Court Permits Discovery of Foreign Sales of Infringing Goods Made in the United States

In a November 25, 2015 ruling, Judge Laura Taylor Swain permitted the plaintiff in this patent infringement action to seek discovery of the amount of the defendant's foreign sales of allegedly infringing goods manufactured in the United States.  The Court wrote that "[l]ong-established Federal Circuit precedent recognizes that, when an allegedly infringing product is produced in the United States and subsequently sold by the manufacturer to foreign buyers, the foreign sales are relevant to the determination of damages suffered as a result of the domestic act of infringement." Judge Swain rejected the defendant's argument that the Federal Circuit's recent tightening of the extra-territoriality of patent rights prevented the discovery sought, finding that none of the defendant's "cited authorities demonstrates that discovery of foreign sales information – which is relevant to [the plaintiff's] claim for damages for allegedly infringing activities in the United States since it has, at a minimum, implications for the valuation of the invention – is precluded by the presumption against extraterritoriality."

Court Finds "Clever" Invention Claims Patent-Ineligible Subject Matter

In a November 18, 2015 ruling, Judge Colleen McMahon found the plaintiff's patent for routing a long distance call invalid as merely claiming an abstract idea.  Judge McMahon described the claimed invention as:

For example, suppose I am the end user. My service provider assigns me the number 555- 222-1234; I tell the service provider that, when I dial those digits, I want to be connected to my best friend (the recipient), who lives in Ohio, and whose telephone number is 614-555-1213. When I dial the assigned incoming telephone number (555-222-1234) from my personal telephone number (987-654-3210)- which number is recognized via some unclaimed but well known device like Caller ID - the call is forwarded directly to my best friend's home telephone number (614-555-1213). I need not input any additional information in order to get the call routed to its intended recipient.

The Court then noted that:

 The claim is directed to a well-known activity that is almost as old as telephony itself making a long distance telephone call. What plaintiff did was figure out a way to make such a call more cheaply, by dialing a ten digit local number and nothing more. He combined two activities that have long been performed, by humans and by machines -- caller ID and call forwarding- such that the recipient of a local call (area code plus seven digit number) uses some type of caller ID to recognize who the incoming caller is, and then forwards the incoming call to its intended recipient by associating the assigned incoming telephone number with a particular recipient's telephone number. Neither caller ID nor the method by which the call actually gets forwarded to its intended recipient (over what telephone network, using what switching facilities) is claimed. No physical aspect of this process is claimed. What is claimed is the idea of dialing only ten digits, at which point some unspecified intermediary will identify both the caller and the intended recipient of the call and connect them.

Judge McMahon then found that:

 Defendant argues that the claims of the '156 patent are directed to the patent ineligible abstract idea. I agree. Defendant, in an effort to shoehorn this case into as many of the above fact-patterns as it possibly can, says that the abstract idea is "a call routing system that employs a two-dimensional lookup table such that calls are routed to intended recipients based on the call-in number being dialed and the identity of the caller." I think it is simpler to say that the claims in suit are directed to the idea of "connecting two people via long distance telephony using caller ID and call forwarding." However you put it, it is clear, on the basis of the precedents discussed above, that this patent is directed to an abstract idea.

Although the Court characterized the invention as both "clever" and "an elegant solution," Judge McMahon nevertheless concluded that the claimed invention lacked any inventive concept, and merely claimed patent-ineligible subject matter.

Court Finds Lack of Subject Matter Jurisdiction Over Invalidity Claim After Plaintiff Dismissed its Infringement Claim

In a November 10, 2015 ruling, Judge Jed S. Rakoff dismissed the defendant's declaratory judgment counterclaim of invalidity for lack of subject matter jurisdiction when the plaintiff dismissed its infringement claim after an adverse Markman construction.  The plaintiff also offered a covenant not to sue that was effective as to future claims against the defendant unless the adverse claim construction was reversed.  Judge Rakoff found that the covenant not to sue eliminated subject matter jurisdiction over the invalidity counterclaim, writing:

In light of the parties' joint stipulation of non-infringement and plaintiff's covenant not to sue on the [patent-in-suit] barring a change in the law of the case, there is no live controversy between the parties as to infringement and defendants have no immediate interest in the validity of defendants' . . . Patent as long as that remains so. While defendants might gain such an interest if plaintiff both appeals the Court's Markman Order and persuades the Federal Circuit of what it could not persuade this Court, there is no certainty that plaintiff will even take an appeal. Plaintiff has not committed to doing so and defendants themselves recognize that plaintiff very well may choose not to, asserting that plaintiff is posturing in threatening to appeal. . . . A controversy this speculative simply cannot be considered to have the "sufficient immediacy" needed to invoke the Declaratory Judgment Act. As such, this Court does not have jurisdiction to entertain the invalidity claim.

