Justia Intellectual Property Opinion Summaries

Members of the rap group 2 Live Crew, including Mark Ross, created five albums between 1986 and 1989. Through a written agreement, the group assigned the sound recording copyrights to Luke Records, a company owned by one of the group’s members. In 1995, following Luke Records’ bankruptcy, these copyrights were sold to Lil’ Joe Records. In 2000, Mark Ross filed for Chapter 7 bankruptcy; his termination interests in these copyrights were never listed or addressed in his bankruptcy proceedings. Years later, within the statutory window, Ross, another group member, and heirs of a third served a notice attempting to terminate the copyright grants to Luke Records, as permitted by the Copyright Act.The United States District Court for the Southern District of Florida initially concluded that Ross’s termination interests did not enter his bankruptcy estate, interpreting the Copyright Act and Bankruptcy Code to exclude them. The court denied both parties’ motions for summary judgment on the effectiveness of the termination notice, and the case proceeded to trial. After the jury’s factual findings, the district court concluded the termination notice was valid. Lil’ Joe Records appealed the district court’s final judgment, the denial of its motion for summary judgment, and the denial of its motion for reconsideration.The United States Court of Appeals for the Eleventh Circuit held that Ross’s termination interests were property of his bankruptcy estate under the Bankruptcy Code, notwithstanding the Copyright Act’s inalienability restriction. Because these interests were never scheduled or administered by the bankruptcy court, they remained with the bankruptcy estate when Ross attempted to exercise them. As a result, Ross could not validly sign the termination notice, and the group did not have the required majority to terminate the copyright grants. The Eleventh Circuit reversed the district court’s judgment and remanded the case for further proceedings. View "Lil' Joe Records, Inc. v. Won" on Justia Law

AGI SureTrack LLC brought suit against Farmers Edge Inc. and its U.S. subsidiary, alleging infringement of several patents relating to automated systems and methods for capturing, processing, and sharing farming data. The core patented technology involved using a relay device with generic computer components to collect real-time data from various farming equipment, process this information, and share it via an online exchange. The patent claims described a system using a microprocessor, bus connector, GPS receiver, and memory storage, together with software that records and interprets data from farming implements.The United States District Court for the District of Nebraska granted summary judgment in favor of Farmers Edge. The court found that the asserted patent claims were directed to patent-ineligible subject matter under 35 U.S.C. § 101. Specifically, the court concluded that the claims merely used generic computer components to collect and process data and did not constitute an inventive concept. The district court also ruled that the case was not exceptional and denied Farmers Edge’s request for attorney’s fees under 35 U.S.C. § 285.On appeal, the United States Court of Appeals for the Federal Circuit reviewed both AGI’s challenge to the finding of patent ineligibility and Farmers Edge’s cross-appeal regarding exceptionality. The Federal Circuit affirmed the district court’s determination that the asserted patents were not patent-eligible, holding that the claims were directed to an abstract idea and lacked any inventive concept beyond conventional technology. However, the appellate court vacated the district court’s summary determination that the case was not exceptional, finding the lower court failed to provide adequate reasoning or allow both parties to present argument on the issue. The case was remanded for further proceedings on exceptionality and attorney’s fees. View "AGI SURETRACK LLC v. FARMERS EDGE INC. " on Justia Law

A clothing company filed a lawsuit against multiple e-commerce vendors, including a Chinese company, alleging trademark infringement, counterfeiting, unfair competition, and related claims under the Lanham Act. The defendants were identified in a document attached to the complaint. Because the defendants were primarily Chinese entities operating online, the plaintiff asserted it was difficult to determine their exact identities and addresses. The plaintiff sought and was granted permission by the United States District Court for the Northern District of Illinois to serve the defendants by email, which included sending a link to the complaint and other documents. The defendant, Hangzhou, engaged in settlement discussions but did not appear in court, leading to a default judgment. The court’s order also allowed the plaintiff to collect funds from third parties, including from Hangzhou’s Amazon account.After the plaintiff collected a portion of the judgment, Hangzhou appeared and moved to vacate the default judgment, primarily arguing that service by email in China was prohibited under the Hague Service Convention and thus the judgment was void for lack of proper service. The district court denied this motion, concluding that the Convention permits email service in China, and rejected other arguments related to Illinois post-judgment procedures.On appeal, the United States Court of Appeals for the Seventh Circuit reviewed the district court’s rulings. The appellate court held that the Hague Service Convention prohibits service by email in China, contrary to the district court’s conclusion. However, the appellate court determined that the district court must first decide whether the Convention applies to this case, specifically whether the defendant’s address was “not known,” which would render the Convention inapplicable. The Seventh Circuit therefore reversed the district court’s decision denying the motion to vacate the default judgment and remanded the case for further proceedings to resolve this threshold issue. View "Kangol LLC v Hangzhou Chuanyue Silk Import & Export Co., Ltd." on Justia Law

