A blog about patent, copyright and trademark law in the U.S. District Court
for the Southern District of New York

Statutory Damages Awareded and Attorneys' Fees Denied in Copyright Action

In a July 30, 2013 ruling, Judge Paul G. Gardephe adopted in full the Report and Recommendation of Magistrate Judge Freeman awarding plaintiff Rami Shamir $5,000 in statutory copyright damages and denying plaintiff's attorneys' fees.  Shamir had sued a number of related defendants alleging that they had infringed the copyright in his novel "Train to Pokipse" by selling "advanced reading copies" of the book.  The defendants defaulted and largely refused to participate in the proceedings in any meaningful way.  Judge Freeman held an inquest, and in response to Shamir's request for $150,000 in statutory damages, awarded $5,000, noting that the case "'presents a situation of willful infringement, with modes profits to the infringers, at best, and no demonstrable, actual loss to Plaintiff.'"  Judge Freeman declined to award attorneys' fees because ""Plaintiff's unsworn, unauthenticated submission, and non-contemporaneous records, do not substantiate Plaintiff's requested award."  Judge Gardephe, applying a "clear error" standard, ruled that the $5,000 statutory damages award was proper, particularly in light of the defendants' profit of at most $1,200 for the infringing copies.  The Court likewise found the request for attorneys' fees to be insufficiently substantiated.

Federal Circuit Affirms-in-Part and Reverses-in-Part Patent Infringment Ruling

In a July 26, 2013 decision, the Federal Circuit affirmed-in-part and reversed-in-part a ruling by Judge Barbara S. Jones finding infringement of Teva Pharmaceuticals' patents for Copaxone, which is used to treat multiple sclerosis.  The patent claims at issue in the consolidated cases against Sandoz, Inc. and Mylan Pharmaceuticals Inc. had been placed in two groups, Groups I and II, for purposes of the infringement action.  The claims in both groups used the term "molecular weight" without reference specifically to which of the multiple definitions of "molecular weight" was intended.  The defendants argued before Judge Jones that all the claims in Groups I and II were indefinite for failing to specify which "molecular weight" of the active ingredient was referenced.  Judge Jones rejected the indefiniteness argument (and other invalidity arguments), and found all the claims valid and infringed.  The Federal Circuit reversed as to the Group I claims, finding them indefinite and therefore invalid, and affirmed the validity and infringement holding as to the Group II claims.

Patent Infringement Claims Based on ANDA Filing Dismissed as Moot

In a July 18, 2013 ruling, Judge Sidney H. Stein dismissed the patent infringement claims of Purdue Pharma, L.P. against Mylan Pharmaceuticals Inc. and Impax Laboratories over their Abbreviated New Drug Application filings for generic versions of the original formulation of OxyContin.  After the actions were filed, the Food and Drug Administration determined "that original OxyContin had been withdrawn from sale for reasons of safety or effectiveness," eliminating the ability to file an ANDA to market the drug.  Judge Stein then ordered the defendants to show cause why the suits should not be dismissed as moot, and, after considering their perfunctory responses, ruled that there "can be no doubt that Purdue's infringement actions and defendants non-infringement counterclaims are moot."  The Court also considered whether to dismiss the defendants' invalidity claims, noting that the Court "has discretion to decline to exercise jurisdiction over" a declaratory judgment action, "even though the Court has constitutional jurisdiction over that action."  Since Purdue Pharma had already filed separate suits involving the same patents against the defendants over their ANDA's for a reformulated OxyContin, Judge Stein concluded that the defendants would have the opportunity to litigate the invalidity defenses in those actions.  The Court therefore dismissed the infringement counterclaims and declined to exercise jurisdiction over the invalidity claims.

Addition to Infringement Contentions Denied

In a July 17, 2013 ruling, Judge Richard J. Sullivan denied plaintiff Princeton Digital Image Corporations request to add infringement contentions against defendant Hewlett-Packard, Co.  Judge Sullivan cited the standard applied by other Courts in the District -- that "infringement contentions may only be amended to add claims '(1) on stipulation of the parties; (2) upon showing of excusable subsequent discovery of new information; or (3) upon a showing of clearly excusable neglect'" -- and ruled that "Plaintiff has provided no explanation, much less a sufficient one -- for its delayed request." 

Discovery of Doe Defendant's Identity Allowed from ISP in Copyright Infringement Action

In a July 16, 2013 ruling, Judge Edgardo Ramos refused to dismiss copyright infringement claims against a John Doe defendant or to quash a subpoena seeking his identity from an ISP based on his Internet Protocol address.  The plaintiff, Malibu Media, LLC, started an action against 11 John Doe defendants alleging copyright infringement arising from their downloading of Malibu Media's movie, "Leila Last Night," using the BitTorrent protocol. Malibu Media claimed that its forensic expert was able to identify the IP address of eleven computers involved in the BitTorrent download of "Leila Last Night," and moved for expedited discovery and for "leave to file third-party subpoenas on the ISPs of these defendants in order to obtain identifying information."  Judge Ramos severed and dismissed the claims against Does 2 through 11, and granted the motion with regard to Doe 1.  That defendant then moved to dismiss the copyright infringement claim under Rule 12(b)(6), and to quash the subpoena on its ISP.  