Judge Rakoff also ruled that even if the Court had jurisdiction, the Court would decline in its discretion to exercise it given the lack of any immediate controversy.  Judge Rakoff found that "that it would be imprudent and a potential waste of both the parties' and judicial resources for the Court to proceed to determine the validity of the [patent-in-suit], when plaintiff has categorically dropped its infringement allegations barring a reversal of the Court's construction of the term" at issue.

Court Finds Unjust Enrichment Claim Raises Federal Question Under Patent Act

In an October 29, 2015 ruling,Judge Jesse M. Furman found federal question jurisdiction over the plaintiff's unjust enrichment claim which depended on the defendant's infringement of the plaintiff's patent.  The plaintiff administers a number of patent license pools, and the defendant took a license under one of the pools.  After the defendant stopped paying royalties, the plaintiff sued in state court for breach of contract and unjust enrichment.  The defendant removed to this Court, and the plaintiff moved to remand.  Plaintiff's unjust enrichment theory was that the defendant "'benefited by acting as if it had a patent pool license . . ., i.e., that it was "under the umbrella of the protection of the [relevant] Contract"'" and 'it [did] so at the expense of [the plaintiff] which had nonetheless provided this umbrella of protection but was not adequately compensated for doing so.'"  Judge Furman found that "to prevail on that claim, [the plaintiff] must necessarily prove infringement of one or more of the patent in the patent pool," "[t]hat is, the only way [the plaintiff] can prove that [the defendant] benefited at its expense is by showing that it used (and therefore infringed) a patent in the pool."  The Court noted that that "fact distinguishes [the plaintiff's] claim from breach of contract cases found not to raise federal patent questions because the claims turned on interpretation or application of a term in the contract, and infringement or non-infringement was not the determining factor," and denied the plaintiff's motion to remand.

Court Finds Pre-Suit Product Testing Covered by Work Product Privilege

In an October 22, 2015 ruling, Judge Jed S. Rakoff found that the work product privilege applies "to documents regarding plaintiffs' testing of defendant's accused products" before the plaintiffs filed this patent infringement action.  The defendant argued that the test results comprised mere data that could not be protected as work product.  The Court rejected this argument, finding that "'[b]oth facts and opinions are protected by the work product privilege.'"

Judge Rakoff also ordered the plaintiffs to produce a privilege log despite their argument "that doing so 'would disclose counsel's pre-filing investigation, mental processes, and work-product, and would identify potential non-testifying expert consultants in violation of Rule 26.'"  Judge Rakoff wrote:

Thus, plaintiffs' novel argument is that the privilege log itself would be privileged.  This borders on the frivolous.  Rule 26(b)(5) does not end with the caveat, "if the party feels like it."  It is in no way optional.  Nor does it matter that plaintiffs feel the creation of a privilege loge would be "burdensome and wasteful."

Court Denies Emotional Distress Damages for Copyright Infringement

In an October 19, 2015 ruling, Judge Paul A. Englemayer ruled that emotional distress damages are not recoverable for copyright infringement.  The pro se plaintiff had asserted a separate claim for "mental anguish," contending that "he has 'suffered from feelings of distress, anxiety and depression, which interferes with his creative ability, hinders his inspiration to write and consequently stagnates his income'" because of the defendants' infringement of his song.  Judge Engelmayer construed "this allegation, although presented as a claim for liability, to describe a category of alleged damages," and ruled that "such damages fall outside the remedies statutorily authorized for copyright infringement."

Court Declines to Find Spoliation in Destruction of Counterfeit Books

In an October 2, 2015 ruling, Magistrate Judge Gabriel W. Gorenstein declined to find spoliation by a defendant who destroyed certain counterfeit books before the start of copyright litigation. The defendant had previously settled a copyright infringement action by the same plaintiffs for the sale of counterfeit books. The settlement agreement in the prior litigation did not impose any preservation obligations if the defendant came to possess counterfeit books post-settlement. The defendant in fact did so, and destroyed some of the counterfeit books before the start of this current action. Judge Gorenstein rejected the argument that the previous lawsuit imposed an obligation on the defendant to preserve all counterfeit books in its possession. The Court reasoned:

Plaintiffs perhaps envision a regime under which any tortfeasor is required to preserve all evidence of their wrongdoing indefinitely. That is not the law that governs spoliation, however. Instead, a prerequisite to the duty to preserve is that there be an actual litigation or “reasonably foreseeable” litigation. . . . Given the circumstances that existed at the time the destruction of books occurred, we cannot find that litigation over the counterfeit books defendants found in their possession – not only the ones that had never been sold but even the relative few that had been returned from purchasers – was “reasonably foreseeable.”

