Justia Intellectual Property Opinion Summaries

CLEAResult Consulting, Inc. engaged NEXT Payment Solutions, Inc. to create a customized appointment scheduling software called the FAST Tool. After several years of use, CLEAResult acquired another company with its own scheduling platform, the DSMTracker, and decided to transition away from NEXT’s software. CLEAResult analyzed the FAST Tool’s functionality to enhance the DSMTracker, but was never given access to the FAST Tool’s underlying source code or algorithms. NEXT alleged that CLEAResult had secretly misappropriated trade secrets and brought claims for misappropriation under federal law and unjust enrichment under Illinois law.Reviewing the case, the United States District Court for the Northern District of Illinois first granted CLEAResult partial summary judgment on the trade secrets claim, finding NEXT had failed to sufficiently identify its alleged secrets. The court narrowed the claim and required NEXT to provide more detail, but NEXT submitted only vague descriptions of software modules. The court then granted summary judgment in full to CLEAResult, concluding NEXT’s descriptions did not specify protectable trade secrets. The court also granted CLEAResult’s motion in limine, precluding NEXT from pursuing an unjust enrichment claim based on a theory of misusing “other proprietary information,” determining this was a new theory not previously pled. NEXT then voluntarily dismissed its remaining claims, and final judgment was entered for CLEAResult.The United States Court of Appeals for the Seventh Circuit affirmed the district court’s rulings. It held that NEXT failed to identify trade secrets with sufficient specificity to survive summary judgment under the Defend Trade Secrets Act. The Seventh Circuit also found the district court did not abuse its discretion in excluding NEXT’s late-developed unjust enrichment theory, as this constituted an improper new claim. The final judgment in favor of CLEAResult was affirmed. View "NEXT Payment Solutions Inc. v CLEAResult Consulting, Inc." on Justia Law

Two individuals, Vetter and Smith, co-wrote the song “Double Shot (Of My Baby’s Love)” in 1962 and assigned all copyright interests to Windsong Music Publishers in 1963, including a contingent assignment of renewal rights. After Smith died in 1972, his heirs and Vetter renewed the copyright when the original term ended in 1994. Windsong’s ownership of renewal rights depended on the authors’ survival; thus, Windsong received Vetter’s renewal rights because he survived, while Smith’s heirs received his share. Vetter Communications Corporation later purchased Smith’s heirs’ renewal rights. In 2019, Vetter terminated his earlier assignment under 17 U.S.C. § 304(c), aiming to recapture his rights. The publisher’s ownership interests were subsequently sold to Resnik Music Group. When licensing negotiations arose for international use, conflicting ownership claims led Vetter and his corporation to seek a declaratory judgment establishing their sole copyright ownership worldwide.The United States District Court for the Middle District of Louisiana denied Resnik’s motion to dismiss and granted summary judgment for the plaintiffs. The court declared that Vetter was the sole owner of the recaptured copyright interest globally, and Vetter Communications Corporation was the sole owner of the renewal copyright interest globally, establishing their exclusive ownership.On appeal, the United States Court of Appeals for the Fifth Circuit reviewed the district court’s summary judgment de novo. The Fifth Circuit affirmed the district court’s judgment, holding that termination of copyright assignments under 17 U.S.C. § 304(c) and the renewal provisions of the Copyright Act of 1909 confer worldwide ownership rights to the terminating author or their heirs, not limited to domestic rights. The court found that statutory text, context, and purpose support this interpretation, and that the judgment does not conflict with international treaty obligations or relevant legal principles. View "Vetter v. Resnik" on Justia Law

Several senior financial advisors resigned from a national investment advisory firm’s Des Moines branch to join a competitor that was opening a new local office. After their departure, nearly all remaining advisors at the branch also resigned en masse and joined the competitor, which offered substantial incentives. The resignations occurred despite restrictive covenants in the former advisors’ employment contracts, which limited their ability to solicit clients, disclose confidential information, and recruit other employees. The competitor and the departing advisors soon began servicing many of their former clients, resulting in a substantial loss of business for their previous employer.Following these events, the original firm filed suit in the United States District Court for the Southern District of Iowa, alleging breach of contract, tortious interference, and theft of trade secrets. The district court initially denied a temporary restraining order but later granted a broad preliminary injunction. This injunction prohibited the former advisors from servicing or soliciting covered clients, using confidential information, or recruiting employees, and it barred the competitor from using confidential information or interfering with employment agreements. The defendants sought a stay but were denied by both the district court and the appellate court.On appeal, the United States Court of Appeals for the Eighth Circuit reviewed the preliminary injunction. The appellate court determined that the record did not show a likelihood of irreparable harm that could not be compensated by money damages, as required for preliminary injunctive relief. The court found that the alleged financial harms were calculable and that the claimed destruction of the Des Moines branch had already occurred, rendering injunctive relief ineffective for preventing future harm. The Eighth Circuit therefore vacated the preliminary injunction and remanded the case for further proceedings. View "Choreo, LLC v. Lors" on Justia Law

