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

Court Declines to Modify Permanent Injunction Against Infringement to Permit Defendant's Redesign

In an August 29, 2013 decision, Judge Robert W. Sweet denied defendant Green Project, Inc.'s Rule 60(b) motion to modify the consent permanent injunction obtained by plaintiff Canon, Inc. to allow Green Project to produce a product that it claimed designed around Canon's patent.  Judge Sweet denied relief, writing that as "in analogous cases where district courts have denied motions that 'would amount to an impermissible advisory opinion,' Green Project inappropriately seeks a pre-approval of its future behavior, namely, selling its redesign."  The Court also noted that "[e]ven if Rule 60(b) relief were appropriate, Green Project has not provided sufficient evidence to conclude that its redesign does not infringe any claims of" Canon's patents," particularly since its non-infringement contentions were based on attorney argument rather than expert testimony.  Judge Sweet concluded that Green Project's "motion is thus inadequate, and an inappropriate procedure, for determining issues of infringement."

Court Declines to Strike Patent Infringement Affirmative Defense of Prosecution History Estoppel as Inadequately Pled

In an August 30, 2013 ruling, Judge Alvin K. Hellerstein denied plaintiff Alcorn Communications, LLC's motion to strike defendant Marketwire, Inc.'s patent infringement affirmative defenses of prosecution history estoppel and/or prior art finding that "these allegations are too important, and too conclusory, to be answered, but no answer to an affirmative defense is required."  The Court, however, cautioned that "without greater specificity, no discovery will be allowed with respect to this defense, and the defense is likely to be stricken before trial."

Court Grants Summary Judgment of Patent Non-Infringement and Denies Invalidity Motion as Moot

In an August 29, 2013 ruling, Judge P. Kevin Castel granted the motion of Google, Inc. and Facebook, Inc. for summary judgment of non-infringement, and denied their motions for summary judgment of invalidity.  The patents-in-suit "disclose methods and systems which allow users without web programming skills to create mobile websites with personally-authored content for display on mobile devices."  The plaintiff, Wireless Ink Corporation, sued for patent infringement over the Google and Facebook websites, alleging literal infringement and infringement under the doctrine of equivalents. 

With regard to literal infringement, the Court noted that it "requires that every limitation recited in the asserted claim appear in the accused device or method. . . . Therefore, if even one limitation is not present in the accused product, there is no literal infringement."  Judge Castel then reviewed the evidence of infringement proffered by Wireless Ink in response to the summary judgment motions, and concluded that Wireless Ink had failed to come forward with evidence from which a reasonable fact-finder could find that all the claim limitations in the asserted claims in the patents-in-suit are present in the Google and Facebook websites.  In response to several of Wireless Ink's infringement arguments, the Court noted that Wireless Ink did not dispute the facts proffered by defendants but merely argued claim interpretation and ruled that where "'as here, the parties do not dispute any relevant facts regarding the accused product but disagree over which of two possible meanings of Claim 1 is the proper one, the question of literal infringement collapses to one of claim construction ans id thus amenable to summary judgment.'"  The Court adhered to its original claim construction ruling, and granted judgment in favor of Google and Facebook.  Judge Castel also dismissed Wireless Ink's claims under the doctrine of equivalents, writing that Wireless Ink conceded that it had "offered no evidence to support a theory of infringement under the doctrine of equivalents."

Court Denies Defendant's Motion for Reconsideation of Claim Construction Ruling

In an August 27, 2013 ruling, Judge Alison J. Nathan denied defendant T-Mobile USA, Inc.'s motion for reconsideration of the Court's earlier claim construction ruling.  Judge Nathan noted that "Defendant has failed to meet the motion for reconsideration standard," but the Court nevertheless considered T-Mobile's arguments and found them meritless.  One of T-Mobile's contentions, presented in the motion for reconsideration for the first time was that the preamble of the claim at issue "should be read to limit claim scope because the claim does not make sense without any preamble."  The Court rejected this argument, writing that "most claims would not make sense without any preamble, yet the Federal Circuit has instructed that 'generally' preambles do not limit claim scope."  Judge Nathan also concluded "that the claim is understandable without considering the preamble as a limitation, and that the claim body independently and fully describes a coherent device without any limitation imposed by the preamble."  The Court considered and rejected T-Mobile's remaining three arguments, and denied reconsideration.