Judge Gorenstein further found that the plaintiffs’ pre-litigation demand letter that the defendant preserve evidence did not trigger a preservation obligation because the letter “did not list any specific acts of infringement or even provide a list of titles that were at issue,” and that “to be effective in alerting a party to the potential institution of litigation, the letter must give some specifics as to the particular claim that will be made.”

Court Declines to Find Abandonment of Registered Mark

In an October 1, 2015 ruling, Judge Valerie Caproni found that the use of the federally-registered “Highline” mark for certain financial services in the phrases “Highland Capital Management” and “Highline Capital Management, LLC” was sufficient use of the mark in commerce to prevent abandonment. In dismissing the defendant’s counterclaim to invalidate the mark, the Court ruled that because the plaintiff “is an investment management firm that manages capital, the addition of the words ‘Capital’ or ‘Capital Management, LLC’ is ‘purely descriptive’ and ‘does not affect the origin-indicating function of the mark.’ The addition of ‘Capital’ and ‘Management’, instead, simply flesh out exactly what financial services are offered by” the plaintiff.

Court Rules Question of Copyright Infringement Statutory Damages Is for the Jury

In a September 28, 2015 ruling, Judge Gregory H. Woods held, after granting summary judgment of copyright infringement, that the amount of statutory damages was a question for the jury. Given the particular facts of this case, Judge Woods noted the open legal question of whether statutory damages are recoverable for infringement of both a musical composition and of a sound recording of that composition. The Court discussed a split in the District on that question, but suggested that it would adopt the view that a sound recording is a derivative work of a musical composition, precluding the separate recovery of statutory damages. Judge Woods also noted the legal uncertainty about whether a copyright holder can recover actual damages of a copyrighted “work,” and then recover statutory damages for the same “work” (albeit of a derivative work). Because of factual issues as to both of these legal questions, Judge Woods did not need to reach a definitive conclusion about them.

Court Refuses to Preliminarily Enjoin Defendants' Participation in IPR

In a September 16, 2015 ruling, Judge Vernon S. Broderick denied the plaintiffs’ motion for a preliminary injunction to enjoin the defendants from participating in a Patent Office Inter Partes Review proceeding because the participation supposedly violated a forum selection clause in the contract between the plaintiffs and the defendants. In denying the injunction, Judge Broderick ruled that the plaintiffs would not be irreparably harmed by being forced to proceed with the IPR because the cost of the proceeding, although costing in the hundreds of thousands of dollars, was nevertheless not an unquantifiable amount constituting irreparable injury. The Court further ruled that the plaintiffs had failed to show a likelihood of success on the merits because the IPR proceeding did not arise out of or relate to the parties’ contract containing the forum selection clause, and thus was not covered by the forum selection clause. Judge Broderick reasoned that the issues in the IPR – the validity of the patents-in-suit – were unrelated to the parties’ contract, and in fact could have been raised essentially by any third party not at all involved in the contract.

The plaintiffs had also contended that the defendants were equitably estopped from challenging the validity of the patents because the defendants had previously assigned the patents at issue. The Court disposed of this contention by noting that the Patent Trial and Appeal Board “has held that the defense of assignor estoppel does not apply in IPR proceedings” so “if the IPR is initiated, [the plaintiffs] will be unable to raise assignor estoppel unless and until the outcome of the IPR is appealed to the Federal Circuit.”

Court Denies Summary Judgment on Trademark Infringement Claim Because of Dispute about Genuineness of Goods

In a September 11, 2015 ruling, Judge Vernon S. Broderick denied the parties’ cross motions for summary judgment on the plaintiffs’ trademark-related claims, finding issues of disputed fact about the genuineness of the goods at issue, and thus whether the sale of such goods could constitute trademark infringement. Judge Broderick noted that courts “in this district have characterized this principle – that the unauthorized resale of genuine goods, by itself, is not actionable under the trademark laws – as the ‘exhaustion doctrine’ or, by analogy to copyright law, the ‘first sale doctrine.’” The Court further noted that both he and the parties “have not identified any controlling Second Circuit authority that allocates the burden of proof on this issue,” but ruled that the burden was irrelevant to the parties’ motion because regardless of which party had the burden, the presence of disputed issues of fact about the genuineness of the goods at issue would defeat summary judgment.

