Court Denies Stay of Patent Infringement Damages Trial During Interlocutory Appeal

In a March 21, 2014 ruling, Judge Colleen McMahon declined to stay proceedings during a defendant’s interlocutory appeal of the of the Court’s liability rulings in this patent infringement action. In considering the request, the Court wrote that the “decision whether to stay a damages trial pending an interlocutory appeal pursuant to 28 U.S.C. § 1292(c)(2) rests in the sound discretion of the district court,” balancing “‘the harm that a stay might cause to the party who has obtained judgment’” against “‘the harm that denial of a stay would cause the losing party.’” The moving defendant premised its motion “on its assumption that the Federal Circuit is going to reverse this Court’s rulings on claim construction, infringement and/or validity.”

Judge McMahon first found that the moving defendant “has not offered me any reason to doubt the correctness of my previous rulings – at least one of which I described as ‘not even close.’” The Court then considered the remaining factors concerning a stay, i.e., whether: (1) the non-moving party will suffer any prejudice from a stay; (2) the party moving for the stay will be unduly burdened by the denial of a stay; (3) the interests of the Court in an expeditious resolution of the case will be served by a stay; (4) the interests of non-parties will be affected by a stay; and (5) there is any public interest in the grant or denial of a stay. Judge McMahon concluded that as “far as this Court is concerned, [the moving defendant] has failed to identify any basis for concluding that it has a ‘substantial possibility’ of prevailing on its interlocutory appeal, and the other relevant factors either weigh in favor of denying [the] motion or are neutral.”

Court Certifies Interlocutory Questions About DCMA Safe Harbor to Second Circuit

In a December 31, 2013 decision, Judge Ronnie Abrams considered the application of the “Safe Harbor” defense in the Digital Millennium Copyright Act to plaintiffs’ claims against Vimeo, LLC. Vimeo operates a service that allows users to upload videos that they have created. The plaintiff music publishers sued Vimeo “asserting claims for direct, contributory, vicarious, and common law copyright infringement, as well as for inducement to infringe copyright and unfair compliance.” In a prior decision, the Court ruled that certain videos on the Vimeo service met the Safe Harbor requirements, others did not, and that “the Safe Harbor did not extend to videos containing music recorded before February 15, 1972.” Vimeo sought reconsideration of the denial of Safe Harbor status as to some of the videos, and sought leave to file an interlocutory appeal about the pre-February 15, 1972 recordings.

Regarding the reconsideration motion, the Court noted that the “Safe Harbor limits the liability of service providers for copyright infringement that occurs ‘by reason of the storage at the direction of a user of material that resides on a system or network controlled or operated by or for the service provider,’ as long as the provider satisfies certain criteria.” Vimeo argued on reconsideration that the only evidence that Vimeo had viewed certain of the challenged videos was that its employees could review videos in the accounts of the users who had uploaded these videos, not that they had done so. Judge Abrams ruled that this evidence was too tenuous to permit the Court to conclude that Vimeo’s employees had in fact viewed the videos. The Court largely rejected, however, Vimeo’s argument on reconsideration that even if Vimeo had viewed the videos, they did not have “red flag” knowledge – i.e., it was not “obvious” that they infringed the plaintiffs’ copyrights – finding fact questions for the jury about that issue.

The Court also agreed to certify two questions for interlocutory review: (1) the issue about the pre-February 15, 1972 recordings, and (2) “whether . . . a service provider’s viewing of a user-generated video containing all or virtually all of a recognizable, copyrighted song may establish ‘facts or circumstances’ giving rise to ‘red flag’ knowledge of infringement.” As to the first issue, Judge Abrams ruled that it is a pure question of law, and “that there exists a substantial ground for difference of opinion on this issue.” As to the second issue, the Court noted that although the inquiry depends in part on the contents of each video, the defendants do not contest for purposes of the appeal that the videos “contain visual images set to copyrighted songs played essentially in their entirety.” The Court further found that determining whether a defendant has sufficient “knowledge of infringement [to void the Safe Harbor] is a difficult question that has important ramifications for service providers such as Vimeo,” and that there is a “substantial ground for difference of opinion” on the issue. Thus, the Court certified both issues for interlocutory review.

Court Finds Trade Dress Generic and Dismisses Infringement Claim, Stay Infringement Claim and Denies Interlocutory Appeal

In a December 11, 2013 ruling, Judge Shira A. Scheindlin granted defendant Regent Baby Products Corp.'s summary judgment motion to dismiss plaintiff Luv N' Care, Ltd.'s trade dress infringement action over infant sippy cups.  In considering the motion, Judge Scheindlin noted that a "plaintiff asserting a trademark infringement claim must show first that its trade dress or trademark is a protectable interest under the Lanham Act, and second that there is a likelihood of confusion.  If a plaintiff offers no evidence of a protectable interest, a court need not consider likelihood of confusion."

Regent did not contest likelihood of confusion, but instead argued that Luv N' Care's cups are not entitled to trade dress protection because they are generic.  In support of its argument, Regent submitted "exhaustive evidence" of numerous designs similar to Luv N' Care's cups "that have been widely available on the market for over two decades, through submission of third party catalogs and websites of online retailers."  Judge Scheindlin accepted this evidence, and ruled:

There is no genuine issue of material fact as to whether these designs are generic.  [Luv N' Care's] trade dress descriptions refer to common shapes frequently used in the sippy cup industry -- a "generally cylindrical cup with a slightly wider upper portion" and a cap with a "bulb-like base and a slightly pointed top" or a "football-helmet shaped cap" with a "ring shaped base" -- that even when configured together would simply be too broad and too general to warrant trade dress protection. . . . [T]hese general shapes and configurations are ubiquitous in the sippy cup market and do not warrant Lanham Act protection.

The Court also rejected Luv N' Care's argument that its designs had acquired secondary meaning "as irrelevant for generic trade dress.  Second Circuit law is clear that 'even a showing of secondary meaning is insufficient to protect product designs that are overbroad or generic' and that '[g]eneric trade dress in never entitled to protection.'"  The Court thus dismissed the trade dress claims.

In a subsequent February 13, 2014 ruling, Judge Scheindlin stayed the remaining design patent infringement claims so as to avoid duplicative trials of the trade dress and design patent infringement claims should the trade dress claims proceed to trial first, and the design patents later survive reexamination.  The Court also declined to permit an interlocutory appeal, finding that the plaintiff's request did "not raise a controlling question of lwa, 'a new legal question or [a legal issue] of special consequence appropriate for interlocutory review."

Interlocutory Appeal Denied in Copyright Action

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