Court Declines to Compel Answers to Contention Interrogatories Early in Patent Infringement Action

In a May 29, 2014 ruling, Judge Katherine B. Forrest declined to compel the answers to contention interrogatories early in this patent infringement action.  The Court wrote:

There is no special "patent rule" that provides for contention interrogatories at the outset of a case.  There are, however, significant alternative means for the parties to obtain additional particularity regarding allegations:  this Court's Individual Rules provide for the virtually immediate disclosure of plaintiff's infringement contentions, followed by a document production, followed by disclosure of any invalidity contentions, followed (again) by a document production.  And so on.  The Local Patent Rules provide similarly.

Court Awards Statutory Copyright Infringement Damages of $750 Per Infringement

In a May 22, 2014 ruling, Judge Paul A. Engelmayer granted the plaintiffs’ unopposed motion to award statutory copyright damages of $750 for each of three copyrights that the defendant had previously been found to infringe. Although the Court did not reach the issue of whether the infringement was innocent, Judge Engelmayer wrote that the $750 award was justified irrespective of the innocence of the infringement. The Court also dismissed the plaintiffs’ motion to voluntarily dismiss with prejudice their remaining claims, finding that a dismissal with prejudice will benefit, not harm, the defendant.

Court Denies Stay of Permanent Injunction Pending Appeal

Following up an earlier decision to grant a permanent injunction (here), Judge Katherine B. Forrest, in a May 21, 2014 ruling, denied the defendant's motion for a stay of the injunction pending appeal.  The Court wrote:

ABN's position is premised on the erroneous assumption that the Court should or intended to provide the time it viewed as necessary to complete an ordinary transition [from the infringing software].  That was not the Court's intent.  How and what ABN chooses to do during the transition period is up to ABN -- the Court's view is that the one year period [before the effective date of the injunction] provides sufficient and reasonable time for ABN to "get off" BankTrade.  Whether ABN starts a transition to using another system or outsources its trade finance business entirely is up to ABN.  The Court does not have a view as to what business decisions ABN will make over the next year.  It has but one requirement:  ABN shall stop using BankTrade by the expiration of that period.

Court Dismisses Contributory Patent Infringement Claim, But Declines to Dismiss Induced and Willful Infringement Claims

In a May 12, 2014 ruling, Judge Robert D. Sweet refused to dismiss the plaintiff’s induced patent infringement claim and claim for willful infringement, but did dismiss the contributory infringement claim under Rule 12(b)(6). With regard to the induced infringement, the Court wrote that the fact that the plaintiff and defendant are competitors in producing the goods covered by the patents-in-suit, that the plaintiff marked its goods with the pertinent patents, and that industry trade publications mentioned the existence of the plaintiff’s patents all gave rise to the inference that the defendant knew of the patents or turned a willful blind eye to their existence. Judge Sweet further ruled that that these same facts supported the plaintiff’s claim of willful infringement. The Court, however, dismissed the contributory infringement claim, noting that claims “of indirect infringement [necessary to support a contributory infringement claim] requires the application of Iqbal/Twombly plausibility standard,” and the “Complaint makes a barebones recitation that the [accused device] was ‘especially made or especially adapted’ for an infringing use and that it has ‘no substantial noninfringing uses.’”

Court Awards Statutory Copyright Infringement Damages of $3,000 Per Infringement

In a May 16, 2014 ruling, Magistrate Judge James C. Francis IV issued a Report and Recommendation after an inquest awarding statutory damages of $3,000 per photograph for six infringing pictures of Lindsay Lohan that the defendant published on its website.  Judge Francis found that this amount of damages "represents three time the amount of the licensing fee for each image," making the award "clearly within the lawful range, and, indeed, near the lower end."  The Court also awarded attorneys' fees of $6,732.50, approving hourly rates for two partners of $525 and $450, but reducing a third year associate's rate from $400 to $200.

Fee Application under Copyright Act for Frivolous Appeal Must Be Directed to Appellate Court

In a May 13, 2014 ruling, Judge J. Paul Oetken ruled that a motion for fees under the Copyright Act incurred in connection with the defendant's unsuccessful appeal must be made in the Court of Appeals.  Accordingly, Judge Oetken denied the plaintiff's request for leave to file the motion for fees before the district court.

Court Grants Permanent Injunction Against Continued Copyright Infringement of Software

In a May 9, 2014 ruling, Judge Katherine B. Forrest granted a permanent injunction against defendant ABN Amro Bank's continued use of the plaintiff's software.  In an earlier ruling (here), Judge Forrest granted summary judgment of copyright infringement after finding that ABN Amro did not retain the right to use the software when it sold a subsidiary that had licensed the software from the plaintiff.  In later defending against the plaintiff's request for an injunction, ABN Amro argued that the software was too important to its business and too integrated into its systems to stop using the software, and since the plaintiff was demanding commercially unreasonable terms for a license, the Court should, in essence, grant it a perpetual license for a commercially reasonable royalty.  In rejecting that argument, Judge Forrest found that the plaintiff would be irreparably harmed without an injunction, that the balance of hardships favored the plaintiff, and the Court was particularly concerned about the public interest, writing:

[I]f this Court were to find that a license for an important piece of software may not be revoked -- or, put otherwise, must be renewed -- on terms the licensee considers reasonable, the Court would be flooded with requests to assume licensing responsibilities it is ill-equipped to assume.  This undue burden is not in the public interest in light of its already busy dockets.  To be sure, there are instances in which courts impose licensing terms -- when judicial fact-finding has determined a particular and unusual need. . . . Courts should not wade into such deep waters casually.