Crocs, Inc. owns two U.S. trademarks covering features of its Classic Clog shoes. In June 2021, Crocs filed a complaint with the United States International Trade Commission (ITC), alleging that several respondents violated Section 337 of the Tariff Act of 1930 by importing or selling footwear that infringed or diluted Crocs’s trademarks. Crocs sought a general exclusion order (GEO) or, in the alternative, a limited exclusion order (LEO). During the investigation, some respondents were found in default for failing to participate, while others actively defended against the claims.An Administrative Law Judge conducted an evidentiary hearing for the three active respondents and, in January 2023, issued an Initial Determination finding no violation of Section 337. The judge concluded that Crocs had not shown infringement or dilution of its trademarks and had waived infringement contentions against the defaulting respondents. The Commission reviewed parts of this determination and, in September 2023, issued a final decision: it found no violation by the active respondents and determined not to apply the waiver to the defaulting respondents. For the defaulting respondents, the ITC presumed the facts in Crocs’s complaint to be true, as required by statute, and issued an LEO against them, finding no public interest factors weighed against exclusion.On appeal, Crocs challenged both the no violation finding as to active respondents and the issuance of only an LEO rather than a GEO for the defaulting respondents. The United States Court of Appeals for the Federal Circuit held that Crocs’s appeal regarding the active respondents was untimely and dismissed it. Regarding the defaulting respondents, the court affirmed the Commission’s decision to issue a limited exclusion order, finding no abuse of discretion or error in law. Thus, the appeal was dismissed in part and affirmed in part. View "CROCS, INC. v. ITC " on Justia Law

Two competing software companies specializing in business process management platforms were embroiled in a dispute after one company's employee, acting as a covert consultant, obtained confidential information about the other’s products. The employee, who had access through a third-party government contractor, provided the competitor with detailed tutorials, internal documentation, and live presentations designed to help the competitor improve its own offerings and target the rival’s weaknesses in sales efforts. The information was disseminated within the competitor’s organization and used both to inform product development and to shape competitive strategy. The aggrieved company discovered the espionage years later when the consultant’s handler joined its staff and disclosed the conduct. The company then pursued claims for trade secret misappropriation under the Virginia Uniform Trade Secrets Act, among other causes.The Circuit Court for Fairfax County oversaw a lengthy trial and issued several key evidentiary and instructional rulings: it excluded evidence about the number of users who had access to the alleged trade secrets, limited the competitor’s damages defense based on a discovery response, prohibited the competitor from authenticating certain software versions except on a specified laptop, and issued a damages instruction that shifted the burden of proof to the competitor. The jury found for the plaintiff and awarded substantial damages. The Court of Appeals of Virginia affirmed the jury’s finding of misappropriation but reversed the judgment, holding that the circuit court committed multiple errors in its evidentiary rulings and jury instructions, and remanded for a new trial on the trade secret claims.On further appeal, the Supreme Court of Virginia affirmed the Court of Appeals’ judgment. It held that the circuit court erred by shifting the burden of proof for damages to the defendant, by limiting the defendant’s damages evidence, by precluding authentication of software exhibits, and by instructing the jury that the number of people with access to the trade secrets was irrelevant. The Supreme Court ordered a remand for further proceedings consistent with its opinion. View "Appian Corporation v. Pegasystems" on Justia Law

Athos Overseas Limited owns copyrights to numerous classic Mexican and Latin American films. The company discovered that its copyrighted films were posted on YouTube without authorization. Athos sent multiple takedown notices to YouTube, which removed the specific videos identified in those notices. However, Athos argued that YouTube’s technology—particularly its video-hashing and content management tools—gave it actual or “red flag” knowledge of additional infringing material beyond what was specifically identified, and thus YouTube should have removed all such matches automatically.The United States District Court for the Southern District of Florida reviewed cross-motions for summary judgment. The district court adopted the magistrate judge’s recommendation, denied Athos’s motion for partial summary judgment, and granted summary judgment in favor of YouTube. The court found that YouTube qualified for safe-harbor protection under 17 U.S.C. § 512(c) of the Digital Millennium Copyright Act (DMCA), as it expeditiously removed infringing material identified by valid takedown notices and did not have actual or red flag knowledge of other specific infringements.On appeal, the United States Court of Appeals for the Eleventh Circuit affirmed the district court’s decision. The Eleventh Circuit held that YouTube’s copyright management technologies do not, in themselves, give YouTube actual or red flag knowledge of specific infringing material unless a valid DMCA notice is received. The court also found that YouTube’s moderation and curation features did not constitute the right and ability to control infringing activity for purposes of the DMCA safe harbor. Therefore, YouTube was entitled to safe-harbor protection under § 512(c), and summary judgment in its favor was proper. View "Athos Overseas Limited Corp. v. YouTube, Inc." on Justia Law