Court Finds That Federal Circuit's Akamai Decision Did Not Change Law of Direct Patent Infringement

In an August 26, 2013 ruling, Judge Deborah A. Batts denied reconsideration of the Court's ruling dismissing plaintiff Edwin Lyda's patent infringement claim against Fremantlemedia North America, Inc.  Lyda argued that the Federal Circuit's decision in Akami Techs, Inc. v. Limelight Networks, Inc., 692 F.3d 1301 (Fed. Cir. 2012), which overruled in part BMC Resouces Inc. v. Paymentech, L.P., 498 F.3d 1373 (Fed. Cir. 2007) relied on in the Court's original ruling, warranted reconsideration.  Akamai and BMC, however, both deal with induced infringement, and Lyda's claim was based on direct infringement.  Judge Batts ruled that Akamai did not overrule the portion of BMC on which she relied in her earlier decision, and that the Akamai decision "consciously avoided ruling on direct infringement."  Thus, Judge Batts found that "Akamai did not change the law of direct infringement, and it is, therefore, not relevant to the Court's prior decisions."

Court Holds that Mere Registration of Domain Names Does Not Constitute "Use in Commerce" Under the Lanham Act

In an August 26, 2013 ruling, Judge Deborah A. Batts granted in part defendants' motion to dismiss Courtalert.com, Inc.'s complaint asserting. Courtalert.com and defendant e-law.com both supply alerts about court filing to lawyers and others users.  Courtalert.com alleged that e-law.com registered five domain names incorporating Courtalert.com's trademarks in full.  e-law.com cancelled the domain names following Courtalert.com's objection, but Courtalert.com sued anyway, asserting five Lanham Act claims (trademark infringement, unfair competition, false designation of origin, cybersquatting and dilution), and a state unjust enrichment claim.

The Court dismissed the trademark infringement claim, holding that Courtalert.com had failed to allege use of the infringing marks in commerce.  Judge Batts noted that there are circumstances under which a defendant's use of a mark can satisfy the "use in commerce" standard if it has an impact on the plaintiff's commercial activities, but found that Courtalert.com's complaint did not claim such use.  In particular, Judge Batts wrote:
The Complaint does not claim, for instance, that when typed into the address bar, any of the five domain names at issue directs visitors to Defendants' commercial website.  Nor does Plaintiff allege that the domains names, when typed in, lead users to information opposing Plaintiff's products or service.  In fact, Plaintiff does not allege that any message at all results when the domain names are typed in.  As such, a critical component of the "classically competitive" behavior is missing here, and Defendants' behavior seems to amount to nothing more than mere registration of a domain name.

Court Applies Injury Rule, Rather than Discovery Rule, to Accrual of Copyright Infringement Claim

In an August 21, 2013 ruling, Judge Loretta A. Preska granted in part and denied in part defendants' motion for summary judgment on statute of limitations grounds in plaintiff Muench Photography, Inc.'s copyright infringement claims.  The parties agreed "that the principal question of law at issue with respect to whether certain of plaintiff's claims are time-barred is when a copyright infringement claim accrues under the three-year statute of limitations in the Copyright Act, 17 U.S.C. § 507(b)."  The two accrual possibilities are when the injury occurred or when it was discovered.  According to the Court, prior Second Circuit law strongly indicated that the discovery rule applied, but the Supreme Court's decision in TRW v. Andrews, 534 U.S. 19 (2001) required reassessment that position.  Judge Preska surveyed the split of authority in the District on the issue, and joined "what is now the majority approach in this jurisdiction in adopting the injury rule for the purposes of evaluating whether copyright infringement claims are time barred."  Applying the injury rule, Judge Preska found some of Muench's claims time barred, and allowed others to proceed.

