Archive for November, 2013

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Does Use of a Certification Mark Constitute an Express Warranty?

November 26th, 2013

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Unlike ordinary trademarks, which indicate the commercial source of a product, certification marks communicate to the consumer that the products to which they are affixed meet certain manufacturing or quality standards.

One question that flows from this quality communication function is whether a manufacturer that affixes a certification mark to a product, by doing so, expressly warrants that the product meets the standards signaled by the certification mark.

This legal issue has begun to split the courts in the context of the Energy Star certification program for energy efficient appliances.  In the last year or so, an Ohio federal court dismissed a plaintiff’s express warranty claim based on affixation of the ENERGY STAR logo to a washing machine while a California federal court allowed a similar claim involving refrigerators to move forward.

The defendant was Whirlpool in both cases.  In the Ohio case, Savett v Whirlpool Corporation, the defendant moved to dismiss all of plaintiff’s claims, including a breach of express warranty.

The court granted Whirlpool’s motion on that claim because it found the ENERGY STAR logo does not in itself affirm any fact or promise:

[T]he Court finds that plaintiff fails to allege the existence of an express warranty because use of the ENERGY STAR logo is not an “affirmation of fact or promise” as alleged in this case . . . . the logo itself contains no assertion of fact or promise.  Unlike traditional express warranties where unambiguous promises or factual assertions are made, which are clearly understood on their own footing, any meaning conveyed by the logo requires independent knowledge.

The court also noted the lack of any precedent “in which a logo has . . . been held to constitute an express warranty.”

Contrast that with Dei Rossi v. Whirlpool Corporation, decided by the U.S. District Court for the Eastern District of California.  This case, discussed in a recent post, came out the other way.

The California court denied Whirlpool’s motion to dismiss the express warranty claim, holding that it was satisfied by affixation of the ENERGY STAR certification mark to the refrigerators.  This act by Whirlpool conferred a specific and express warranty because it communicated that the products met the Energy Star requirements:

Although Defendant alleges that this logo does not confer a specific and express warranty, Defendant does not provide any reason for affixing this logo to the product other than to signify that the product meets the Energy Star specifications.  Simply put, the Court cannot fathom any other reason for affixing the logo in such a manner. . . if Defendant’s intention was simply to signify that the product was energy efficient, it could have done so without affixing the Energy Star certification logo.  Thus, the Court finds that affixing this logo to the product satisfies the definition of an express warranty . . .

The court further found that the Plaintiffs adequately pleaded the exact terms of the warranty because the complaint noted that the Energy Star certification required the refrigerators to be at least 20% more efficient than minimum standard models.

Which is the better answer to this legal conundrum?  We may find some guidance by attempting to reconcile the conflicting results in these two cases.

It should be noted initially that we can’t reconcile these decisions based on any differences in the express warranty statutes in Ohio and California; the salient provision in each state is identical:

Any affirmation of fact or promise made by the seller to the buyer which relates to the goods and becomes part of the bargain creates an express warranty that the goods shall conform to the affirmation or promise.

One key factual difference is that the Ohio plaintiff apparently did not see the ENERGY STAR logo on the product or understand its meaning.  The Ohio court noted this in footnote 8 of its decision, stating it is notable that “plaintiff does not allege that he saw or understood any purported meaning of the logo.”

The California court did in fact distinguish its decision, at least in part, on this basis:

[U]nlike the plaintiff in Savett, in the instant case Plaintiffs have alleged that they independently understood the meaning of the logo and relied on it in deciding to purchase the products.

Ultimately, however, where a court comes out on this issue seems to depend on whether it attaches more importance to the motive of the manufacturer or the motive of the consumer.  That is, the California court found the manufacturer’s intention in affixing the ENERGY STAR logo to the product was to communicate that it meets the Energy Star specifications.

The Ohio court, by contrast, seemed swayed by the knowledge and purpose of the consumer, noting that “any meaning conveyed by the logo requires independent knowledge,” which the plaintiff in the suit notably lacked.

To be sure, there are a number of other causes of action consumers can bring against manufacturers that don’t satisfy green certification standards as advertised.  Nevertheless, I’m sure we’ll see more case law on this issue as green certification marks continue to proliferate and influence the purchasing decisions of environmentally conscious consumers.