Court Denies Application for Attorneys’ Fees after Voluntary Dismissal of Copyright Action

In an August 17, 2015 ruling, Judge John F. Keenan denied attorneys’ fees to the defendant after the plaintiff voluntarily dismissed a copyright infringement action without prejudice. Judge Duffy, acting in Judge Keenan’s absence, had previously denied the plaintiff’s motion for a preliminary injunction. Since the defendant had moved to dismiss, but had not answered, the plaintiff retained the right to unilaterally discontinue the action, and did so. The Court ruled that the defendant was not the prevailing party, and thus not entitled to a fee award, because the plaintiff’s unilateral voluntary dismissal without prejudice “is not ‘judicially sanctioned’ since no court action is required.” Judge Keenan also found that “a dismissal without prejudice is not a change in the legal relationship between the parties because plaintiff can still bring the claim again.” Without reaching the merits of the defendant’s application for fees, the Court did note, though, that the application was untimely, and could have been denied on that ground as well.

Court Finds Sampling of Sound Recording Can Infringe Underlying Musical Composition

In an August 7, 2015 ruling, Judge Ronnie Abrams found that the “sampling” of a sound recording can constitute copyright infringement of the underlying musical composition. As Judge Abrams wrote, “‘[s]ampling’ is a ‘technique whereby a portion of an already existing sound recording is incorporated into a new work.’” In seeking summary judgment on the issue of sampling, the defendants argued that, even if it had sampled, it could not be liable for copyright infringement “because Plaintiff owns only the musical composition copyright, not the sound recording copyright, of” the allegedly infringed work. The Court rejected this argument, finding that while “sampling involves the direct copying of a sound recording, this mode of copying does not somehow shield a defendant from also infringing the underlying musical composition.” Judge Abrams concluded that “if Plaintiff is able to present evidence showing that Defendants did in fact sample the . . . drum part [in the allegedly infringed work], such evidence would constitute proof that Defendants actually copied Plaintiff’s musical composition.”

Court Finds Inventor Acted as Own Lexicographer

In an August 6, 2015 ruling, Judge Richard J. Sullivan found that the inventor of the family of patents-in-suit acted as his own lexicographer by submitting unsolicited “remarks” during the prosecution of one of the later patents in the family (the ‘010 patent). The Court wrote:

There is no dispute that the “remarks” Joao [the inventor] to the USPTO are part of the prosecution history for the ‘010 Patent, and although Defendants question his motives – noting that the constructions contained in the “remarks” simply echoed the constructions proposed in the claim construction brief of an unrelated case – for purposes of claim construction, the “remarks” appear sufficiently clear, deliberate, and precise.

Judge Sullivan then considered whether the “remarks” were pertinent to one of the earlier patents in the same family that had an identical specification, and used “the ‘remarks’ as extrinsic evidence for purposes of construing the terms of” that patent “to the extent those remarks do not directly contradict the plain meaning of those terms and such terms cannot be construed without the aid of extrinsic evidence.”

Court Grants Fees in Copyright Infringement Action after Finding Plaintiff’s Claims Untimely

In a July 17, 2015 ruling, Judge Lorna G. Schofield granted attorneys’ fees to the prevailing plaintiff in a copyright infringement action. The Court had previously granted summary judgment dismissing the plaintiff’s claims as untimely. In granting fees, Judge Schofield wrote that “Plaintiff’s claims under the Copyright Act were plainly time barred and therefore objectively unreasonable. Claims brought after the statute of limitations has run may be considered objectively unreasonable.”

Court Denies Attorneys’ Fees to Prevailing Patent Infringement Defendants

In a July 17, 2015 ruling, Judge P. Kevin Castel declined to award attorneys’ fees to the prevailing defendants in a patent infringement case, finding that the case was not exceptional. Judge Castel noted that his summary judgment ruling in defendants’ favor turned largely on claim construction issues and a determination that one of the patents-in-suit was not entitled to an early priority date, and did not require a detailed examination of the accused products. Thus, the Court reasoned, a more thorough pre-suit investigation by the plaintiff would not have exposed the action as lacking merit. Judge Castel also rejected defendants’ contention that the plaintiff’s lack of expert testimony on the doctrine of equivalents made the case exceptional, writing that the testimony on the plaintiff’s director of product innovation was sufficient.

Court Remands Removed Action as Not Involving a Substantial Federal Question

In a July 7, 2015 ruling, Judge John G. Koeltl ruled that the Court lacked subject matter jurisdiction over a removed action in which the plaintiff alleged that the defendant submitted false affidavits in an earlier copyright infringement action about a third party’s (named Sorenson) ownership of the copyrights at issue. The plaintiff prevailed in the earlier action, but claimed that the defendant’s false declarations prolonged it. Judge Koeltl found that although the present action raised a federal question (authorship in the copyright context), it was not a “substantial” question. The Court wrote:

In this case, [the plaintiff] agrees with this Court’s conclusion that Sorenson did not have a valid copyright. His argument is that this Court would have reached that decision earlier on a motion for summary judgment, or that Sorenson would not have brought the prior lawsuit, had it not been for [the defendant’s] allegedly fraudulent affidavits. That is not a substantial copyright question because it will not change the result of the prior litigation with respect to the invalidity of Sorenson’s copyright, and indeed [the plaintiff] does not argue that it should change the result.

