Justia Intellectual Property Opinion Summaries

A group of major record labels sued Grande Communications Networks, LLC, an internet service provider, for contributory copyright infringement. The plaintiffs alleged that Grande knowingly provided internet services to subscribers who used them to infringe on the plaintiffs' copyrighted works. The plaintiffs presented evidence that Grande received over 1.3 million infringement notices from Rightscorp, a company that identifies infringing activity on peer-to-peer networks, but Grande did not terminate or take action against repeat infringers. Instead, Grande continued to provide internet services to these subscribers, despite knowing about their infringing activities.The United States District Court for the Western District of Texas held a three-week jury trial. The jury found Grande liable for willful contributory copyright infringement and awarded the plaintiffs $46,766,200 in statutory damages. Grande moved for judgment as a matter of law (JMOL) on the issue of liability and for a new trial on damages, but the district court denied these motions. Grande then appealed, challenging the district court's rulings on its JMOL motion, the jury instructions, and the final judgment. The plaintiffs filed a conditional cross-appeal regarding a jury instruction.The United States Court of Appeals for the Fifth Circuit reviewed the case and upheld the jury's verdict, finding that the plaintiffs had provided sufficient evidence to support the jury's finding of contributory copyright infringement. The court concluded that Grande had knowledge of its subscribers' infringing activities and materially contributed to the infringement by continuing to provide internet services without taking basic measures to prevent further damage. However, the court found that the district court erred in awarding statutory damages for each individual song rather than for each album, as the Copyright Act treats all parts of a compilation as one work for statutory damages purposes. Consequently, the court vacated the damages award and remanded the case for a new trial on damages. The plaintiffs' conditional cross-appeal was dismissed as moot. View "UMG Recordings v. Grande Communications Networks, LLC" on Justia Law

AlexSam, Inc. filed a complaint against Aetna, Inc. alleging that Aetna marketed Mastercard-branded and VISA-branded products that infringed two claims of AlexSam’s U.S. Patent No. 6,000,608. The patent, which expired in 2017, covers a multifunction card system using a central processing hub to perform specialized card functions through an existing banking network. AlexSam claimed that Aetna’s products infringed the patent by using this system.The U.S. District Court for the District of Connecticut dismissed AlexSam’s complaint, finding that Aetna’s Mastercard products were licensed under a 2005 agreement between AlexSam and Mastercard, and that AlexSam failed to state a plausible claim of direct infringement for the VISA products. The court concluded that the license covered all transactions involving Mastercard products and that AlexSam’s allegations against Aetna’s VISA products were implausible because they did not show that Aetna itself performed the infringing acts.The United States Court of Appeals for the Federal Circuit reviewed the case and found that the district court erred in its interpretation of the license agreement and in dismissing the claims against the VISA products. The appellate court held that the license agreement only covered transactions involving activation or adding value to an account, not all transactions involving Mastercard products. Therefore, some of the alleged infringing activities could fall outside the scope of the license. The court also found that AlexSam’s complaint sufficiently alleged that Aetna directly and indirectly infringed the patent with its VISA products, providing enough detail to make the claims plausible.The Federal Circuit vacated the district court’s dismissal of the claims related to both the Mastercard and VISA products and remanded the case for further proceedings. The appellate court emphasized that the district court must take all well-pled factual allegations as true when evaluating a motion to dismiss. View "ALEXSAM, INC. v. AETNA, INC. " on Justia Law