Patent Infringement Claims Dismissed on Rule 12(b)(6) Motion to Dismiss

In a July 16, 2013 ruling, Judge Katherine B. Forrest dismissed two patent infringement cases brought by Teva Pharmaceuticals USA, Inc. against Sandoz Inc. and Mylan Pharmaceuticals Inc. under Rule 12(6).  The four patents-in-suit relate to methods of characterizing the active pharmaceutical ingredient in a drug for treating relapsing-remitting multiple sclerosis.  Half of Teva's claims in each complaint related to the defendants' alleged infringement of the patents-in-suit while generating information for their Abbreviated New Drug Applications to make generic forms of the drug, and the other half of the claims were declaratory judgment claims that the defendants would infringe the patents-in-suit in their future production of the drug. 

Judge Gardephe Denies Attorneys' Fees Award

In a July 11, 2013 ruling, Judge Paul G. Gardephe denied the defendant The Bon-Ton Stores, Inc.'s motion for attorneys' fees after its successful motion to dismiss plaintiff Klauber Brothers, Inc.'s breach of contract, and copyright and trademark infringement claims. For the breach of contract claim, Judge Gardephe ruled that an attorneys' fee award is available under the Court's inherent powers where a party has "'acted in bad faith, vexatiously, wantonly, or for oppressive reasons.'"  Finding that Klauber's conduct did not meet that standard, the Court declined to award fees on the breach of contract claim.  Judge Gardephe denied the fee claim under the Copyright Act, holding that "[w]here, as here, a copyright claim is not frivolous or objectively unreasonable, the goals of 'compensation and deterrence' . . . are not furthered in granting an award of attorneys' fees."  Lastly, regarding the trademark infringement claim, the Court noted that attorneys' fees are only available in an exceptional case, and held that while Klauber's theory of standing to assert a trademark infringement claim "was incorrect, there is no evidence that Klauber's Lanham Act claim was brought in bad faith, or as a 'competitive ploy.'"  Judge Gardephe accordingly denied the motion for fees in its entirety.

Summary Judgment Denied on Trademark Infringement and Unfair Competition Claims

In an August 15, 2013 ruling, Judge Paul A. Crotty denied Gogo Sports, Inc.'s motion to dismiss Lifeguard Licensing Corp.'s complaint, including the trademark, unfair competition and false designation of origin Lanham Act claims.  Lifeguard Licensing owns the "Life guard" and "Lifeguard" marks for swim trunks, men's underwear, bags, clothing and accessories.  Lifeguard Licensing does not manufacture goods itself, but licenses others to use its marks.  Defendant Gogo started selling its own "Life Guard San Francisco"-branded goods in 2009.  Lifeguard Licensing engaged in settlement discussions with Gogo, but ultimately did not pursue the matter.  In June 2010, Gogo obtained registration of its marks with the USPTO, and Lifeguard Licensing then started this action in December 2010.

Gogo moved for summary judgment on the trademark claim, contending that there had been an improper assignment in gross of Lifeguard Licensing's marks earlier in the chain of title, that Lifeguard Licensing engaged in naked licensing without adequate quality controls. and that the "Life guard" and "Lifeguard" marks had become generic.  The Court rejected these arguments.  With regard to the assignment in gross, Judge Crotty traced the chain of title of the marks and concluded that each assignment had been accompanied by a transfer of the corresponding goodwill, and the marks were thus not assigned in gross.  The Court also rejected the naked licensing argument, finding that "Gogo fails to present any evidence of Lifeguard's inadequate license supervision," and that, on the contrary, "the record is replete with compelling evidence of Lifeguard's supervision of its marks."  Judge Crotty wrote that in "light of Lifeguard's quality control efforts, the Court finds that it has not abandoned the Lifeguard Marks through naked licensing."

Reliance on Advice of Counsel Need Not be Plead as Affirmative Defense in Trademark Infringement Action

In a July 9, 2013 ruling, Judge George B. Daniels held that "there is no explicit rule that advice of counsel is an affirmative defense that must be pled in one's answer pursuant to Fed. R. Cir. P. 8(c) in a trademark case."  The plaintiff, Bath & Body Works Brand Management, Inc., had started a declaratory judgment against defendant Summit Entertainment, LLC, the producer and distributor of the popular Twilight movies, for a declaration that Bath & Body's "Twilight Woods" and "Twilight Crush" marks did not infringe Summit's "Twilight" marks.  Summit counterclaimed for infringement, and Bath & Body asserted, among other defenses, that its "actions were innocent and non-willful."  In answering Summit's third amended complaint, Bath & Body also asserted as an affirmative defense that Summit's "'counterclaims are barred in whole or in part by the doctrine of advice of counsel.'"