Dismissal of False Designation of Origin Claim Denied

In an August 19, 2013 ruling, Judge Thomas P. Griesa denied defendants' motion to dismiss plaintiff Pop Bar, LLC's complaint, including a Lanham Act unfair competition claim.  Pop Bar makes and sells customizable Italian gelato, sorbet and frozen yogurt on a stick under its Popbar and Popbar system marks, and licenses others to do the same.  The defendant, Hip Pops, LLC, approached Pop Bar about becoming a franchisee, and signed a confidentiality agreement before receiving Pop Bar's "recipes and formulas, specially designed equipment, systems and methods of making customized Popbar products, and ideas for Popbar food trucks."  Negotiations then broke down under circumstances that Pop Bar contended show that Hip Pop never intended to enter into a deal with Pop Bar, and merely acted as if it would do so to gain access to Pop Bar's confidential information.  Hip Pop subsequently introduced competing products under the HipPOP mark.  Pop Bar sued, asserting a variety of claims, including false designation of origin under the Lanham Act.

Court Dismisses in Part Lanham Act Claims for Lack of Standing, Permissible "Gray Goods"

In an August 15, 2013 ruling, Judge Ronnie Abrams granted the cross motions for partial judgment of plaintiff L'Oreal USA, Inc. and defendant Trend Beauty Corp. in L'Oreal's action alleging Lanham Act and state law claims against Trend Beauty.  Trend Beauty was an unauthorized wholesaler of L'Oreal's luxury fragrances.  L'Oreal claimed that "Trend Beauty's unauthorized sale of counterfeit and 'decoded' L'Oreal fragrances in the 'gray market' interfered with L'Oreal's ability to control the quality of its products," and that "the counterfeit and decoded products materially differed from L'Oreal's 'coded' products so as to constitute . . . trademark and trade dress infringement."  The "coding" refers to quality assurance, security and Universal Product Code codes that L'Oreal places on its products.  A "decoded" product is one for which one of the codes have been removed, such as the fragrance bottle has been removed from its outer box.  Trend Beauty admits that it sold decoded L'Oreal products, and further admitted that it sold about 200 units of counterfeit product, but disputes that it knew or should have know that the product was counterfeit.

As a threshold matter, Judge Abrams considered whether L'Oreal, as a licensee of the marks at issue, had standing to assert trademark infringement, and concluded that L'Oreal did not have standing.  The Court noted that "L'Oreal only has standing to bring its trademark infringement claims if it qualifies as a legal representative or assignee of the registrants."  The Court rejected the argument that L'Oreal was the assignee of the marks based on the factual record, and then considered whether L'Oreal is the "legal representative" of the owners of the marks.  Judge Abrams relied on recent a Second Circuit case addressing the issue as a matter of first impression, and ruled that the term requires "a party to show that it 'has the authority to appear on behalf of the registrant/owner with respect to the registrant/owner's legal interests and the registrant/owner is unable or incapable of representing itself and enforcing its own rights.'"  The Court applied this standard, and concluded that L'Oreal was not the registrant's legal representative.  Judge Abrams rejected L'Oreal's dilution claims under 15 U.S.C. § 1125(c) on the same ground.

Court Declines to Dismiss Copyright Infringement Claim Based on Covenant-Condition Doctrine

In an August 15, 2013 ruling, Judge Loretta A. Preska refused to dismiss plaintiff Muench Photography, Inc.'s copyright infringement claims against defendant The McGraw-Hill Companies, Inc.  Muench owns copyrights in various photographs that it licensed to McGraw-Hill (through a third party agency) for a limited, specified number of uses in McGraw-Hill publications.  Muench alleged that McGraw-Hill deliberately exceeded the number of permissible copies of the licensed photographs, breaching the terms of the license and infringing Muench's copyrights.  McGraw-Hill argued that under the terms of the license, it effectively had "'carte blanche permission to use [the Photographs] any way it chose and pay later.'"  Thus, according to McGraw-Hill, the plaintiff "is precluded under the covenant-condition doctrine from suing for copyright infringement."  The Court rejected that argument, noting that Muench .
sets forth in the [second amended complaint] that the relevant Photographs were licensed for up to a specific number of uses, and Plaintiff explicitly claims that Defendant, without authorization, used photographs with copyrights registered to Plaintiff beyond the licenses granted both in publications identified in the [second amended complaint] and in publications not yet identified.
Judge Preska held that the allegations are sufficient at the pleading stage to state a copyright infringement claim, and ruled that "Defendant's arguments with respect to the covenant-condition doctrine amount to a dispute between the parties about contract interpretation that is beyond the purview of the Court on a motion to dismiss."