The case involves a dispute between two companies, 1-800 Contacts, Inc. (Plaintiff-Appellant) and JAND, Inc., doing business as Warby Parker (Defendant-Appellee). 1-800 Contacts alleged that Warby Parker used its trademarks in keyword search advertisements, violating the federal Lanham Act and New York State common law. Specifically, 1-800 Contacts claimed that Warby Parker purchased keywords consisting of 1-800 Contacts' trademarks to divert customers searching for 1-800 Contacts to Warby Parker's website. However, 1-800 Contacts did not allege that Warby Parker used its trademarks in any other way beyond purchasing them as keywords.The United States District Court for the Southern District of New York granted Warby Parker's motion for judgment on the pleadings, dismissing the case. The district court applied the Polaroid test to determine the likelihood of consumer confusion and found that although 1-800 Contacts' trademarks were strong and there were indications of bad faith by Warby Parker, these factors were insufficient to establish a likelihood of consumer confusion. The court emphasized that Warby Parker's advertisements and landing pages clearly displayed Warby Parker's own mark, which was substantially different from 1-800 Contacts' marks.The United States Court of Appeals for the Second Circuit reviewed the case and affirmed the district court's judgment. The appellate court held that the mere act of purchasing a competitor's trademarks as keywords does not constitute trademark infringement. It found that 1-800 Contacts failed to plausibly allege any likelihood of consumer confusion under the Polaroid test. The court noted that Warby Parker's advertisements and landing pages did not use 1-800 Contacts' trademarks and were clearly marked with Warby Parker's own branding, making it unlikely that consumers would be confused about the source or affiliation of the advertisements. View "1-800 Contacts, Inc. v. JAND, Inc." on Justia Law

In 2006, a footwear company sued several competitors for patent infringement. One of the competitors, Dawgs, counterclaimed in 2016, alleging that the plaintiff falsely advertised its product material, Croslite, as "patented," "proprietary," and "exclusive," misleading consumers about the nature and quality of its products. Dawgs argued that these false claims caused consumers to believe that Croslite was superior to other materials used in competitors' products.The United States District Court for the District of Colorado granted summary judgment in favor of the plaintiff, Crocs, concluding that Dawgs' counterclaim failed as a matter of law. The district court determined that the false advertising claims were akin to claims of inventorship, which are not actionable under Section 43(a) of the Lanham Act, based on precedents set by the Supreme Court in Dastar Corp. v. Twentieth Century Fox Film Corp. and the Federal Circuit in Baden Sports, Inc. v. Molten USA, Inc.The United States Court of Appeals for the Federal Circuit reviewed the case and reversed the district court's decision. The appellate court held that a cause of action under Section 43(a)(1)(B) of the Lanham Act arises when a party falsely claims that it possesses a patent on a product feature and advertises that feature in a way that misleads consumers about the nature, characteristics, or qualities of the product. The court found that Dawgs had sufficiently alleged that Crocs' false claims about Croslite being patented misled consumers about the material's qualities, thus stating a valid cause of action under the Lanham Act. The case was remanded for further proceedings. View "CROCS, INC. v. EFFERVESCENT, INC. " on Justia Law

Provisur Technologies, Inc. owns patents related to food-processing machinery, specifically high-speed mechanical slicers and a fill and packaging apparatus. Provisur sued Weber, Inc. and its affiliates, alleging that Weber's food slicers and SmartLoader products infringed on these patents. The case was tried before a jury, which found that Weber willfully infringed several claims of Provisur's patents and awarded Provisur approximately $10.5 million in damages.The United States District Court for the Western District of Missouri denied Weber's motions for judgment as a matter of law (JMOL) on noninfringement and willfulness, as well as a motion for a new trial on infringement, willfulness, and damages. Weber appealed these decisions.The United States Court of Appeals for the Federal Circuit reviewed the case. The court affirmed the district court's denial of JMOL for noninfringement regarding the '812 and '436 patents, as Weber conceded its noninfringement arguments were no longer available due to an intervening decision. However, the court reversed the district court's denial of JMOL for noninfringement of the '936 patent, finding that Provisur failed to provide sufficient evidence that Weber's SmartLoader could be readily configured to infringe the patent.The court also reversed the district court's denial of JMOL on willfulness, ruling that the evidence presented, including testimony about Weber's failure to consult a third party, was insufficient to establish willful infringement. Additionally, the court found that the district court abused its discretion in allowing Provisur to use the entire market value rule for calculating damages without sufficient evidence that the patented features drove customer demand for the entire slicing line. Consequently, the court reversed the denial of a new trial on damages.The case was remanded for further proceedings consistent with the Federal Circuit's decision. View "PROVISUR TECHNOLOGIES, INC. v. WEBER, INC. " on Justia Law

