COVID-19 IP Lessons: Consider the Big Picture
In any crisis, there are always those that look to take advantage of the situation. The coronavirus pandemic is no different. Here, we have highlighted a few of the most egregious fortune hunters, attempting to take advantage of COVID-19 to expand their own intellectual property rights, or to otherwise benefit themselves at others’ expense.
First, while its always important to monitor and enforce your IP rights, one company was recently reminded how important it is to consider the big picture, beyond your immediate legal claims. As many are aware, a critical shortage of reliable coronavirus tests in the U.S. and abroad has impaired efforts to track and slow the disease, in recent weeks. That didn’t stop one company from attempting to enjoin the development and distribution of COVID-19 testing equipment.
In Labrador Diagnostics LLC v. BioFire Diagnostics, LLC and Biomerieux S.A., a non-practicing entity backed by well-known investment company Fortress Investment Group sued one of the companies making COVID-19 tests, alleging that such tests infringed its US Patents Nos. 8,283,155 and 10,533,994 (originally owned by embattled diagnostics company, Theranos, Inc.). It sought an injunction from the U.S. District Court for the District of Delaware, to prevent the defendant from developing further tests. While it’s possible that Labrador could have succeeded on the merits of this suit, it faced significant public backlash as soon as the suit was filed, with one commentator calling it potentially “the most tone-deaf IP suit in history.” While Labrador quickly issued a public statement and walked back some of its claims, that statement may not be adequate to remedy the reputational impact of its short-sighted action. Labrador and Fortress quickly offered royalty-free licenses for anyone developing COVID-19 tests, but Labrador maintained the lawsuit against BioFire under the theory that BioFire’s non-COVID-19 testing still infringed these patents.
In the trademark realm, as of April 2, 2020, over 100 applications have already been filed anticipating use of “COVID” or “coronavirus” names – to date, these include such applications as COVID-19, COVID-19 INFECTED, COVID-19 TAKES DOWN COVFEFE, FXCK CORONAVIRUS, and CORONAVIRUS SURVIVOR EST. 2020. Seeking trademark protection in this crisis scenario is not atypical but is a strange choice given that trademarks are awarded where they are used to identify and distinguish an applicant’s goods or services from those of others, or to indicate the source of the applicant’s good(s) or service(s), an inherently unlikely situation here where COVID and coronavirus have become pervasively used terms overnight.
Applications were filed in a variety of classes for a variety of goods and services including fitness or social networking apps, wrist bands, hats, and various clothing items. Nearly all of the pending applications were filed on a 1b intent to use basis, meaning the applicants cannot currently show actual use in commerce of these applied-for marks – no surprise there. In order to maintain an application on a 1b intent to use basis, the applicant must have a bona fide intent to use the marks on the goods or services identified at the time the application was filed, and must submit a sworn statement attesting to that intent. While these ITU marks could possibly survive the initial review phase to a notice of allowance, the applicants would then need to file statements of use (within at most 3 years, if they timely seek extensions every 6 months) in order to convert these applications from intent to use to actual use marks that can be registered. And therein lies the greatest oddity of these applications. Unlike domain names which can be quickly bought and sold, folks warehousing these terms and seeking to profit from trademark ownership have a long road ahead of them: An ITU application cannot be sold off, so filers cannot profit on their reservation of these marks – if ever – until they show actual use to enable registration of the mark.