Attorneys' Fees Denied in Trademark Infringement Action Despite Bad Faith

In an August 12, 2013 ruling, Judge Colleen McMahon denied defendant Conduit Limited's post-trial motions for judgment as a matter of law and plaintiff MyPlaycity, Inc.'s ("MPC") motion for attorneys' fees in what the Court characterized as a "long, tortuous" litigation.  Before trial, Judge McMahon had entered summary judgment of liability in favor of MPC on its Lanham Act claims, common law trademark infringement and unfair competition claims, and unjust enrichment claim.  The Court "also concluded that Conduit had acted in bad faith as a matter of law."  After a damages trial, the jury awarded $500,000 in disgorgement of Conduit's profits.  Despite the clear wording of 15 U.S.C. § 1117(a) that the plaintiff need only prove the defendant's sales in seeking an award of profits and the burden is on the defendant to prove any offsets, Conduit argued that "MPC bore the burden of distinguishing between Conduit's profits flowing from its infringing activity and from its non-infringing uses of MPC's trademark."  The defendant's argument was based principally on Burndy Corp. v. Teledyne Indus., Inc., 748 F.2d 767 (2d Cir. 1984).  Judge McMahon considered that case and the cases discussing it, and concluded that "Conduit is wrong to assert that Burndy (or any other of the cases it cites) required MPC to do more than demonstrate the gross amount of Conduit's . . . profits from activity related to" MPC's use of the mark.  It then became Conduit's burden under Section 35(a) of the Lanham Act to prove that this entire amount was to unjust enrichment."  The Court considered, and rejected, a variety of other attacks on the damages award, and ultimately upheld it in its entirety.

Amendment of Patent Infringement Contentions with Information Learned in Discovery Denied

In an August 12, 2013 ruling, Judge Laura Taylor Swain, applying the Northern District of California patent rules, denied plaintiff Richard A. Williamson's motion to amend its infringement contentions in its patent infringement action against AT&T Operations, Inc.  The plaintiff sought to amend his contentions supposedly in response to information learned from AT&T's Rule 30(b)(6) deposition and 1.8 million page document production.  AT&T contended, and the Court agreed, that the information that Williamson supposedly learned through discovery was publicly available before he filed his infringement contentions.  Williamson nevertheless contended "that publicly available information at the time he served his infringement contentions was less reliable than non-public information that became available during discovery."  Judge Swain rejected this argument, writing that "[a]llowing a Plaintiff to delay serving infringement contentions because publicly available information might not be as reputable as yet-undisclosed information would run contrary to the purpose of the" infringement contention disclosure rules of focusing discovery and the remainder of an infringement case.  The Court thus found that the plaintiff lacked diligence in seeking to amend his contentions, and denied the motion without having to reach whether AT&T was prejudiced by the delay.

Court Orders Remittitur of the Jury's Award for Patent Infringement

In an August 14, 2013 ruling, Judge Jed S. Rakoff ordered a remittitur of the $30 million judgement obtained by Tomita Technologies USA, LLC in its patent infringement action against Nintendo co., Ltd. over its Nintendo 3DS gaming console. Nintendo argued that the damages award was excessive because it used the "entire market value" of the 3DS consoles as the royalty base rather than the "'smallest salable patent-practicing unit.'"  Nintendo based its argument on "the rule that, in calculating damages for multi-component products accused of infringement, royalties must 'be based not on the entire product, but instead on the "smallest salable patent-practicing unit."'"  The Court reasoned that "[w]hether the entire market value rule is implicated thus turns on the question of whether the 3DS constitutes the 'smallest salable patent-practicing unit.'" 

Judge Rakoff adhered to his ruling, made in response to Nintendo's in limine motion, that Tomita's expert "properly looked to the 3DS itself as the 'smallest salable patent-practicing unit,'" and did not rely on the entire market value rule.  The Court thus declined to order a remittitur on that ground. 

Judge Rakoff nevertheless did find that "the jury's $30.2 million damages award is 'intrinsically excessive' and unsupported by the evidence presented at trial."  In particular, the Court found that although the reasonable royalty rate of 3% found by the jury is less than a comparable license to which Tomita is a party, "there are special circumstances relating to the 3DS that strongly suggest that such a royalty rate is excessive in this context."  Those factors, according to Judge Rakoff, are that the 3DS consoles are not profitable for Nintendo, and that the infringed patent-in-suit was used in only two functions of the consoles that were "in some sense ancillary to the core functionality of the 3DS as a gaming system."  Judge Rakoff thus gave Tomita a choice of accepting one-half of the damages awarded or facing a new trial.