The Court gave ABN Amro one year to transition from the software at issue, and wrote that the Court would consider a "stay on condition that the parties both agree to move with all available speed to perfect and argue any appeals (e.g., no delays or extensions of deadlines)."

Court Dismisses Plaintiffs’ Computer Fraud and Abuse Act and Copyright Infringement Claims

In a May 5, 2014 ruling, Judge Andrew L. Carter, Jr. dismissed the plaintiffs’ claims against a “John Doe” defendant over derogatory blog postings. The plaintiffs asserted claims, among others, for copyright infringement and violations of the Computer Fraud and Abuse Act. Judge Carter disposed of the Computer Fraud and Abuse Act claim based on the defendant’s unauthorized copying of the plaintiffs’ wedding photo from their Facebook page by noting that the complaint inadequately alleged that the defendant had accessed a “protected computer” as the term is defined under the Act, and that the plaintiffs’ allegations of harm to reputation and lost potential business did not claim the sort of damages recoverable under the Act. The Court dismissed the copyright claim because the plaintiffs did not allege that the copied work was registered, which is a precondition to suit.

Court Declines to Dismiss Lanham Act Claim Based on Misleading ISBN

In a May 5, 2014 ruling, Judge Katherine B. Forrest denied a motion to dismiss the plaintiffs’ amended complaint asserting a Lanham Act violation. The original complaint included copyright infringement claims which were dismissed after the Supreme Court’s 2013 ruling in Kirtsaeng “that the first sale doctrine applied to purchase of publications outside of the United States.” In declining to dismiss the Lanham Act claim for false representation or description, Judge Forrest wrote:

The allegations in the Amended Complaint provide specificity as to how defendants are alleged to have mislead purchasers of foreign editions of publications. In short, plaintiffs assert that defendant has used the International Standard Book Number (“ISBN”) for English language editions of publications, as well as images of the covers of English language editions, in a manner that conveys a “net impression” that the buyer will receive an English language edition of the publication. Defendants I fact sell foreign editions. Because foreign editions may have different content and publication quality, plaintiffs are concerned that sales of one masquerading as the other will result in harm to their goodwill and reputation. The Lanham Act prohibits actions which deceive consumers and impair a producer’s goodwill.

The Court rejected the contention that the ISBN is not a trademark, noting first that plaintiffs’ claim is for false description and finding that it “is plausible that a unique mark associated with a good – such as an ISBN number – would represent or describe origin.”

Court Declines to Dismiss Trademark Infringement Claim, But Dismisses Cybersquatting Claim

In an April 30, 2014 ruling, Judge John G. Koetl granted the defendants’ motion to dismiss the plaintiffs’ cybersquatting claim, but denied the motion to dismiss the other Lanham Act-related claims that the defendants’ “Manhattan Elite Prep” mark for test preparation services infringed the plaintiff’s “Manhattan Prep” and “Manhattan Prep” marks. In declining to dismiss the trademark infringement claims, Judge Koetl ruled that the plaintiffs had adequately alleged use of the marks at issue before the defendants’ use, and rejected the defendants’ contention that the plaintiffs’ filing of an intent-to-use application with the Trademark Office estopped the plaintiffs from showing that there had been actual use before the filing of the application. The Court, however, dismissed the cybersquatting claim, writing that:

the allegations in the Complaint regarding the defendants’ use of the domain name simply show another aspect of the alleged trademark infringement, rather than an attempt to profit specifically from “squatting” on the domain name with bad faith. These allegations do not suggest that defendants “perpetrated the core activities that threaten to result in the paradigmatic harm that the ACPA was enacted to eradicate,” that is, “the proliferation of cybersquatting – the Internet version of a land grab.”

Court Again Rejects Plaintiff’s Copyright Infringement Claim as De Minimus

In an April 30, 2014 ruling, Judge Katherine B. Forrest denied the plaintiff’s motion to amend her complaint against the National Football League for a second time. The Court had earlier dismissed the first amended complaint for failing to allege commercial use of the plaintiff’s name or likeness necessary to support a Lanham Act claim and because any copyright infringement was de minimus. Judge Forrest again found the copyright infringement alleged in the second amended complaint to be de minimus, writing:

Here, [the defendant’s] site contains a great deal of substantive content and is comprised of a large number of distinct pages, many of which contain editorial content. Two of the three inclusions of plaintiff’s copyrighted material are in the context of plaintiff as a contributor – plaintiff is not pictured nor mentioned in connection with substantive editorial content. The final inclusion of plaintiff’s copyrighted content is included as a rotating thumbnail image on the site’s landing page. Here, plaintiff’s photograph is again unaffiliated with editorial content. This, combined with the fact that plaintiff’s copyrighted content was on the site for only three weeks – a short period of time in the life of a website – illustrates that the copyright violation here is de minimus.

The Court rejected the plaintiff’s Lanham Act claim, finding no allegations of any cognizable injury.