jawbone and Fitbit

1. Aliphcom, Inc. d/b/a Jawbone v. Fitbit , Inc. et al. (filed May 27, 2015 in California State Court) − Jawbone files lawsuit against Fitbit and former Jawbone employees who left for Fitbit. − Lawsuit alleges trade secret misappropriation, etc.

2. Aliphcom, Inc. d/b/a Jawbone and Body Media, Inc. v. Fitbit , Inc. (filed June 10, 2015 in NDCA) − Jawbone sues Fitbit for patent infringement. − US Patents 8,073,707; 8,398,546 and 8,446,275

3. Aliphcom, Inc. d/b/a Jawbone and Body Media, Inc. v. Fitbit , Inc. (filed July 7, 2015 at ITC) − Jawbone files an ITC action against Fitbit and Flextronics (manufacturer for Fitbit) for patent infringement and trade secret misappropriation. − US Patents 8,073,707; 8,398,546; 8,446,275; 8,529,811; 8,793,522; 8,961,413

19 Recent Cases (continued)

20 Recent Cases (continued)

21 Recent Cases (continued)

22 Recent Cases (continued)

23 Recent Cases (continued)

24 Recent Cases (continued)

25 Recent Cases (continued)

4. Fitbit, Inc. v. Aliphcom, Inc. d/b/a Jawbone and Body Media, Inc. (filed September 8, 2015 in NDCA) − Fitbit sues Jawbone for patent infringement. − US Patents 9,026,053; 9,048,923 and 9,106,307

5. Fitbit, Inc. v. Aliphcom, Inc. d/b/a Jawbone and Body Media, Inc. (filed September 3, 2015 in D. Del.) − Fitbit sues Jawbone for patent infringement. − US Patents 8,909,543; 9,031,812 and 9,042,971

6. Fitbit, Inc. v. Aliphcom, Inc. d/b/a Jawbone and Body Media, Inc. (filed November 2, 2015 at ITC) − Fitbit files an ITC action against Jawbone for patent infringement. − US Patents 8,868,377; 8,920,332 and 9,089,760

26 Recent Cases (continued)

27 Recent Cases (continued)

28 Recent Cases (continued)

29 Recent Cases (continued)

30 Utility Patents

Patentability − Novelty, non-obviousness, and utility − Components of wearable: • Accelerometer • Battery • Bluetooth components • Display • GPS • Haptic devices • Input Device • LED • NFC components • Printed circuit board • Sensors • USB interface

• What is novel? • Individual component? • Assembly? • System? • Software? • App? • Packaging? • Method?

31 Utility Patents (continued)

Patent Eligibility in View of Alice v. CLS Bank

− Is the claimed subject matter of the wearable “patent-eligible”?

− Two part test

32 Utility Patents (continued)

Divided/Joint Infringement

− Wearables can involve communication between: • Two or more devices of the same person . User’s smart phone communicating with the same user’s wrist device • Two or more devices of different individuals . Person A’s device communicating with Person B’s device • Two or more devices between individual and an entity . Person A’s smart phone communicating with Company B’s credit card reader • Two or more different entities . Company A sharing data with Company B data

− These scenarios raise joint infringement issues

33 Utility Patents (continued)

Divided/Joint Infringement (continued)

− The law is changing and may be different in several years

− Recent case law

− Strategic claim drafting:

• Single actor claims

• Combination of systems, methods, devices

34 Utility Patents (continued)

Patent Clearance Issues

− Example, clearance for new smart watch • Smart watch patents • Communication patents • Circuit patents • Power management patents • Watch face and case patents • Wristband patents • Heart rate sensor patents • Accelerometer patents • Design patents • Also consider Trademarks and Copyrights

35 Design Patents

– New, original and ornamental design for an article of manufacture. 35 USC § 173.

– Design patents have been used for shoes and other articles of clothing and accessories.

– Ornamental vs. Functional.

– Shape of an Article.

– Surface Ornamentation.

– Graphical User Interface.