Dilution and Unfair Competition Claims Dismissed on Motion for Judgment on the Pleadings

In an August 12, 2013 ruling, Judge Laura Taylor Swain granted defendants' motion for judgment on the pleadings dismissing plaintiff Allied Interstate LLC's complaint against them.  Allied Interstate provides debt collection, among other services.  The defendants, Kimmel & Silverman P.C., are a law firm specializing in Fair Debt Collection Practices Act cases, and operate a website, www.creditlaw.com, to promote their services.  Allied Interstate asserted federal and state unfair competition-related and dilution claims arising from the defendants' alleged use of "Allied Interstate" on their website, in the metadata for the site (which is not typically viewable by a user of the site), and in their purchase of the phrase as part of Google's AdWords program.  Without reaching the issue of whether "Allied Interstate" is a famous mark, Judge Swain dismissed the dilution claims finding:  (1) the claim is inapplicable where the defendant uses the mark to refer to the mark owner's goods or services as defendants used the mark here; (2) defendants' use of the mark was a fair use; and (3) to the extent that defendants used the mark to draw a distinction between Allied Interstate's services and their own, the use fell within the comparative advertising exception to a dilution claim under 15 U.S.C. §1125(c)(3)(A)(i).  Concerning the unfair competition and false designation of origin claims, the Court found the allegations to be implausible formulaic conclusions.  Focusing on defendants' actual use of the "Allied Interstate" mark, Judge Swain ruled:

Magistrate Recommends Statutory Trademark Damages and Permanent Injunction Against Counterfeiters

In an August 9, 2013 ruling, Magistrate Judge Frank Maas recommended a $9 million award of statutory trademark damages to Tiffany (NJ) LLC against a series of related defendants (all but one of whom is located in China) and their credit card processor and entered a permanent injunction, but declined to enter a turnover order of funds held in Chinese banks pending an appeal to the Second Circuit of a similar order in another action.  Tiffany filed its complaint against the defendants alleging that they, "through a series of companies and websites, unlawfully manufactured, marketed and sold counterfeit versions of trademarked Tiffany products over the internet, in violation of the Lanham Act."  Tiffany also sued the defendants' credit processor, 95epay, alleging contributory infringement.  All defendants defaulted, and an inquest was ordered.  None of the defendants appeared at the inquest, although three Chinese banks holding defendants' assets and that had previously been restrained appeared to contest a turnover order on, among other grounds, China's bank secrecy laws.

Heightened Pleading Standard Applies to Patent Invalidity Counterclaims

In an August 7, 2013 ruling, Judge Paul A. Engelmayer granted-in-part the motion to strike certain affirmative defenses and to dismiss counterclaims of non-infringement and invalidity in plaintiff Orientview Technologies LLC's patent infringement action against Seven for All Mankind, LLC ("7FAM").  Most notably, the Court ruled that an invalidity counterclaim must meet the heightened pleading standards under Twombly  and Iqbal.  In dismissing the invalidity counterclaim under Fed. R. Civ. P. 12(b)(6), Judge Engelmayer noted the split in the cases about whether the relaxed pleading standard for patent infringement cases or the more rigorous Twombly and Iqbal standards applied, and held that "in the absence of any directive that claims of invalidity, like claims of direct infringement, should be measured under a different standard than almost all other claims in this Circuit are, the Court declines to do so." 

Regarding the affirmative defenses, while the motion was pending the parties agreed that two of the defenses at issue, concerning indirect infringement which was not alleged by plaintiff and injunctive relief which plaintiff had not sought, are not relevant to the case, and the Court struck them as "immaterial" under Fed. R. Civ. P. 12(f).  Plaintiff challenged a third affirmative defense, that the scope of the patent-in-suit was not broad enough to encompass the defendant's conduct, on the ground that it was duplicative of another defense that the defendant has not infringed any claim.  In denying the motion, Judge Engelmayer noted that courts have broad discretion in deciding motions to strike and that such motions are generally disfavored.  The Court found that to "the extent Overview argues that the defense is redundant, its retention poses no risk of prejudice to Overview which is already obligated to defend itself against" the supposedly duplicative defense and the non-infringement counterclaim.

