Justia Intellectual Property Opinion Summaries

Two software development companies became involved in a dispute after a UK bank, Metro Bank PLC, hired one company, Arkeyo LLC, to create software for its coin-counting machines. Years later, as Arkeyo’s product became outdated, Metro Bank engaged Saggezza UK (a subsidiary of Saggezza, Inc.) to build replacement software. During development, Metro Bank provided Saggezza with an Arkeyo-operated touchscreen computer for reference. Arkeyo later alleged that Saggezza, Inc. infringed its copyrights and trade secrets, interfered with its contract and business relationship with Metro Bank, and converted Arkeyo’s property.The United States District Court for the Northern District of Illinois granted summary judgment for Saggezza, Inc. on all claims, ruling that Arkeyo did not show Saggezza, Inc. was responsible for the alleged infringement or tortious acts—these, if they occurred, were committed by Saggezza UK, which was not a defendant. The district court also denied Arkeyo’s motions for sanctions and for reconsideration based on purportedly new evidence, and it awarded attorney’s fees to Saggezza, Inc. under federal statutes.The United States Court of Appeals for the Seventh Circuit reviewed the case and affirmed the district court’s decisions. The appellate court held that Arkeyo’s copyright claims failed because there was no evidence of copying. The trade secret claims failed due to Arkeyo’s public disclosure of its software and the generic nature of the alleged secrets. The tortious interference claims were rejected because Saggezza’s competitive conduct was not “wrongful” under Illinois law, and the conversion claim failed since Arkeyo did not own or demand the property. The appellate court also affirmed the denial of sanctions, the denial of reconsideration, and the award of attorney’s fees. View "Arkeyo LLC v Saggezza, Inc." on Justia Law

Two companies manufacture and market water hoses. One company, after registering a trademark for the color chartreuse as applied to the body of its hoses, sued its competitor, claiming trademark infringement under the Lanham Act and related Iowa common law. The competitor responded by arguing that the chartreuse color was a functional feature, not eligible for trademark protection, and requested that the trademark registration be canceled and the claims dismissed.The United States District Court for the Northern District of Iowa held a bench trial and found in favor of the defendant. The court concluded that the chartreuse color served a functional purpose by making the hoses more visible and thus safer, which is a utilitarian advantage. The court also found that the color had not acquired the distinctiveness required for trademark protection, but determined that either ground was sufficient for cancellation. The district court canceled the trademark registration, dismissed all claims, and awarded the defendant more than three million dollars in attorneys’ fees, finding the case “exceptional” due to the plaintiff’s lack of candor before the USPTO, trial conduct, and continued misapplication of the functionality standard.The United States Court of Appeals for the Eighth Circuit reviewed the district court’s factual finding of functionality for clear error and its award of attorneys' fees for abuse of discretion. The appellate court affirmed the district court’s determination that the chartreuse color was functional and thus unregistrable as a trademark. It also upheld the attorneys’ fees award, finding no abuse of discretion in the lower court’s assessment of the plaintiff’s conduct and the exceptional nature of the case. View "Weems Industries, Inc. v. Teknor Apex Company" on Justia Law

The dispute involved a university and its licensee, who hold a patent describing a biodegradable polymer fiber containing a therapeutic agent, which can be used in medical implants such as drug-eluting stents. The patent claims compositions where the fiber is composed of two immiscible phases: a polymer portion and discrete regions containing the drug. The defendant, a medical device company, manufactured and sold stents with a drug-containing biodegradable coating, which the plaintiffs alleged infringed several claims of the patent.After the lawsuit was transferred to the United States District Court for the District of Delaware, the court construed key claim terms and the case proceeded to a jury trial. The jury found that the defendant infringed the asserted patent claims and did so willfully, rejected the defendant’s invalidity defense based on anticipation by a prior patent (the “Song” reference), and awarded damages. The district court later set aside the willfulness finding but otherwise upheld the verdict and entered judgment for the plaintiffs.On appeal, the United States Court of Appeals for the Federal Circuit reviewed the district court’s denial of the defendant’s motions for judgment as a matter of law de novo. The appellate court concluded that the Song patent anticipated all asserted claims, finding that it expressly disclosed every limitation at issue, including the specific structure of the fiber, drug-containing regions, and release characteristics. The court also determined that no reasonable jury could have found infringement, as the defendant’s stent coating did not meet the “fiber” limitation under the district court’s construction. Accordingly, the Federal Circuit reversed the judgment for the plaintiffs and did not reach the plaintiffs’ cross-appeal regarding willfulness. The court awarded costs to the defendant. View "BOARD OF REGENTS OF THE UNIVERSITY OF TEXAS v. BOSTON SCIENTIFIC CORP. " on Justia Law