A medical device company that manufactures an adhesive, wearable insulin patch pump alleged that a competitor misappropriated trade secrets and infringed patents. The competitor had hired several former employees of the company, including a director who had extensive knowledge of the company’s product design and development. The alleged misappropriation occurred in 2018, when this former director provided design files and technical information to the competitor as it developed a second-generation insulin patch pump.The case was filed in the United States District Court for the District of Massachusetts, which bifurcated the trade secret and patent claims. The company moved for a preliminary injunction, which the district court granted, but the United States Court of Appeals for the Federal Circuit reversed that decision in Insulet Corp. v. EOFlow, Co. (“Insulet I”), finding that the district court had not properly analyzed the statute of limitations and other elements. On remand, the district court denied both sides’ summary judgment motions on the statute of limitations for the trade secret misappropriation claim, and the matter proceeded to a jury trial. The jury found in favor of the plaintiff on four trade secrets, found the claims timely, awarded damages, and the district court entered judgment, imposed joint and several liability, and issued a permanent injunction.The United States Court of Appeals for the Federal Circuit reviewed the case. It held that it had jurisdiction because the patent claims had been effectively dismissed with prejudice due to the expiration of the statute of limitations for at least one alleged infringing act. On the merits, the Federal Circuit held that, under the applicable statute of limitations standard, the evidence established the plaintiff knew or should have known of the alleged misappropriation more than three years before filing suit. The Court found the claims time-barred and reversed the judgment. View "INSULET CORP. v. EOFLOW, CO. LTD. " on Justia Law

George Bernard Worrell, Jr., a foundational member and arranger for the musical group Parliament-Funkadelic, collaborated with George Clinton and Thang, Inc. from 1969 to 1981. In 1976, Worrell was presented with a contract (the “1976 Agreement”) by Thang, Inc., which purported to grant Thang full ownership of sound recordings Worrell contributed to, in exchange for royalties. Over the years, Worrell and his estate asserted that Thang and Clinton failed to pay royalties due under this agreement. Worrell died in 2016, and his estate became the plaintiff in subsequent litigation.After Worrell’s estate sued Thang and Clinton in New York state court for breach of contract related to the 1976 Agreement, the New York Supreme Court dismissed the suit. The court found that the agreement was not enforceable because it had not been signed by Thang, and the estate did not refute this. Subsequently, the estate filed a new action in the United States District Court for the Eastern District of Michigan, seeking a declaration of joint copyright ownership in the sound recordings and an accounting of royalties. The district court granted summary judgment for the defendants on statute of limitations grounds, holding that the estate’s copyright claims were untimely.The United States Court of Appeals for the Sixth Circuit reviewed the case and determined that genuine disputes of material fact precluded summary judgment. The court held that, given the unique circumstances—including the parties’ decades-long conduct in apparent reliance on the 1976 Agreement—there was a factual question as to whether Clinton and Thang had “plainly and expressly repudiated” Worrell’s copyright co-ownership before 2020. The Sixth Circuit reversed the district court’s judgment and remanded for further proceedings, holding that part of the estate’s copyright-ownership claim is timely. The court also found genuine disputes of material fact as to Worrell’s status as a co-author of the recordings. View "Estate of Worrell v. Thang, Inc." on Justia Law