Court Denies DMCA Safe Harbor Protection to Subsidiary Not Specifically Named in Copyright Office Directory

In a June 30, 2015 ruling, Judge J. Paul Oetken found that a Digital Millennium Copyright Act notice filed with the Copyright Office directory under 17 U.S.C. § 512 to take advantage of the safe harbor provisions for internet service providers does not protect subsidiaries of the filer that are not specifically named. Judge Oetken noted that the statute requires the filing to contain the “‘Full Legal Name of Service Provider,’” and concluded that “the statute does not contemplate that a service provider entity can be shielded by the safe harbor where that entity has no presence at all in the [Copyright Office] directory.” The Court further found it “implausible that parties attempting to find a provider’s DMCA agent designation, using the [Copyright Office’s] database are expect to have independent knowledge of the corporate structure of a particular service provider.”

Court Denies Preliminary Injunction, Finding No Likelihood of Success on the Merits

In a June 29, 2015 ruling, Judge Robert W. Sweet denied the plaintiff’s motion for a preliminary injunction against the defendant’s use of the plaintiff’s trademarks in purchased keyword internet searches. Among other things, Judge Sweet found that the plaintiff had not demonstrated a likelihood of success on the merits because where a plaintiff “is seeking an injunction that will alter, rather than maintain, the status quo, it is required to show ‘a clear or substantial likelihood of success,’ . . . a higher showing than the likelihood of success on the merits required under the traditional preliminary injunction standard.” The Court found that while the plaintiff’s “case is persuasive, and there is a real possibility that it will prevail on its merits, at this stage it has not made a showing sufficient to meet this bar.”

Court Invalidates Patent As Claiming Patent-Ineligible Subject Matter

In a June 29, 2015 ruling, Judge Katherine Polk Failla invalidated U.S. Patent No. 7,885,887 under 35 U.S.C. § 101 as claiming ineligible subject matter. The Court summarized representative claim 1 as having the following “relevant limitations”:

(i) a computer operating either on the Internet or other network with access to a server; (ii) providing software tools with a suite of features allowing management of one or more creative projects; (iii) making certain types of offers associated with the project in exchange for funds for the project; (iv) facilitating the acceptance of offers by fans; (v) storing contact and marketing information of those who have accepted offers in exchange for funds in a database; and (vi) providing software tools that enable and control the exchange of information with a fan through the database.

In invalidating the patent, Judge Failla first noted that the “‘887 Patent’s claims are directed to the concept of a crowd-funding or fan-funding, i.e., raising funds for a project from interested individuals in exchange for incentives,” and concluded that these “claims are squarely about patronage – a concept that is ‘beyond question of ancient lineage.’” The Court then considered whether the claims in the ‘887 patent nevertheless had an “inventive concept,” and found that beyond “the abstract idea of patronage, the claims merely recite ‘well-understood, routine conventional activities or routine data-gathering steps.” Judge Failla thus concluded that “because the ‘887 Patent claims the abstract idea of incentive-based fan-funding and lacks an ‘inventive concept’ sufficient to ‘transform’ the claimed subject matter into a patent-eligible application of that idea, it is invalid under Section 101.”

Court Finds Copyright Ownership Claim Time-Barred, Allows Work-for-Hire Defense

In a June 26, 2015 ruling, Judge Kimba M. Wood ruled that the counterclaim plaintiff’s copyright ownership claim over certain photographs taken by the counterclaim defendant was barred by the three year statute of limitations. The Court wrote that the statute begins to run “‘when a reasonably diligent plaintiff would have been put on inquiry as to the existence of a right.’” Judge Wood found that the counterclaim plaintiff had been put on notice of the counterclaim defendant’s “‘express assertion of sole authorship or ownership’” more than three years before suit. Judge Wood nevertheless permitted the counterclaim plaintiff to assert its work-for-hire defense in response to the counterclaim defendant’s copyright ownership claim, noting that the statute of limitations does not bar a defense. In considering the work-for-hire defense, the Court wrote that merely because the counterclaim defendant’s job responsibilities included taking photographs at times, that does not automatically mean that every photograph the counterclaim defendant took (for example, while “off the clock”) was in the scope of his employment duties, and thus denied in part summary judgment on the defense.