A technology company developed a healthcare revenue management software platform and, in 2014, licensed a white-labeled version to a bank. The bank branded this software as its own and used it to provide services to its customers. The licensing agreement gave the bank access to confidential software and data, while prohibiting reverse engineering, copying, or creating derivative works. In 2018, the bank began developing its own software that performed similar functions. The technology company later noticed a decline in users of its platform and suspected the bank had breached the contract by reverse engineering and copying its software. The company then sought a preliminary injunction to stop the bank from using its new platform and from misusing the information gained through the contract.The United States District Court for the Western District of Missouri reviewed the request for a preliminary injunction. The district court found that the technology company failed to show that it would suffer irreparable harm absent injunctive relief, ruling that any potential financial losses could be compensated with money damages and that claims of reputational harm were too speculative. The court also determined that the contract’s clause permitting injunctive relief was not, by itself, sufficient to require an injunction.On appeal, the United States Court of Appeals for the Eighth Circuit affirmed the district court’s decision. The appellate court held that the district court did not clearly err in finding the alleged harms compensable with money damages or too speculative, nor did it abuse its discretion by giving limited weight to the contract’s injunctive relief provision. The court emphasized that failure to demonstrate likely irreparable harm is, by itself, a sufficient ground to deny a preliminary injunction. Accordingly, the denial of the preliminary injunction was affirmed. View "RMS v. Commerce Bank" on Justia Law

An American artist created a Styrofoam sculpture in Italy in the late 1980s and sold it to a production company owned by a well-known Italian adult film star and politician. About a year later, another artist, internationally recognized for his “appropriation” style, used the sculpture as a set for a series of photographs with the film star, which were subsequently incorporated into several pieces of art. These works were widely exhibited and publicized in Italy and internationally beginning around 1989. The sculptor claims he did not become aware of the alleged infringement until he saw a news article about the works in 2019. He obtained a U.S. copyright registration for the sculpture in 2020 and filed suit against the appropriation artist and his company in December 2021, later adding the artist’s LLC as a defendant.The United States District Court for the Southern District of New York considered cross-motions for summary judgment. It granted the defendants’ motion, holding that the copyright infringement claim was time-barred because the plaintiff, given his immersion in Italian culture and proximity to the events, should have discovered the alleged infringement well before 2019. The court further ruled that, because the copyright claim was untimely, the related Digital Millennium Copyright Act (DMCA) claim and a request for reconsideration of the damages period were moot.On appeal, the United States Court of Appeals for the Second Circuit reviewed the district court’s decision de novo. The Second Circuit affirmed the lower court’s judgment, holding that the copyright infringement claim was time-barred under the discovery rule, as a reasonably diligent copyright holder in the plaintiff’s position would have discovered the alleged infringement more than three years before filing suit. The appellate court also declined to consider the plaintiff’s argument regarding the independent accrual of the DMCA claim, as it was neither properly preserved nor adequately presented on appeal. View "Hayden v. Koons" on Justia Law