Court Dismisses Contributory Copyright Infringement and Fraud Claims

In a July 2, 2013 ruling, Judge J. Paul Oetken dismissed certain claims asserted by individual plaintiffs in three consolidated actions alleging copyright infringement, fraud, fraudulent concealment and breach of contract against defendant John Wiley & Sons, Inc. and two of its employees. Although their claims varied somewhat, the plaintiffs collectively essentially alleged that Wiley used their photographs in Wiley publications in ways that violated the scope of their licenses to Wiley, thus constituting copyright infringement. One plaintiff also asserted that the two individual defendants were responsible for the infringement, and all plaintiffs made claims about fraudulent statements or fraudulently concealed facts about the extent of Wiley's use of the photographs. Judge Oetken declined to dismiss the copyright infringement claims against Wiley, but did dismiss the infringement claims against the individual defendants. As to the infringement claims against the individuals, the Court noted that the only allegation in support of the claim was that the individuals "personally participated in Wiley's infringements and had knowledge, information, and control over such infringement." Judge Oetken ruled that the claim is insufficient because the plaintiff "has failed to state any fact-based allegations indicating that [the individuals] authorized, or played any part at all in the alleged infringement itself, as opposed to Wiley's conduct after the infringement."  The Court dismissed the fraudulent concealment and fraud claims as insufficiently specific under Rule 9(b), and dismissed the fraud claims on the further ground under Rule 12(b)(6) that plaintiffs did not allege any damages arising from the fraud that were different from the alleged copyright infringement damages.  The Court specifically rejected cases from other jurisdictions that did not insist so strictly on independent damages to state a fraud claim in this context.

Attorneys' Fees Denied After Dismissal for Lack of Personal Jurisdiction in Copyright Infringement Case

In a June 27, 2013 ruling, Judge Ronnie Abrams denied defendant American Buddha's motion for attorneys' fees after it secured dismissal of Penguin Group (USA), Inc.'s copyright infringement claim against it for lack of personal jurisdiction. Judge Abrams first noted that the "Second Circuit has not directly addressed whether the dismissal of claims against a defendant for lack of personal jurisdiction renders it a 'prevailing party' for purposes of § 505," the provision of the Copyright Act addressing an award of attorneys' fees. The Court did not have to reach that issue, though, because Judge Abrams held that "even if Defendant is deemed a prevailing party, an award of attorney's fees is not warranted in this case." In declining to find Penguin's allegation of personal jurisdiction objectively unreasonable (so as to support an award of fees), Judge Abrams found:

Motion to Protect Anonymity of Doe Defendants in Trademark Infringement Action Denied

In a June 26, 2013 ruling,Judge Lorna G. Schofield denied a motion by certain Doe defendants to protect their anonymity under the First Amendment in the face of claims that their blog posts infringed plaintff Bloomberg, L.P.'s trademarks. The blogs at issue were hosted by blogger.com and blogspot.com, which are owned by Google, Inc. Soon after filing the action, Bloomberg moved for expedited discovery and for leave to serve subpoenas on Google to discover the identity of the bloggers. The Court granted the motion, and the two Doe defendants then moved for reconsideration and to quash the subpoenas. Judge Schofield ruled that she lacked the power to quash the subpoenas because they had been issued in the Northern District of California, not the Southern District.

Magistrate Recommends Against Contempt Finding in Counterfeit Action

In a June 24, 2013 ruling, Magistrate Judge Michael H. Dolinger recommended against a contempt citation for defendant DealExtreme for supposedly violating a preliminary injunction that plaintiff Klipsch Group, Inc. obtained prohibiting counterfeiting of its high-end headphones. DealExtreme was one of some 20 defendants that Klipsch sued for counterfeiting. After receiving a copy of the ex parte TRO that Klipsch had obtained, DealExtreme conducted an internal investigation, and found that its website had facilitated the sale of counterfeit products. It cooperated with Klipsch in providing information about those sales, and the Court converted the TRO into a preliminary injunction. Klipsch subsequently accused DealExtreme of violating the injunction, and moved for "contempt seeking both coercive and compensatory sanctions, including damages, costs and attorneys' fees associated with Klipsch's motion."

Interlocutory Appeal Denied in Copyright Action

In a June 21, 2013 ruling, Judge Richard Sullivan denied defendant Redigi Inc.'s motion to certify an interlocutory appeal of Judge Sullivan's grant of partial summary judgment on plaintiff Capitol Records LLC's copyright claim. After first noting that Redigi's three month delay in filing the motion weighs against the request, the Court found that the issue Redigi intended to appeal -- whether Redigi violated Capitol's exclusive right of reproduction and distribution -- was no a "'controlling' question of law," nor "a matter of pure law." In denying the motion, Judge Sullivan also found that the intended appellate issue was not "an ephemeral matter" needing immediate review, and noted that the issue "will not escape review at the conclusion of this litigation."
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