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NanoH2O’s Patented Particular Membranes Improve Economics of Desalination

November 22nd, 2013

NanoH2O is a Los Angeles-based startup that has developed a new membrane material for use in reverse osmosis (RO) desalination.  While RO is an established technology, its economic viability hinges on the properties and performance of the membrane.

NanoH2O’s CEO, quoted in this Greentech Media article, put it this way:  “A more productive membrane allows less energy to be used and provides higher throughput.”

The company owns at least five U.S. patents and applications relating to its membrane technology, which uses nanomaterials to boost permeability.  This is important because a more permeable membrane allows more fresh water through with less pressure from an energy-driven pump.

U.S. Patent No. 8,177,978 (‘978 Patent) is entitled “Reverse osmosis membranes” and directed to reverse osmosis membranes incorporating nanoparticles and processes for preparing the membranes.  In different embodiments, the nanoparticles are incorporated into various layers of the membrane.

In Figure 1 of the ‘978 Patent, RO membrane (10) has nanoparticles (16) dispersed in the aqueous phase layer (14) on the upper surface of the support membrane (12).  The organic phase layer (18) interacts with the aqueous layer (14), and polymerization occurs at the interface of these two layers.

According to the ‘978 Patent, the nanoparticles release metal species, resulting in improved fouling resistance and increased flux:

In some embodiments, nanoparticles may be selected for their ability to release metal species such as alkaline earth or aluminum ions. Such particles may be dispersed within either the aqueous layer 14 or the organic phase layer 18, or both. Additional nanoparticles may also be present to impact surface properties or further increase performance, for example to improve fouling resistance. . . .By dispersing aluminum releasing nanoparticles 16 in the aqueous or polar solvent 14 and/or organic phase layer 18 before interfacial polymerization, increased flux is often observed, especially when nanoparticles 16 are processed to enhance solubility of metal ions.

The membrane (10) shown in Figures 2-4 has nanoparticles or other insoluble carriers (16) in difference locations, i.e., in the organic phase / layer (18), in both the aqueous layer (14) and the organic layer (18), and/or in a layer between the aqueous layer (14) and the support membrane (12).

In one embodiment, RO membrane (10) has nanoparticles (22) in the fabric layer (20) that forms the backing of the membrane, making the backing more mechanically robust so it can be made thinner than conventional backings.  There are also nanoparticles (16), which may be the same or different from nanoparticles (22), in the discrimination layer (24).

According to the Greentech Media piece, NanoH20 plans to build a manufacturing facility in China, where its desal technology is badly needed.

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Solar Surge: CEPGI Q2 Report Shows Solar Patents in Top Spot

November 19th, 2013

The Clean Energy Patent Growth Index (CEPGI) recently released its Second Quarter 2013 Results.  Researched and published by the Heslin Rothenberg law firm, CEPGI is a quarterly report on green patents issued in the United States.

CEPGI has been tracking green patent trends by technology sector, assignee, and geography since 2002.  Throughout all of that time, fuel cell patents have topped the charts for every single quarter.

The big news in the Q2 2013 results is that solar patents beat out fuel cell patents for the first time, surging ahead with a jump of 29 granted patents relative to the first quarter of the year.  All told, there were 246 solar patents granted in the second quarter, with fuel cell patents in second place at 209.  Year-on-year, solar patents were up 35.  According to CEPGI:

Solar patents’ quarterly win makes clear that innovation in this sector continues at a rapid pace despite the failures and consolidations of solar firms across that board that dominate cleantech media reports.

Wind patents were in third place with 141, and hybrid-electric vehicles took fourth place with 94 patents granted in the quarter.  Biofuel/biomass patents dropped one from the first quarter to 47 while tidal patents were up three to 22.

The top green patentee for the second quarter was Toyota, which had 48 patents granted, mostly in the field of fuel cells.  General Motors was in second place with 45 granted green patents, 35 of which were fuel cell patents.  On the strength of 22 wind patents, General Electric was in third place with 26 granted patents, while Samsung took fourth place with 22.  The rest of the top ten included Honda, Ford, Mitsubishi, Siemens, Hyundai, and SunPower.

CEPGI also breaks out its data by jurisdiction, looking at the countries and individual U.S. states of green patentees.  Japan was the Q2 leader with 147 green patents granted.  California took second place with 86 patents, followed by Michigan (72), Korea (51), and Germany (39) in the top five.  New York and Taiwan each had 35 granted green patents in the second quarter, followed by Texas, Massachusetts, Denmark, Colorado, France and Canada.