The dispute centers on the government’s use of TETRA® software, developed by 4DD Holdings, LLC. The Department of Defense and Department of Veterans Affairs sought to improve data interoperability for healthcare records and decided to purchase commercial software. After a competitive process, Systems Made Simple (SMS), the government’s contractor, selected TETRA. The government acquired licenses for specific numbers of TETRA’s components through an authorized reseller, Immix Technology, Inc., with explicit restrictions on copying. However, SMS exceeded license limits by making thousands of unauthorized copies during development and testing. 4DD discovered these excess copies and initiated negotiations, ultimately settling for payment for additional cores at the previously agreed license rate. The government later ended its use of TETRA.The United States Court of Federal Claims reviewed the case after 4DD filed suit for copyright infringement. During discovery, evidence destruction by the government led to sanctions. Following a bench trial, the court found the government had significantly exceeded its licenses and assessed damages using a hypothetical negotiation approach, considering factors like the existence of alternative software and the nature of the use, instead of defaulting to the rates in the licensing agreements. The court awarded $12,683,065.86 in damages, including compensatory and non-compensatory (statutory) damages.The United States Court of Appeals for the Federal Circuit examined whether damages should be calculated by reference to the license rates or through a hypothetical negotiation. The court held that neither statute nor precedent compels using the license agreement rates for damages; courts may use hypothetical negotiations when material differences exist between licensed and infringing uses. However, the trial court erred by considering unforeseeable future events (like TETRA’s cancellation) in its damages analysis and by awarding non-compensatory statutory damages against the government. The Federal Circuit affirmed in part, vacated in part, and remanded for further proceedings. View "4DD HOLDINGS, LLC v. US " on Justia Law

Senior engineers left their positions at a technology company to join a competitor, bringing with them thousands of confidential documents related to product development, research strategies, and technical know-how. Within days, the competitor was able to deliver complete designs for new product lines using this information. The original employer soon discovered the transfer of trade secrets and filed suit, alleging violations under the federal Defend Trade Secrets Act (DTSA) and initially, the California Uniform Trade Secrets Act (UTSA). Before trial, the case was narrowed to focus on five specific trade secrets, and the plaintiff ultimately dropped the state law claims, proceeding only under the DTSA.The United States District Court for the Northern District of California presided over a jury trial. The jury found that the defendant had misappropriated three trade secrets, awarding $20 million in compensatory damages and $20 million in punitive damages. The court also granted a permanent injunction against the defendant’s use of the trade secrets and awarded over $17 million in attorney fees. However, the court had instructed the jury that the defendant bore the burden of proving that the trade secrets were readily ascertainable by proper means, an element relevant under the California UTSA but not under the DTSA.The United States Court of Appeals for the Ninth Circuit reviewed the case. It held that the district court erred by instructing the jury that the defendant bore the burden of disproving that the trade secrets were readily ascertainable, a burden that should have remained with the plaintiff under the DTSA. The appellate court found that this error was neither invited by the defendant nor harmless, given conflicting evidence and the potential impact on the verdict and damages calculation. The Ninth Circuit reversed the district court’s judgment and remanded for a new trial on liability and damages for the trade secrets the jury found had been misappropriated. View "COMET TECHNOLOGIES USA, INC. V. XP POWER, LLC" on Justia Law

Several senior engineers departed from a semiconductor component manufacturer in 2018, joining a competing firm and bringing with them thousands of confidential documents detailing product designs, research strategies, and proprietary technologies. Within days, the new employer had complete product designs and development plans based on the stolen information. The original employer discovered the theft and initiated a lawsuit for trade secret misappropriation under the federal Defend Trade Secrets Act (DTSA), eventually narrowing the claims to five specific alleged trade secrets and dismissing related state law claims. The case focused on whether the stolen information qualified as trade secrets and the extent of damages.The United States District Court for the Northern District of California presided over a jury trial. The jury found that the defendant had misappropriated several of the alleged trade secrets and awarded $40 million in compensatory and punitive damages. The court granted a permanent injunction barring further use or disclosure of the trade secrets and later approved an attorney fee award exceeding $17 million. The defendant appealed, challenging both the trial conduct and the judgment, while the plaintiff cross-appealed regarding damages for one trade secret.The United States Court of Appeals for the Ninth Circuit reviewed the case and held that the district court erred in instructing the jury that the defendant bore the burden of disproving that the trade secrets were not readily ascertainable by proper means. The DTSA requires the plaintiff to prove this element. The appellate court found that the error was not harmless given conflicting evidence and the impact on damages. Accordingly, the Ninth Circuit reversed the district court’s judgment, including the damages, injunction, and attorney fees, and remanded for a new trial on liability and damages for the relevant trade secrets. View "COMET TECHNOLOGIES USA, INC. V. XP POWER, LLC" on Justia Law