Court Finds No Laches Where There Is Intentional Trademark Infringement

In a June 22, 2015 ruling, Judge Jed S. Rakoff granted the plaintiffs’ summary judgment motion on the defendants’ laches defense in a trademark action on the ground that the defendants intentionally infringed. Judge Rakoff wrote that “the defendants fail to clear the critical threshold hurdle applicable to any party asserting an equitable defense – clean hands,” noting that “a laches defense is not available to a defendant who ‘intentionally traded off the [plaintiff's] name and protected products.’” The Court concluded that even “viewing the evidence in the light most favorable to defendants, the conclusion that defendants intentionally infringed plaintiffs’ trademark and trade dress is inescapable,” and granted plaintiffs’ summary judgment on the defense.

Court Applies "Plausibility" Pleading Standard to Patent Invalidity Counterclaim

In a June 16, 2015 ruling, Judge Denise Cote ruled that the Twombly/Iqbal pleading standard applies to a patent invalidity counterclaim. The counterclaim plaintiff argued that the enhanced pleading standard was inconsistent with the Local Patent Rules, which provide for the early disclosure of invalidity contentions. The Court adopted Judge Engelmayer’s earlier decision on the issue that “‘[a]lthough some superfluity may result, the Local Patent Rules and the [Twombly/Iqbal] pleading standard are not inconsistent. And in the absence of any directive that claims of invalidity . . . should be measured under a different standard than almost all other claims in this Circuit are, the Court declines to do so.’”

Court Denies, in Part, Ex Parte TRO in Counterfeit Action

In a June 15, 2015 ruling, Judge Richard J. Sullivan denied in part the plaintiff’s application for an ex parte temporary restraining order to enjoin the defendants’ sale of allegedly counterfeit goods and for related relief. As to enjoining the sale of goods, Judge Sullivan wrote that “Plaintiff fails to explain why Defenants’ alleged conduct, ongoing since at least November 2014, . . . is of a type where advance notice of the relief sought ‘would itself be likely to trigger irreparable injury.’” The Court also denied ex parte relief “locking and transferring” the defendants’ infringing websites, finding that the plaintiff has again failed to explain why notice would be harmful. Judge Sullivan did, however, freeze the defendants’ PayPal account, and permitted service by email.

Court Declines to Divide Ownership of Collabortively Developed Trademark

In a May 29, 2015 ruling, Judge Valerie Caproni decided ownership of the “Fashion Digital” trademark for fashion-related conferences between the two parties that had collaboratively developed the mark, Greenpearl and Hussain. The Court rejected dividing ownership between the parties, noting that “division of ownership has come to be strongly disfavored because it is not beneficial to the public, even if it might be equitable as between the parties.” In awarding ownership of the mark to Hussain, Judge Caproni wrote:

In sum, because there is no dispositive contractual agreement, the Court finds that Hussain is the party who (1) most proximately exerted control over the nature and quality of the services that the consuming public identified with the mark; (2) invented the mark; and (3) was seen by the public as the driving force behind the mark. Fashion Digital was a joint endeavor between Hussain and GreenPearl; because the parties’ joint endeavor has disintegrated, and the Court cannot assign a portion of the mark to each party, the Court finds that the balance of equities weighs in Hussain’s favor.

Court Denies Summary Judgment of Patent Infringement Because of "Battle of the Experts"

In a May 28, 2015 ruling, Judge Jed S. Rakoff denied summary judgment of patent infringement because the parties’ experts had conflicting views on the issue. Judge Rakoff wrote that the plaintiff “has proffered expert testimony that” the accused product contains a particular claim limitation and the defendant “has proffered expert testimony that it does not. Upon careful review, it is clear that the resulting 'battle of experts' involves genuine disputes of material fact precluding judgment as a matter of law. Accordingly, the Court hereby denies both parties' motions for summary judgment.”

Court Rejects Trade Dress Protecton for Point-of-Sale Display as Functional

In a May 26, 2015 ruling, Judge P. Kevin Castel rejected trade dress protection for the counterclaim plaintiff’s point-of-sale display of its goods, and granted summary judgment to the counterclaim defendant.  The counterclaim plaintiff argued that although at least some of the elements of the claimed trade dress are functional, the Court must consider the “overall impression” created by the trade dress.  Judge Castel rejected that argument, quoting a Ninth Circuit case for the proposition that “where the whole is nothing other than the assemblage of functional parts, and where even the arrangement and combination of the parts is designed to result in superior performance, it is semantic trickery to say that there is still some sort of separate ‘overall appearance’ which is non-functional.”  The Court further noted that “where the only similarities between the parties’ trade dresses consist of unprotectable elements, a trade dress infringement claim must fail.”  Judge Castel concluded that recognizing trade dress protection for the counterclaim plaintiff’s display would confer on the counterclaim plaintiff “a marketing advantage based not on brand recognition or advertising prowess, but simply on its right to display its goods more effectively than its competitors.”

