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.

Court Denies Summary Judgment Because of Factual Dispute Between Experts

In a January 14, 2015 ruling, Judge Coleen McMahon denied summary judgment in this patent infringement action because of the parties’ experts’ conflicting testimony. The Court wrote:

In sum, the two sides’ experts differ on two critical points: whether [the prior art] and the [patent-in-suit] disclose the same elements and limitations, and whether one acknowledged difference between them (the plurality of numbers) would have been “obvious” to one skilled in the art. Each side has presented testimony from a purported expert to support its point of view. The experts do not agree. That precludes summary judgment.

In commenting on the experts’ disagreement about the qualifications for a person skilled in the art concerning the patent-in-suit, Judge McMahon wrote:

Two more disparate descriptions of what constitutes a “person having ordinary skill in the art” I cannot imagine. . . . The Court has no idea who is correct, or for that matter how to resolve the issue; this is the first case I can recall in which the parties did not agree on the qualifications of the hypothetical “person having ordinary skill in the art.” . . . If the parties cannot agree on who qualifies as a person skilled in the art, then there is a question of fact to be resolved. This precludes summary judgment as well.

We'll be back soon.

We are on hiatus until January, 2015.  There will be new posts starting then.

Court Declines to Dismiss Patent Infringement Claim on Grounds of Laches and Equitable Estoppel

In a June 18, 2014 ruling, Judge P. Kevin Castel denied defendant's motion to dismiss this patent infringement action on the grounds of laches and equitable estoppel.  With regard to laches, the defendant argued that some discussions between the parties before the patents-in-suit triggered the period for measuring laches, but Judge Castel ruled that the period ran from the issuance of the patents.  The Court also noted that "[f]acts concerning factors, such as the unreasonableness of the delay or the lack of excuse do not appear" in the amended complaint, precluding dismissal.  Judge Keenan likewise rejected the equitable estoppel defense, finding that "facts necessary to establish the affirmative defense of equitable estoppel do not appear on the face of the" amended complaint.

Court Denies Reconsideration of Copyright Infringement Summary Judgment Ruling

In a June 12, 2014 ruling, Judge John F. Keenan denied reconsideration of his March 24, 2014 ruling granting plaintiffs partial summary judgment on their copyright infringement claims.  Defendants argued that the Court's original rulings that substantial similarity only need be shown in the absence of evidence of direct copying and that the Court in any event applied the wrong standard for substantial similarity were erroneous because they "overlooked binding Second Circuit authority."  In rejecting these arguments, the Court wrote:

Even if a substantial similarity analysis is still required when actual direct copying is already established, that would not affect Defendants' liability because the Court went on to engage in this analysis.  As Defendants acknowledge, the Court compared the images on the website to the copyrighted photographs and determined that "the images on the masthead are substantially similar because they are exact copies."

Judge Keenan rejected defendants' argued that one of the photographs at issue was not substantially similar because it was "flipped" in orientation, noting that this "new argument is belied by their concession that the image was actually copied from the photograph registered with on of Plaintiffs' copyrighted albums."

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.