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Whirlpool Fridge Decision Provides Guidance for Future Certification Mark Greenwash Cases

November 16th, 2013

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I’ve written before about the important role of certification marks in green branding, and a recent California district court decision involving the Energy Star certification highlights their continued significance.

The Energy Star program seeks to aid investment in energy efficient products by providing information that consumers and investors can use to research and compare green product or project choices. 

The U.S. Environmental Protection Agency (EPA) works with the U.S. Department of Energy and manufacturers to award the ENERGY STAR certification to products that meet particular energy savings standards.

Named plaintiffs Kyle Dei Rossi and Mark Linthicum brought a class action lawsuit against Whirlpool for selling refrigerators bearing the Energy Star logo that were later determined not to comply with the Energy Star requirements and were disqualified from the program.

The complaint, filed in the Eastern District of California, alleged that Whirlpool’s misrepresentations that the refrigerators met the Energy Star guidelines was a breach of the products’ express warranty and implied warranty of merchantability, a violation of the federal Magnuson-Moss Warranty Act, the California Consumer Legal Remedies Act (CLRA), California Unfair Competition Law (UCL), and California False Advertising Law.

Whirlpool moved to dismiss the complaint, and a recent court decision granting the motion in part and denying it in part provides helpful guidance on which causes of action effectively support greenwashing claims in connection with certification mark abuse.

Perhaps the most significant portion of the decision is the court’s holding that the express warranty claim was satisfied by affixation of the Energy Star certification mark to the refrigerators.  This act by Whirlpool conferred a specific and express warranty because it communicated that the products met the Energy Star requirements:

Although Defendant alleges that this logo does not confer a specific and express warranty, Defendant does not provide any reason for affixing this logo to the product other than to signify that the product meets the Energy Star specifications.  Simply put, the Court cannot fathom any other reason for affixing the logo in such a manner. . . if Defendant’s intention was simply to signify that the product was energy efficient, it could have done so without affixing the Energy Star certification logo.  Thus, the Court finds that affixing this logo to the product satisfies the definition of an express warranty . . .

The court further found that the Plaintiffs adequately pleaded the exact terms of the warranty because the complaint noted that the Energy Star certification required the refrigerators to be at least 20% more efficient than minimum standard models.

Whirlpool did succeed, however, in convincing the court that the breach of implied warranty of merchantability claim should be dismissed.  There, the test is whether the refrigerator could serve its ordinary purpose, and there was no allegation that the refrigerators at issue failed to properly refrigerate. 

The federal Magnuson-Moss Warranty Act requires the plaintiff to show that the performance of the product was guaranteed over a specific time period.  The court dismissed this claim because the Energy Star logo does not in itself express or denote a time period.

The court allowed Plaintiffs’ California CLRA claim to go forward because the complaint alleged that Whirlpool knowingly mislabeled the refrigerators and therefore may have either intentionally misrepresented the energy efficiency of the products or intentionally labeled them with information it had not verified as accurate.

The UCL claim also survived the motion to dismiss for the same reason, i.e., that the allegation of knowingly mislabeling the products could support a claim under the fraudulent acts or promises prong of the UCL.  In addition, the failure to meet the Energy Star standards meets the law’s unfair practice prong.

Finally, the court denied Whirlpool’s motion as to Plaintiffs’ California state false advertising claim.  The court held that the numerous pages of Energy Star advertisements used by Whirlpool cited in the complaint and the specific instances described in which Dei Rossi and Linthicum saw the Energy Star logo on the inside of refrigerator products at retail stores sufficed to support the claim.

Lawyers selecting and pleading various federal, state, and common law claims in greenwashing cases, particular those involving certification mark abuse, would be wise to read this decision.

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Article Distinguishes Green “Tech” IP and Green “Non-Tech” IP

November 12th, 2013

A recent article written by Jonathan M.W.W. Chu and published in the Washington and Lee Journal of Energy, Climate, and the Environment takes another look at the role of intellectual property in green technology innovation.

Entitled “Developing and Diffusing Green Technologies:  The Impact of Intellectual Property Rights and their Justification,” the piece covers much familiar ground including discussions of the meaning of green technology and traditional justifications for IP protections.

The article also touches on many green IP and climate change topics previously explored in more detail elsewhere such as the notion of technology as the solution to global warming, access to green technologies, international transfer of green technologies, and green patent fast track programs.