– Protect only certain portions or features of an article (versus the entire article) using broken lines to show environment.

– Use design patents in conjunction with trademark protection and trade dress protection for the shape or feature.

36 Recent Cases (continued)

37 Recent Cases (continued)

38 Recent Cases (continued)

39 Recent Cases (continued)

40 Recent Cases (continued)

41 Trade Secrets

– The Uniform Trade Secrets Act defines a trade secret as:

• information, including a formula, pattern, compilation, program, device, method, technique, or process.

• that derives independent economic value, actual or potential, from not being generally known to or readily ascertainable through appropriate means by other persons who might obtain economic value from its disclosure or use; and

• is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.

– Laws vary by state.

– New federal legislation, Defend Trade Secrets Act of 2016.

– Trade secrets in software.

– Trade secrets in manufacturing process.

42 Data Security and Privacy

Fair Information Practice Principles (FIPPs)

1. Notice

2. Choice

3. Access/Participation

4. Security

• Items 1 and 2 (Notice and Choice) may be achieved by consent of user via app, packaging or website

43 Data Security and Privacy (continued)

Data Collected

– Health Data

– Location Data

– Financial Data

Data Flow

– Between Wearable and Receiver [Phone or Network (Wi-Fi/Broadband or Cellular)]

– Between Phone and Network (Wi-Fi/Broadband or Cellular)

– Between Network (Wi-Fi/Broadband or Cellular) and Wearable Provider (Manufacturer or Service Provider)

– Between Wearable Provider and Third Parties (Analytics, Advertisers, Insurance Companies, etc.)

44 Data Security and Privacy (continued)

Data Breaches

– Interception of data between the data flows noted above

– Disclosure of data on devices and servers of the entities involved in the data flows noted above (via hacking, theft or accidental disclosure)

Use of Collected Data

– Positive Uses – advertising for goods or services relating to an activity (i.e. buy new shoes for running) or to a location (i.e. buy sports drinks at nearby store).

– Negative Uses – insurance company monitoring your exercise activity (or lack thereof) or your medical metrics during exercise to adjust your insurance premiums. Criminals monitoring your location to commit robbery, burglary or kidnapping.

45 Data Security and Privacy (continued)

Federal Regulation

– Proposed Location Privacy Protection Act

 Prohibit collecting or disclosing geolocation information without consent of the user

– Proposed Geolocation Privacy and Surveillance Act (“GPS Act”)

 Amends the criminal code to prohibit intercepting, disclosing, or using the geolocation information of another person

Data Security

– Policies and procedures to maintain security of data collected from user of wearable device.

– Written plan and procedures for responding to a data breach.

46 Data Security and Privacy (continued)

Data Breach Liability

– Causes of Action

• Negligence to maintain adequate security.

• Misrepresentation of facts relating to security measures.

– Government Actions (FTC, State Agencies, etc.)

– Civil Actions

 Class actions

 Business-to-business litigation

47 Disclaimer

Any views expressed through this presentation are those of the author and may not reflect the views of Leydig, Voit & Mayer or any of its clients. This presentation is for informational purposes only and not for the purpose of providing legal advice. Use of any information contained within this presentation does not create an attorney-client relationship. ©2016 Leydig, Voit & Mayer. All rights reserved.

48 Intellectual Property Issues for Wearable Technology

Rod S. Berman, Jeffer Mangels Butler & Mitchell LLP [email protected], 310.201.3517 Strafford Wearable Webinar August 23, 2016 TRADEMARKS, LOGOS, TAGLINES

50 IP Issues for Wearable Technology

Trademarks, Logos, Taglines

• Registration available but limitations on non-traditional trademarks, e.g., color, shape, scent, touch, sound and motion • Protection of unregistered marks • Protection of "Wearable", "Glass" and generic issues: Guidelines for Glass™ use (Exhibit A) • Clearance: Fitbug v. Fitbit for fitness related wearable devices • Motorola v. UNORTH – “moto” v. “mota” for dueling wearable devices • Cost Term of life