Guild Mortgage Company LLC and CrossCountry Mortgage LLC are direct competitors in the residential mortgage industry. Over an 18-month period, several Guild employees in the Kirkland, Washington branch, including the branch manager and other high-level staff, were allegedly recruited by CrossCountry while still employed by Guild. According to the complaints, these employees solicited their colleagues to also move to CrossCountry, diverted customers and loan applications, and accessed Guild’s computer systems to take confidential and proprietary information. The employees had signed agreements with Guild prohibiting such conduct, and Guild subsequently lost nearly its entire Kirkland branch workforce to CrossCountry.After Guild initiated arbitration against the former employees and prevailed, it filed a lawsuit in the Superior Court of San Diego County against CrossCountry. Guild’s claims included interference with economic advantage, interference with contract, violation of California’s Comprehensive Computer Data Access and Fraud Act (CCDAFA), unfair competition, and aiding and abetting tortious conduct. The Superior Court sustained CrossCountry’s demurrers, finding that the claims were preempted by the California Uniform Trade Secrets Act (CUTSA) or otherwise failed to state a cause of action, and dismissed the case without leave to amend.The Court of Appeal, Fourth Appellate District, Division One, reviewed the case. It held that Guild had adequately alleged actionable duties of loyalty and, for the branch manager, fiduciary duty, that were breached by the employees and aided by CrossCountry. The court found that the claims for interference and violation of the CCDAFA were not displaced by CUTSA because they arose from conduct beyond trade secret misappropriation. The court also held that the unfair competition claim could proceed since the other claims were viable. The Court of Appeal reversed the judgment in favor of CrossCountry and remanded for further proceedings. View "Guild Mortgage Company v. CrossCounty Mortgage" on Justia Law

A holding company and its North Carolina insurance agency subsidiary, which function as intermediaries between clients and insurance carriers, experienced significant employee dissatisfaction after a shift in commission structure and a pay freeze in early 2020. This led to multiple employees, including both producers and account managers, leaving over several months to join a direct competitor, a new agency formed by a former employee. The departing employees had signed agreements with non-solicitation and confidentiality clauses. During their departures, some employees forwarded company documents to personal accounts, and, after litigation began, engaged in extensive deletion of electronic evidence.Previously, in Guilford County Superior Court, the plaintiffs had sued a former producer, with most claims dismissed except for breach of employment agreement, and that suit was later settled. In the current litigation, after discovery, both sides sought partial summary judgment in the North Carolina Business Court (Superior Court for Complex Business Cases). The Business Court granted summary judgment in part for both parties, including a grant of adverse inference against defendants for spoliation of evidence, but did not specify how that inference would apply to each claim.The Supreme Court of North Carolina reviewed the interlocutory appeal. It affirmed the adverse inference ruling but remanded for the Business Court to clarify its specific application. The Court reversed the Business Court’s summary judgment that two client lists could not be trade secrets, holding there were genuine issues of fact. It clarified the standard for misappropriation of trade secrets under state law, requiring evidence of a specific opportunity to acquire trade secrets without authorization. The Court remanded claims related to trade secrets, enforcement of non-solicitation provisions (pending factual findings on the scope of the employer and affiliates), and certain computer fraud claims for further proceedings. Summary judgment for defendants on unjust enrichment was affirmed, and the Business Court was directed to issue a written opinion for claims it disposed of in a summary order. The disposition was thus affirmed in part, reversed in part, and remanded for further proceedings. View "Rel. Ins., Inc. v. Pilot Risk Mgmt. Consulting, LLC" on Justia Law