The main contribution of this piece is to break down green IP into what Chu calls “Technological IP” and “Non-Technological IP,” a division he draws from the TRIPS Agreement and an IP and climate change book by Professor Matthew Rimmer. 

According to the article, Technological IP are rights in green technology, including patents, copyright in software code, semiconductor chip protection, trade secrets and know-how, while Non-Technological IP are rights in relation to green technology, such as trademarks around such technologies (what I call eco-marks), design rights, and other copyrights.

Chu posits that the two categories of green IP have different impacts on development and diffusion of green technologies. 

On Technological IP and patents, the article stipulates that continued innovation will lead to lower costs but says “the more immediate and direct impact” of patents “still appears to negatively impact diffusion of the technology.” 

More particularly, the article concludes that we are heading toward situations in which green patents will block key technologies:

[W]ith green technologies becoming more refined and focused, the narrowing of available technologies will increase the likelihood of a patent covering and controlling a single technology.

On the one hand, Chu may be right that continuing incremental improvements could result in patents that cover a “single” technology.  On the other hand, would that really be a problem? 

For a very focused, and presumably narrow, patent the ability to control that patented technology means little when there are older, broader related technologies out there.  Also, the narrower and more focused a patented invention is, the easier it is to design around it.

The piece also cites copyrights on “Green Operation Software” necessary for operation of green technologies as an example of Technological IP that could hinder their development and diffusion. 

Chu may be on firmer ground here, and the AMSC-Sinovel civil litigation in China and criminal case in the United States (see, e.g., here and here) involving software code for wind turbine control systems demonstrate the impact such copyrights can have in the clean tech industry.

On the other hand, copyrights in software protect only the specific code sequences, which can be written in different non-infringing ways to achieve the same functionality.

The article discusses green brands, including trademarks and certification marks, and concludes that they are having a positive impact on diffusion of green technologies.  On this score, the piece notes that trademark rights translate into revenue (but so do patent rights, I would add) that can be used for further R&D, and the associated marketing is necessary for the diffusion of innovation.

I agree that certification marks such as ENERGY STAR are largely positive and effective in promoting green innovation by rewarding manufacturers that meet energy efficiency standards and aiding sales of products that lead to energy savings.

The article’s treatment of design rights is thin and conclusory, positing that they “should not pose any serious hurdle” to green tech innovation.  The piece would have benefitted from a more thorough and balanced discussion on this, including consideration of design patent litigation, such as the expensive battle between Nichia and Seoul involving four LED design patents, which included allegations of antitrust violations.

One need only look at the Apple-Samsung smartphone wars to understand that design patent rights can be very powerful.

While it could have been developed further, I like this article’s treatment of green IP as bifurcated into Technological IP and Non-Technological IP.  It provides an interesting prism through which to view green IP and its role in green innovation.

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Clean Tech in Court: Green Patent Complaint Update

November 8th, 2013

A number of green patent complaints have been filed in the last several weeks in the areas of biofuels production, recycled food service products, LEDs, reusable diapers, water conservation, and gas conversion technology.

 

Biofuels

Novozymes A/S v. Boli Bioproducts USA, LLC

Filed September 11, 2013 in U.S. District Court for the Eastern District of Missouri, Danish corporation Novozymes’ complaint accuses Boli Bioproducts, a Missouri company, of infringing U.S. Patent No. 6,255,084 (‘084 Patent).

The ‘084 Patent is entitled “Thermostable glucoamylase” and directed to an isolated glucoamylase enzyme which has higher thermal stability than prior glucoamylases.  The patent also claims starch conversion processes using the enzyme. 

The accused product is a glucoamylase enzyme called BOLI GA 130, used for producing glucose from starch in fuel ethanol production and other industrial processes.

 

Recycled, Compostable Food Service Products

Eco-Products, Inc. v. World Centric

Eco-Products, a Boulder, Colorado, company that makes food service products such as cups, containers, plates, and utensils, from renewable and recycled resources, has asserted four design patents against competitor World Centric.

The patents-in-suit are U.S. Patent Nos. D688,552, D684,050, D684,465 and D684859, each entitled “Food container.”

The complaint, filed September 11, 2013 in the U.S. District Court for the District of Colorado, alleges that World Centric’s “Fiber Compost-A-Pack” product infringes the asserted patents.