Prevailing Defendant Denied Award of Attorneys' Fees in Lanham Act Claim

In an August 7, 2013 ruling, Judge Jed S. Rakoff denied the motion of defendants House of Cheatham Inc. and Robert Bell for attorneys' fees under the Lanham Act after the defendants prevailed on the trademark infringement, false designation of origin, unfair competition and state dilution claims brought by the plaintiff, Akiro LLC.  The Court first noted that Second Circuit case law "'allows recovery of a reasonable attorney's fee only on evidence of fraud or bad faith,'"  although some cases have allowed fees where the suit was a "'competitive ploy'" or where the suit is initiated with "'ulterior business motives.'"  In support of their motion, "defendants largely focus[ed] on such matters of the timing of Akiro's decision to commence this action, particular tactical decisions, and the expense of defendants' defense."  The Court, however, ruled that "the proper inquiry centers on whether or not Akiro 'had a credible, good faith basis on which to rest its Lanham Act claims."  After considering the (albeit limited) evidence presented at trial, Judge Rakoff held that "the Court cannot conclude that Akiro lacked a good-faith basis for its claims," and denied an award of fees.

Copyright Claims Over Alleged Misuse of Plaintiff's Photographs Dismissed

In an August 6, 2013 ruling, Judge Loretta A. Preska dismissed the copyright infringement claims that Muench Photography, Inc. had asserted against John Wiley & Sons, Inc.  Muench had a contract with Corbis Corporation for the licensing of Muench's photographs to third parties.  Corbis licensed certain of plaintiff's photographs to Wiley that "contained express limitations on Defendant's use of" them.  Plaintiff's First Amended Complaint, which asserted copyright infringement and breach of contract claims, alleged that Wiley's use of their photographs exceeded the scope of the license in a number of ways, and that Wiley entered into the license knowing that its use would exceed the scope.  Wiley moved to dismiss the copyright claims arguing that Muench was collaterally estopped by a ruling in another litigation because the "claims rely upon copyright registrations that this Court has already held to be insufficient to bring the instant suit."  Muench argued that collateral estoppel was inappropriate because the earlier ruling was not yet final.  Judge Preska avoided the estoppel issue, and simply adhered to her reasoning in the earlier decision that the copyrights were "invalid as to Muench's individual works . . . because Muench was not listed as an author," as required by the Copyright Act.  The Court allowed limited breach of contract claims to proceed.

Damages Claim Goes Forward in Prilosec Patent Infringement Litigation

In an August 5, 2013 ruling, Judge Denise Cote denied defendant Andrx Pharmaceuticals, Inc.'s summary judgment motion in plaintiff Astra Aktiebolag's long-running patent infringement action over a generic version of Prilosec.  The action began with Andrx filing of an ANDA, before it had actually made any of the allegedly infringing drug.  During the course of the lengthy litigation, Andrx manufactured $41 million worth of "validation batches" of the drug.  After the Court found infringement, Astra supplemented its complaint to allege damages arising from this manufacture.  Andrx moved for summary judgment, contending it never sold any infringing goods, and its mere manufacture of goods without sale could not constitute "commercial manufacture" that could give rise to money damages under the Hatch-Waxman Act.  Judge Cote rejected the argument, ruling that "commercial manufacture" did not mean "commercial marketing" as Andrx asserted, and that if Congress had meant "commercial marketing," it would have used that term.  The Court also rejected Andrx's argument that the earlier entry of a final injunction prohibiting sale of the goods precluded an award of damages for the manufacture of those goods.  Judge Cote ruled that the fact that Andrx was "enjoined from infringing patents going forward does not render any damages award for past infringement 'double recovery,'" and allowed the damages claim to proceed.