Court Declines to Enforce Patent Claim with Uncorrected Error

In a May 12, 2015 ruling, Judge Laura Taylor Swain granted summary judgment partially dismissing the plaintiff’s infringement action because the asserted claims in the patent-in-suit had an uncorrected error that was not evident from the face of the patent. The patent-in-suit issued with a clause that should have been added to one of the claims omitted from the as-issued patent. Judge Swain first found that the error “is not evident from the face of the patent, because the phrase from which it was omitted in [the claim at issue] makes grammatical sense and does not have obvious missing information. Moreover, there is no information on the face of the patent that would alert a reader to any missing limitation.” The Court further found that the omitted phrase was material because it had been added during prosecution specifically to avoid prior art. The Court concluded “that the undisputed material facts direct the conclusion that [the claim at issue in the patent-in-suit] was issued with an omitted material limitation, and that the error is not evident on the face of the patent. Therefore, the uncorrected independent patent claim cannot be asserted in this litigation,” nor can the dependent claims that depend from it.

Court Denies Priority to a Patent Claim, Thus Invalidating It Based on Prior Art

In a May 8, 2015 ruling, Judge P. Kevin Castel found a patent claim to be invalid over prior art despite the patentee’s claim of earlier priority for the claim at issue. Relying on Federal Circuit precedent, the Court noted where a defendant produces prior art with a date preceding the filing date of the patent at issue, the burden shifts to the patentee to provide evidence and argument at least creating an issue of fact that the claim is supported by the written description of the patent from which it claims priority. If the patentee does so, the burden shifts back to the defendant to show by clear and convincing evidence that the earlier written description does not support the claim. In invalidating the claim at issue, Judge Castel wrote:

Under the Videotek burden-shifting framework described earlier, the defendants met their initial burden of production by identifying prior art—the Flex Binders—which, the parties agree, would invalidate Claim 20 if it cannot claim the benefit of the ’640 Patent’s earlier filing date. It was then incumbent upon Chizmar to produce “evidence and argument” that creates a genuine issue of material fact with respect to whether the disclosures of the ’640 Patent satisfy the written description requirement. This Chizmar has failed to do. Accordingly, Claim 20 of the ’140 Patent is invalid as anticipated by the Flex Binders.

Court Suspends Liability Finding Pending Evidentiary Hearing on Whether Plaintiff Falsified Evidence

In an April 30, 2015 ruling and as a follow up to this post, Judge Alvin K. Hellerstein suspended his liability judgment of copyright liability against the defendants pending an evidentiary hearing on whether the defendants' newly discovered evidence "if credited, clearly establishes that Plaintiff attempted to commit a fraud upon this court, going so far as to fabricate evidence and to commit perjury"  Judge Hellerstein wrote that a "sufficient showing has been made to cause me to lose trust in the integrity of the trial testimony. As credibility is very much an issue, an evidentiary hearing is necessary."

Court Dismisses Patent Infringement Action for Lack of Standing

In an April 28, 2015 ruling, Judge Colleen McMahon found that the plaintiff in a patent infringement action lacked standing because of a defect in the patent’s chain of title. The plaintiff’s title to the patent depended upon a transfer from the plaintiff’s wholly-owned subsidiary to the plaintiff. The Court found that not such transfer had taken place. Judge McMahon wrote that there had not been an express assignment, and that the plaintiff had not acquired the patent automatically upon the plaintiff’s filing of a certificate of dissolution for the subsidiary. According to the Court, the mere filing of the certificate does not cause the transfer, which happens only upon the filing of a plan of dissolution within three years of the filing of the initial certificate.

Court Finds Jurisdiction Over Declaratory Judgment Action for Trademark Non-Infringement

In an April 27, 2015 ruling, Judge Thomas P. Griesa found that the Court had summary judgment matter jurisdiction to entertain a declaratory judgment action trademark non-infringement, but that exercising such jurisdiction would serve no useful purpose. In this action, the owner of the “Rolcx” trademark for watches and jewelry sued to invalidate the registered “RLX RALPH LAUREN” and “RALPH LAUREN RLX” marks for the same goods, and the defendant counterclaimed for non-infringement. In finding a justiciable declaratory judgment controversy, Judge Griesa noted:

Multiple facts in the record demonstrate that this question meets the Medlmmune standard for justiciability. First, Rolex acknowledges it will bring an infringement action if [the declaratory judgment plaintiff] produces watches and jewelry bearing those marks.…Second, [the declaratory judgment plaintiff] has already offered and sold, between 2004 and 2007, a watch bearing the RLX mark, demonstrating the reality of the controversy, as well as [its] ability and willingness to launch the products in question. …Third, [the declaratory judgment plaintiff] has entered into a joint venture with [a] watchmaker .… Both sides have vigorously pursued this litigation at considerable expense. All this tends to show that the parties here have a real, substantial dispute concerning the trademarks in question, satisfying the Medlmmune standard and establishing the court's declaratory judgment jurisdiction.