 

Reusable Diapers

Kanga Care LLC v. GoGreen Enterprises LLC

In this lawsuit between Colorado competitors in the reusable diaper space, Kanga Care sued GoGreen Enterprises for alleged infringement of U.S. Patent No. 8,425,483 (‘483 Patent).

The ‘483 Patent is entitled “Double gusset cloth diaper along with method for making the same” and directed to a reusable diaper including an exterior panel having a surrounding outer edge margin, an interior panel comprising micro-chamois material and joined to the outer edge margin, and an absorbent pad removably insertable between the interior and exterior panels.

The patented diaper has a first gusset diaper to form a first seal between the inner surface and the legs of the user and a second gusset attached proximate the first gusset.

Kanga Care’s complaint was filed October 11, 2013 in the U.S. District Court for the District of Colorado, and the accused produts are GoGreen’s Champ cloth diapers using dual gusset technology.

 

Water Conservation

D.S. Magic Tech LLC v. Green Light Energy Conservation LLC

D.S. Magic Tech, a New York corporation that installs and distributes water conservation products, sued Green Light for alleged infringement of U.S. Patent No. 8,511,347 (‘347 Patent).

The ‘347 Patent is entitled “Tamper-resistant water flow restriction system” and directed to a flow restrictor assembly and method for installing the assembly in a  shower.  The invention prevents tampering by concealing the flow restrictor assembly behind a shower wall, attached directly to a water supply line.

The complaint was filed in federal court in Brooklyn, New York on October 8, 2013, and accuses Green Light of selling flow restrictor assemblies and related services that infringe the ‘347 Patent.

 

Gas Conversion

Sasol North America, Inc. v. GTLpetrol LLC

Sasol North America (Sasol) is a Houston corporation, and part of South African company Sasol Technology.  Sasol designs and operates gas-to-liquid (GTL) plants for converting natural gas to higher value liquid hydrocarbons such as diesel.

On October 3, 2013 Sasol filed a declaratory judgment action in federal court in Houston, Texas for a judgment that it does not infringe U.S. Patent No. 6,534,551 (‘551 Patent), to which GTLpetrol has license rights, and that the ‘551 Patent is invalid.

‘The ‘551 Patent is entitled “Process and apparatus for the production of synthesis gas” and directed to a process for the production of synthesis gas from a hydrocarbon fuel and steam and/or oxygen where at least part of the required steam is provided by heat exchange against exhaust gas from a gas turbine driving an air separation unit (ASU), and the ASU supplys at least part of the oxygen.

According to the complaint, GTLpetrol met with Sasol about the possibility of partnering on construction of a GTL plant in the United States, but Sasol was unimpressed with the smaller company’s technology proposals and eventually terminated discussions.

Almost two years later, the complaint says, GTLpetrol sent Sasol a cease and desist letter referring to the ‘551 Patent and alleging misappropriation of trade secrets.  That letter led to this lawsuit by Sasol.

 

LEDs

Nichia Corporation v. Everlight Electronics Co.

On September 11, 2013 Nichia sued Everlight Electronics in federal court in Marshall, Texas for alleged infringement of U.S. Patent No. 7,432,589 (‘589 Patent).  The complaint alleges that Everlight’s LED model 61-238/RSGBB7C-B02/ET infringes the ‘589 Patent.

The ‘589 Patent is directed to a semiconductor device capable of preventing an adhesive for die bonding from flowing to a wire bonding area.  The semiconductor device includes a housing wherein the wall is formed to extend across the bottom surface of a recess so as to divide the surface of the first lead electrode into a die bonding area and a wire bonding area.

This is not the first lawsuit between these LED rivals (see, e.g., here).

 

Trustees of Boston University LED lawsuits

Boston University launched a huge series of patent infringement lawsuits on September 20, 2013 in federal court in Boston.  There are about 35 new suits – too many to list and upload all the complaints, though they are all very similar and all assert the same patent.  Here are a couple of exemplary complaints:  BU – Acer Complaint; BU – Canon Complaint.

The patent in these suits is U.S. Patent No. 5,686,738, entitled “Highly insulated monocrystalline gallium nitride thin films” and directed to gallium nitride semiconductor devices and methods of preparing highly insulating GaN single crystal films in a molecular beam epitaxial growth chamber.

Other defendants include AU Optronics, BlackBerry Corporation, Dell, Fujifilm, HTC, Eastman Kodak, Olympus, Sharp, and Sony.  The accused products include digital cameras, smart phones, and other personal electronic devices.