Court Transfers Infringement Case to Tennessee

In an August 2, 2013 ruling, Judge Alison J. Nathan transferred an action alleging patent infringement, trade dress infringement, unfair competition and dilution to the Middle District of Tennessee.  A defendant in the New York action, R&L Merchandising, LLC, had brought a declaratory judgment action of non-infringement against the plaintiff, Alex and Ani, LLC, in the Middle District of Tennessee.  Alex and Ani then started the infringement action against R&L and others in the Southern District.  Judge Nathan granted the defendants' motion to change venue under 28 U.S.C. § 1404(a).  Although noting that the plaintiff's choice of the forum is typically entitled to considerable weight, the Court stated that "that is not the case if the chosen forum has a limited connection with the locus of operative facts."  For the trade dress infringement, dilution and unfair competition claims, the Court held that "the locus of operative facts is where the infringement, dilution, and unfair competition occurred."  Since those operative facts took place nationwide, Judge Nathan found that New York's "connection to the operative facts is not unique."  For the patent infringement claim, the Court held that the locus "is generally where the patented invention was developed or where the allegedly infringing product was designed, developed, and produced," which in this case was outside New York.  Judge Nathan thus transferred the case to the Middle District of Tennessee.

Declaratory Judgment Action of Patent Non-Infringment Transferred After Finding of Forum Shopping

In an August 2, 2013 ruling, Judge Colleen McMahon sua sponte transferred a declaratory judgment action of patent non-infringement to the Eastern District of Texas to be consolidated with already pending litigation in that District.  After Blue Calypso, Inc. started an infringement action against Foursquare Labs, Inc. in the Eastern District of Texas, it was advised by the USPTO that additional related patents would issue.  Blue Calypso asked Foursquare to consent to an amended complaint adding the new patents.  Foursquare then started the declaratory judgment action in this District to declare its non-infringement of the newly issued patents.  Judge McMahon ruled that the "filing of this complaint is plainly an effort to forum shop by Foursquare," and transferred the action to the Eastern District of Texas.

No Collateral Estoppel from General Jury Verdict in Patent Infringement Action

In an August 1, 2013 ruling, Judge George B. Daniels denied reconsideration of his earlier decision declining to give collateral estoppel effect to a general jury verdict from the Eastern District of Texas finding non-infringement of two patents asserted by Alcatel-Lucent USA, Inc.  After the Eastern District of Texas jury verdict was rendered finding that Overstock and Newegg did not infringe the Alcatel-Lucent patents, Barnes & Noble, Inc. moved before Judge Daniels seeking to collaterally estop the assertion of those same patents against it.  The Court denied the motion, and Barnes & Noble sought reconsideration, arguing that the Court "'misapprehended or overlooked . . . how to interpret the general verdicts of non-infringement in the Texas case.'"  Judge Daniels rejected the argument, stating:  "To find non-infringement, the jury only had to find that the accused Newegg and Overstock systems did not include each and every requirement or limitation of the claims. . . . Given the general jury verdict, there is no way of knowing which requirement recited in the asserted patent claims the jury found were not met.  Consequently, there is also no way of knowing if the requirement the jury found not met is identical to a limitation in the different claims at issue in this case."

Copyright Infrigement and Unfair Competition Claims Go Forward in Litigation Over "Hangman" Books

In an August 1, 2013 ruling, Judge Paul A. Crotty dismissed the trade dress infringement claim of plaintiff Michael Ward d/b/a Brainteaser Publications, and declined to dismiss the copyright and unfair competition claims against Andrews McMeel Publishing, LLC.  The plaintiff had been publishing "Scratch & Solve Hangman" books, incorporating variations on the "Hangman" word game, for nearly twenty years, including since 2005 in the U.S.  The defendant introduced its own "Hangman"-based books in 2008, and Ward sued, alleging that the defendant's books "'incorporate the entire concept, feel, and design" of the plaintiff's books.  The Court rejected parts of the plaintiff's copyright claim because the supposedly copied material lacked sufficient originality to be copyrightable, but found that the drawings of certain stick figures used in the "Hangman" game could support a copyright claim.  Judge Crotty held that "[w]hether the illustrations or total concept and overall feel of the [defendant's books] are substantially similar to those of the [plaintiff's books] presents a close factual question.  Accordingly, it will be left for a jury to determine." 
The general information and thoughts posted to this blog are provided only as an informational service to the web community and do not constitute solicitation or provision of legal advice. Nothing on this blog is intended to create an attorney-client relationship and nothing posted constitutes legal advice. You should understand that the posts by the author, who is an attorney at U.S. law firm Allegaert, Berger & Vogel, may or may not reflect the views of that firm and that the author of this blog is only authorized to practice law in the jurisdictions in which he is properly licensed to do so. For additional information, click here.