TRADE DRESS

52 IP Issues for Wearable Technology

Trade Dress

• Overall shape and appearance: the goodwill • Where are 3-D marks protected? • UK design rights and industrial designs • Functional product configuration not protected; “serves no purpose other than identification.” Test: – Does design yield a utilitarian advantage? – Are alternative designs available? – Do ads tout utilitarian advantages? – Does the design result from a comparatively simple or inexpensive method of manufacture? – As compared to design patents, more strictly applied due to the long life of trade dress – PTO could consider red color and heart shape for a heart monitor aesthetically functional • Must be distinctive – work with advertisers to use "look for" advertisements but not touting functional features (Apple® doomed); secondary meaning for products; (for secondary meaning for product) • Distinctive packaging • Trend may pass before rights obtained • Apple v. Samsung – trade dress was functional; design patents worked

53 DESIGN PATENTS

54 IP Issues for Wearable Technology

DESIGN PATENTS

• Apple hired Paul Deneve from Yves Saint Laurent • Ornamental Features not “dictated solely by” the way it works or operates • The Ergonometric concept and functionality test: – Does the protected design represent the best design? – Would alternative designs adversely affect the utility of the article? – Any utility patents? – Functional touting in advertisements? – Is the overall appearance or elements in the design not clearly dedicated by function? • Google Glass (Exhibit B) • Way to recoup investment in design cost; cf. Trade dress (avoid confusion and protect investment in marketing) • Cost and term of life • May acquire rights faster than trade dress • May have both design patent (black and white) and trade dress (color)

55 COPYRIGHT

56 IP Issues for Wearable Technology

• Whose law applies? • Incorporation of music • Instructions

COMPARISONS

58 Intellectual How to Acquire Time to Obtain Standard for Select Miscellaneous Protects Doesn't Protect Registerability Cost Enforcement Damages Foreign Issues Property Right Rights and Lifetime Infringement Issues

Need to show Actual damages or Source indicia; distinctive - 5 years of Registration about Must Show Non- lost profits; attorneys' Generally no overall Use and Average 1.5 years use - promote; Costly $2500 with 2(f); functional; and Functional Federal or State fees; corrective common law; color Trade Dress appearance registration - to register; to prove secondary extra costs to file likelihood of Utility patent not helpful features Court/Customs advertising; treble might not be and image of a Federal and State potentially foreve meaning - could be affidavits and confusion factors; and statutory registerable product millions of $s of renewals survey evidence damages; injunction promotional activities

Product must have secondary Can obtain conclusive Laws vary by Circuit, meaning; right to use, and strong e.g., aesthetic packaging can presumption of validity functionality; ITC be inherently distinctive

"color"

Ordinary observer as informed by Lost profits, damages, Ornamental Functional Average 18 To issuance about prior art finds two infringer's total features of Federal Design Patent features; prior months to Yes, presumed valid $3,000; no Federal Court designs profits; attorneys' Can Register Utility patent not helpful article of registration art issuance; 15 years maintenance fees substantially fees; treble damages; manufacture similar; expert injunction testimony

"black and Just Federal Circuit law;

white" ITC

Over 70 years; Access and Need to show proof Immediately Damages, statutory Expressions of Functional can obtain Federal substantial of ownership; can Copyright when fixed in Yes, presumed valid About $250 damages, attorneys' Utility patent not helpful ideas ideas certificate in 10 Court/Customs similarity; expert register in some tangible form fees and injunction days testimony countries, e.g., China

59 PARTNERSHIPS AND OTHER AGREEMENTS

60 IP Issues for Wearable Technology

Partnerships and Other Agreements

• Who owns the patent rights in a collaboration? • Google partnership with Ray Ban and Oakley • Use of exclusive requirements and supply agreements to "secure" IP rights – sourcing, outsourcing, and license (patent, copyright or trademark) • Jawbone patent lawsuit prior to FitBit IPO – a settlement tool?

61 Rod S. Berman Jeffer Mangels Butler & Mitchell LLP [email protected] 310.201.3517