Ford retained Versata to develop specialized software to manage its vehicle configuration processes, resulting in two main products: Automotive Configuration Manager (ACM) and Materials Cost Analytics (MCA). The parties entered into a licensing agreement in 2004, which eventually expired in 2014 without renewal. Ford then released its own software, PDO, which Versata alleged incorporated its proprietary trade secrets from ACM and MCA. Disputes arose when Ford sought a declaratory judgment of non-infringement and non-misappropriation, while Versata counterclaimed, alleging trade secret misappropriation under the Defend Trade Secrets Act (DTSA) and the Michigan Uniform Trade Secrets Act (MUTSA), as well as breach of contract.The United States District Court for the Eastern District of Michigan excluded Versata’s damages expert’s testimony regarding trade secret damages, limiting Versata to a reasonable royalty model based solely on the parties’ prior licensing history. At trial, the jury found Ford liable for misappropriating three ACM trade secrets and breaching the licensing agreement, awarding Versata $22,386,000 for trade secret misappropriation and $82,260,000 for breach of contract. However, the district court subsequently reduced these awards: it set trade secret damages to zero, citing insufficient evidence regarding the time required for Ford to independently develop the misappropriated trade secrets, and reduced breach of contract damages to $3, finding Versata’s evidence insufficient to support the jury’s calculation.On appeal, the United States Court of Appeals for the Federal Circuit vacated the district court’s judgment on trade secret damages and remanded for a new trial, holding that Versata was entitled to seek unjust enrichment damages under both the DTSA and MUTSA, and that the district court erred in precluding consideration of alternative damages models. The Federal Circuit also reversed the reduction of the breach of contract damages, reinstating the jury’s $82,260,000 award, and affirmed the denial of Ford’s motion for judgment as a matter of law on trade secret misappropriation liability. View "VERSATA SOFTWARE, LLC v. FORD MOTOR COMPANY " on Justia Law

An engineer who had worked for more than two decades at a manufacturing company resigned after a demotion and accepted a leadership position at a competitor. As he was leaving, the company discovered that he had potentially printed several documents containing confidential information about its products. Although forensic analysis could not confirm that he actually printed these documents, the company concluded he had taken trade secrets and sued him and his new employer, alleging breach of a confidentiality agreement and misappropriation of trade secrets. The company sought a preliminary injunction to prevent disclosure of the alleged secrets and to restrict the engineer’s work with the competitor.The United States District Court for the Northern District of Ohio denied the preliminary injunction. The district court ruled that the company failed to meet its burden by not providing “clear and convincing” evidence for each of the four required factors for a preliminary injunction: likelihood of success on the merits, risk of irreparable harm, risk of harm to others, and the public interest. The court treated each factor as a separate prerequisite, each requiring clear and convincing proof.The United States Court of Appeals for the Sixth Circuit reviewed the district court’s decision for abuse of discretion, clarifying that the district court had committed a legal error. The appellate court held that the correct approach is to weigh all four preliminary injunction factors together in a sliding-scale analysis, not to require clear and convincing evidence for each factor individually. It explained that a heightened standard of proof is not mandated unless required by statute, the Constitution, or in rare cases involving unusually coercive government action, none of which applied here. The Sixth Circuit reversed the district court’s decision and remanded the case for reconsideration under the appropriate standard. View "PCC Airfoils, LLC v. Daugherty" on Justia Law

Two companies, both joint owners of several patents related to warm-mix asphalt paving, entered into a licensing agreement in 2008 granting an exclusive, worldwide, royalty-bearing license to another company (and, after a reorganization, its successor). The agreement allowed the licensee to manufacture, use, sell, and sublicense the patented products, but required that sublicensing terms be subject to the patent owners’ prior review and approval (not to be unreasonably withheld). The patent owners retained certain rights, including the right to sue for infringement (with shared or independent control depending on the circumstances), receive royalties, and veto sublicenses. The patent owners also kept limited rights to practice the invention for research and to use products purchased from the licensee.In 2024, the patent owners sued two defendants, alleging infringement of the six patents. The defendants moved to dismiss for lack of Article III standing. The United States District Court for the District of Delaware granted the motion, finding that the patent owners had transferred away all exclusionary rights through the license, and that their retained right to sue was not sufficient for constitutional standing. The district court relied on previous decisions holding that a bare right to sue, separated from other substantial patent rights, did not confer standing.On appeal, the United States Court of Appeals for the Federal Circuit reversed. The Federal Circuit held that the patent owners retained an exclusionary right sufficient for Article III standing, namely the right to sue for infringement that was not rendered illusory by the licensee’s rights. The court concluded that the combination of the right to sue, the right to veto sublicenses, and the continuing royalty interest demonstrated a concrete, non-illusory exclusionary interest. The case was remanded for further proceedings. View "A.L.M. HOLDING COMPANY v. ZYDEX INDUSTRIES PRIVATE LTD. " on Justia Law