The Court nevertheless found that exercising jurisdiction would not be useful, based in part on “legitimate concerns about whether the parties can litigate questions of infringement or dilution (in connection with the declaratory judgment claim) without evidence flowing from the products’ existence in the markets” (and based in part on redacted material unavailable to the public).

Court Dismisses Claims of Foreign Copyright Infringement Against U.S. Licensees

In an April 22, 2015 ruling, Judge Paul A. Crotty dismissed copyright infringement claims against U.S. licensees of the copyrighted work for actions taken in the U.S. that allegedly facilitated foreign copyright infringement. Under U.S. copyright law, so-called “predicate acts” undertaken in the U.S. that are themselves acts of U.S. copyright infringement can also support claims of foreign copyright infringement. In dismissing the copyright infringement claims against the U.S. licensees here, the Court wrote:

Plaintiffs have failed to allege facts demonstrating a predicate act that in itself violates the U.S. Copyright Act. None of the actions taken by Domestic Defendants constitute a violation of U.S. copyright law, when undertaken within the U.S. For example, allegedly creating duplicate master tapes or electronic files, distributing or streaming [the allegedly infringing work], offering to distribute copies of [the allegedly infringing work], signing agreements, and “authorizing” Affiliate Defendants to commit infringement abroad do not constitute violations of U.S. copyright law because Domestic Defendants possessed a license considered valid under U.S. law.

Court Denies Comity to Conflicting Foreign Decisions

In a March 20, 2015 ruling, Judge Kimba M. Wood, in dismissing the plaintiff’s preliminary injunction motion, declined to grant comity to a decision of a French court about the ownership of the copyright at issue in light of another conflicting French decision. Judge Wood ruled that “[b]ecause the copyright analyses in [the two French cases] are irreconcilable on this potentially critical point, and both foreign litigations remain active and apparently independent, the Court concludes, in its discretion, that it would be premature to afford comity to either holding.” The Court thus dismissed the motion with leave for the plaintiff to refile it at any time.

Court Declines to Dismiss Unclean Hands Defense

In a March 19, 2015 ruling, Judge Thomas P. Griesa declined to strike the defendant’s defense of unclean hands. Although the plaintiff is asserting a patent infringement claim, the unclean hands defense relates to the plaintiff’s alleged inequitable interference with the defendant’s supply agreement with a third party. The Court held that by “seeking an injunction against defendant [on the patent infringement claim], plaintiff comes to the court in equity” so the “defense of unclean hands deserves to be tried on the merits.”

Court Denies Attorneys’ Fees to Defendant Securing Stipulation of Dismissal With Prejudice

 In a January 26, 2015 ruling, Judge Katherine Polk Failla refused to award attorneys’ fees to a defendant in a copyright case who secured a stipulation of dismissal with prejudice early in the case. The Court did find that the defendant was a “prevailing party” under the Copyright Act fee provision, writing:

Here, the parties agreed to a stipulation of dismissal with prejudice pursuant to Rule 41(a)(1)(A)(ii), because Plaintiff’s opportunity to voluntarily dismiss unilaterally pursuant to Rule 41(a)(1)(A)(i) had expired upon [the defendant’s] filing of an answer. Such a dismissal “has the effect of a final adjudication on the merits favorable to defendant and bars future suits brought by plaintiff upon the same cause of action.” . . . Therefore, because the stipulation of dismissal “immunize[s] [the] defendant from the risk of further litigation on the merits,” . . . Defendant has prevailed.

Judge Failla nevertheless denied an award of fees on the merits, finding that the plaintiff’s claim neither was objectively baseless, frivolous nor brought in bad faith. In response to the defendant’s argument that the plaintiff should have known it was not a proper party, the Court noted the defendant’s tangled business affairs with those of its co-defendant, and wrote that the plaintiff had no factual basis by which to verify [the defendant’s] description of [its business] relationships.” Judge Failla further wrote that her ruling denying in part of a companion defendant’s motion to dismiss suggested that the plaintiff’s claims were not frivolous.