This case involves a dispute over the "Pollo Picú" trademark used in the sale of fresh chicken. Productos Avícolas del Sur, Inc. (PAS) sold chicken under this trademark until 2011, when financial difficulties forced the company to stop. In 2016, To-Ricos, Ltd. (To-Ricos) applied to register the Picú mark, believing PAS had abandoned it. PAS opposed the application, leading To-Ricos to seek a declaratory judgment in federal district court to establish its ownership of the mark. The district court granted summary judgment for To-Ricos, concluding that PAS had abandoned the mark.The United States District Court for the District of Puerto Rico found that PAS had not used the Picú mark for at least three consecutive years, establishing a prima facie case of abandonment. PAS argued that its financial difficulties and ongoing litigation with its bank excused its nonuse of the mark and that it intended to resume use. However, the district court determined that PAS did not provide sufficient evidence of intent to resume use within the statutory period and thus granted summary judgment in favor of To-Ricos.The United States Court of Appeals for the First Circuit reviewed the case and affirmed the district court's decision. The appellate court held that PAS failed to rebut the presumption of abandonment. PAS's attempts to sell the mark in 2012, its 2014 settlement agreement with the bank, and its 2017 licensing agreement with IMEX did not demonstrate an intent to resume use of the mark within the relevant statutory period. The court emphasized that mere explanations for nonuse or vague intentions to resume use are insufficient to rebut the presumption of abandonment. Consequently, the court affirmed the district court's grant of summary judgment, establishing To-Ricos as the rightful owner of the Picú mark. View "To-Ricos, Ltd. v. Productos Avicolas del Sur, Inc." on Justia Law

In 2020, Mix Creative Learning Center, an art studio offering children's art lessons, began selling online art kits during the pandemic. These kits included reproductions of artworks from Michel Keck's Dog Art series. Keck sued Mix Creative and its proprietor for copyright and trademark infringement, seeking enhanced statutory damages for willful infringement.The United States District Court for the Southern District of Texas found that the fair use defense applied to the copyright claim and granted summary judgment to Mix Creative. The court also granted summary judgment on the trademark claim, even though Mix Creative had not sought it. Following this, the district court awarded fees and costs to Mix Creative under 17 U.S.C. § 505 but declined to hold Keck’s trial counsel jointly and severally liable for the fee award under 28 U.S.C. § 1927.The United States Court of Appeals for the Fifth Circuit reviewed the case and affirmed the district court's judgment. The appellate court held that the fair use defense applied because Mix Creative’s use was transformative and unlikely to harm the market for Keck’s works. The court also found that any error in the district court’s sua sponte grant of summary judgment on the trademark claim was harmless, given the parties' concession that the arguments for the copyright claim applied to the trademark claim. Lastly, the appellate court ruled that the district court did not abuse its discretion in awarding fees to Mix Creative or in refusing to hold Keck’s attorneys jointly and severally liable for the fee award. View "Keck v. Mix Creative Learning Center" on Justia Law

Astellas Pharma, Inc. and its affiliates (collectively, "Astellas") sued Sandoz Inc. and other defendants for patent infringement related to their attempts to market generic versions of Myrbetriq®, a drug used to treat overactive bladder. The patent in question, U.S. Patent 10,842,780, covers sustained-release formulations of mirabegron, which Astellas developed to mitigate the drug's undesirable "food effect."The United States District Court for the District of Delaware held a five-day bench trial focusing on issues of infringement and validity under 35 U.S.C. § 112. However, the district court, sua sponte, determined that claims 5, 20, and 25 of the '780 patent were invalid under 35 U.S.C. § 101, reasoning that the claims were directed to an ineligible natural law. This decision was made despite the fact that Sandoz had not raised a § 101 defense during the trial or in its post-trial briefing.The United States Court of Appeals for the Federal Circuit reviewed the case and found that the district court had abused its discretion by addressing a ground not raised by the parties, thereby disregarding the principle of party presentation. The Federal Circuit vacated the district court's judgment and remanded the case for adjudication of the issues properly raised by the parties, specifically infringement and validity under 35 U.S.C. § 112. The Federal Circuit also declined Astellas's request to reassign the case to a different judge, trusting that the district court could resolve the remaining issues impartially. View "ASTELLAS PHARMA, INC. v. SANDOZ INC. " on Justia Law

