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.