This case concerns a dispute over the alleged infringement of a patent related to an insulated overhead door. Cold Chain, LLC owns U.S. Patent No. 9,151,084, and Ridge Corporation became its exclusive licensee in February 2023. Ridge alleged that Kirk NationaLease Co., Truck & Trailer Parts Solutions, Inc., and Altum LLC infringed claims of the patent by manufacturing and selling a roll-up door. Ridge also brought claims for patent inducement, contributory infringement, tortious interference with business relationships, and false patent marking. The accused product is constructed as a “sandwich” panel with two thermoplastic membranes surrounding a foam layer, which is modified to traverse curved tracks.The United States District Court for the Southern District of Ohio initially granted Ridge’s motion for a preliminary injunction, enjoining the defendants from certain activities related to the accused door. The United States Court of Appeals for the Federal Circuit vacated that injunction, finding Ridge lacked standing as it was not an exclusive licensee with all substantial rights. Ridge then amended its complaint, adding Cold Chain as a plaintiff, and the district court again granted a preliminary injunction, concluding the plaintiffs had a strong likelihood of success on the merits.Upon review, the United States Court of Appeals for the Federal Circuit reversed the district court’s order. The court held that the defendants raised substantial questions regarding whether the accused door met three distinct claim limitations: flexibility along the entire length, the foam forming the second outermost surface, and whether the door qualifies as an “insulated overhead door.” The court also found the plaintiffs failed to demonstrate irreparable harm. The preliminary injunction was therefore reversed and the case remanded for further proceedings. View "RIDGE CORP. v. KIRK NATIONALEASE CO. " on Justia Law

A North Carolina software company initiated a lawsuit in the United States District Court for the Western District of North Carolina against its former business partner, a Dutch entity, after their business relationship dissolved. The plaintiff alleged copyright and trademark infringement, misappropriation of trade secrets, and various state law violations. Shortly after the complaint, the plaintiff obtained a preliminary injunction limiting the defendant’s business activities. Meanwhile, the defendant commenced related litigation in the Netherlands. During those Dutch proceedings, the defendant’s American attorney, Pressly Millen, submitted an affidavit that the plaintiff claimed misrepresented the scope and timing of the U.S. litigation.The Dutch court initially denied the plaintiff’s request to stay the Dutch proceedings, partly relying on representations from the defendant’s counsel. The plaintiff returned to the North Carolina court, seeking an order requiring the defendant to correct these alleged misrepresentations in the Dutch court. The district court ordered the defendant to submit both its order and a corrective statement to the Dutch court. The defendant submitted the order but did not file the separate corrective statement. Later, the Dutch court stayed its proceedings. The plaintiff then moved for contempt sanctions in the North Carolina court against the defendant and its attorneys for failing to comply fully with the correction order. Following a show cause hearing, the district court held the defendant and Millen in civil contempt, sanctioning Millen by suspending his ability to practice in the district, though not holding him jointly liable for monetary sanctions.On appeal, the United States Court of Appeals for the Fourth Circuit found that it had jurisdiction to review the contempt order against Millen, a nonparty. The appellate court held that the district court abused its discretion by imposing civil contempt sanctions on Millen without clear and convincing evidence that the plaintiff was harmed by Millen’s failure to submit the separate statement. The court vacated the civil contempt adjudication and sanction against Millen. View "Dmarcian, Inc. v. Millen" on Justia Law