The plaintiff, a manufacturer of resinous flooring systems, sued a former employee, the defendant, for breaching a noncompete agreement, violating the Connecticut Uniform Trade Secrets Act (CUTSA), and breaching a common-law duty of confidentiality. The defendant, who had signed a noncompete agreement as a condition of continued employment, later established his own floor coating business and used the plaintiff’s proprietary information to develop competing products. The plaintiff alleged that the defendant also assisted competitors in developing their products.In a separate but related case, the trial court found the noncompete agreement unenforceable due to lack of consideration and ruled that the common-law duty of confidentiality claim was preempted by CUTSA. The court also determined that a payment made to the defendant after his resignation was severance pay, not compensation for reaffirming the noncompete agreement. Based on these findings, the trial court in the present case granted summary judgment for the defendant, applying collateral estoppel to preclude further consideration of the issues.The Connecticut Supreme Court reviewed the case and concluded that the trial court had incorrectly determined the noncompete agreement was unenforceable for lack of consideration. The Supreme Court reversed the trial court’s judgment on the breach of the noncompete agreement claim and remanded the case for further proceedings to determine whether the agreement was supported by adequate consideration. The court upheld the trial court’s findings that the severance payment was not consideration for reaffirming the noncompete agreement and that the common-law duty of confidentiality claim was preempted by CUTSA. These rulings were binding in the present case. The judgment was reversed in part and affirmed in part, with further proceedings required to determine the enforceability and potential breach of the noncompete agreement. View "Dur-A-Flex, Inc. v. Dy" on Justia Law

The plaintiff, a developer and manufacturer of resinous flooring systems, sued several individual and corporate defendants for misappropriation of trade secrets, among other claims. The key individual defendant, S, was a former employee who developed a product called Poly-Crete for the plaintiff. After resigning, S started his own business and developed similar products, allegedly using the plaintiff’s trade secrets. The plaintiff claimed that S and other defendants, including companies that tested and used S’s products, misappropriated its trade secrets.The trial court conducted a bench trial in three phases. In the first phase, the court found that the plaintiff’s formulas for Poly-Crete and other products were trade secrets but ruled that the noncompete agreement S signed was unenforceable due to lack of consideration. The court also found that the plaintiff’s common-law confidentiality claim was preempted by the Connecticut Uniform Trade Secrets Act (CUTSA).In the second phase, the court found that S and some defendants misappropriated the plaintiff’s trade secrets to create products like ProKrete and ProSpartic. However, it ruled that other defendants, including Indue, Krone, ECI, and Merrifield, did not misappropriate the trade secrets as they did not know or have reason to know about the misappropriation. The court also granted attorney’s fees to Krone and ECI, finding the plaintiff’s claims against them were made in bad faith.In the third phase, the court ordered the defendants who misappropriated the trade secrets to disgorge profits and enjoined them from using the trade secrets. The court also sanctioned the plaintiff for attempted spoliation of evidence by its president, F, who tried to remove incriminating photos from the company’s Facebook page during the trial.The Connecticut Supreme Court affirmed the trial court’s rulings on most issues but reversed the judgment regarding the enforceability of the noncompete agreement and the standard for determining misappropriation. The case was remanded for further proceedings on these issues. View "Dur-A-Flex, Inc. v. Dy" on Justia Law