Kesters Merchandising Display International, Inc. and SurfaceQuest, Inc. are competing manufacturers in the architectural materials industry. Kesters produces MicroLite, a lightweight, seamless material. Around 2014, the parties collaborated to market samples of MicroLite wrapped in SurfaceQuest film, with Kesters supplying photographs and product guides. Subsequently, SurfaceQuest began independently selling and marketing its own lightweight beam wrapped in its film, utilizing photographs of MicroLite in promotional materials. Kesters alleged that SurfaceQuest misrepresented MicroLite as its own in various advertisements and communications with customers.The United States District Court for the District of Kansas presided over the initial lawsuit. Kesters claimed false advertising under the Lanham Act, arguing that SurfaceQuest’s use of MicroLite images and representations damaged its business. Both parties moved for summary judgment on the Lanham Act claim. The district court granted summary judgment to SurfaceQuest, finding that Kesters had neither established a presumption of injury nor presented evidence of actual injury resulting from the alleged false advertising.On appeal, the United States Court of Appeals for the Tenth Circuit reviewed the case de novo under the summary judgment standard. The appellate court determined that injury could not be presumed because Kesters failed to show that only two significant competitors existed in the relevant market or to provide evidence of cross-elasticity of demand. Furthermore, Kesters did not present evidence of actual injury, such as a causal connection between SurfaceQuest’s advertising and lost business opportunities. As a result, the Tenth Circuit affirmed the district court’s grant of summary judgment to SurfaceQuest and the denial of Kesters’ motion for summary judgment, holding that Kesters did not provide evidence supporting the required element of injury for its Lanham Act claim. View "Kesters Merchandising Display International v. SurfaceQuest" on Justia Law

Two individuals who are heirs to the author of a 1983 magazine article about the United States Navy Fighter Weapons School, known as “Top Gun,” brought suit against a film studio. They alleged that a 2022 film, which is a sequel to an earlier movie inspired by the article, unlawfully copied their copyrighted work and breached a contractual obligation to credit the original author.After the 1983 article was published, the author assigned all rights to the studio in exchange for compensation and a promise that he would be credited in any movie “substantially based upon or adapted from” the article. The studio produced an initial film in 1986, which acknowledged the article. Decades later, the heirs terminated the copyright grant under 17 U.S.C. § 203(a)(3)—a statutory right for authors’ heirs. The studio released the sequel without crediting or compensating the heirs. The heirs filed claims for copyright infringement and breach of contract in the United States District Court for the Central District of California. The district court granted summary judgment for the studio, finding that the new film did not share substantial amounts of the article’s original expression and excluded the plaintiffs’ expert’s opinion for failing to filter out unprotectable elements.On appeal, the United States Court of Appeals for the Ninth Circuit affirmed the district court’s decision. The appellate court held that the sequel did not share substantial similarity in protectable expression with the article, as required for copyright infringement. It also found no original and protectable selection and arrangement of elements, and concluded that the district court properly excluded the plaintiffs’ expert and admitted the studio’s expert. The court further held that the studio did not breach the 1983 agreement, because the new film was not produced under the rights conferred by that agreement. The judgment for the studio was affirmed. View "YONAY V. PARAMOUNT PICTURES CORPORATION" on Justia Law

The Massachusetts Institute of Technology owns three patents related to fuel management systems for spark ignition engines, which are exclusively licensed to Ethanol Boosting Systems, LLC. These patents describe a system that uses both direct and port fuel injection to mitigate engine knock and optimize performance. The system operates with varying injection mechanisms depending on engine torque or manifold pressure, and includes a three-way catalyst to reduce emissions. The patents contain claims focusing on the interplay of injection types with engine operating ranges and the use of anti-knock agents.Previously, Ford Motor Company petitioned the Patent Trial and Appeal Board (PTAB) for inter partes review (IPR) of all three patents. The PTAB initially denied institution, largely due to a claim construction that restricted the definition of “fuel” in a manner consistent with a district court’s prior interpretation, which required the directly injected fuel to differ from the port-injected fuel and to contain an anti-knock agent other than gasoline. After the Federal Circuit, in Ethanol Boosting Sys., LLC v. Ford Motor Co., vacated the district court’s construction regarding the “different fuel” requirement (but did not address the anti-gasoline requirement), the PTAB granted Ford’s rehearing request and instituted the IPRs.On appeal from the PTAB, the United States Court of Appeals for the Federal Circuit reviewed the Board’s final written decisions, which found the relevant claims of all three patents unpatentable as obvious. The Federal Circuit rejected EBS’s arguments that the Board lacked authority to delay its rehearing decision and that the Board was bound by the non-appealed portion of the district court’s claim construction. The court affirmed the Board’s adoption of the plain and ordinary meaning of the disputed terms and found substantial evidence supporting the Board’s factual findings regarding obviousness. The holding is that the PTAB’s decisions finding all challenged claims unpatentable as obvious are affirmed. View "ETHANOL BOOSTING SYSTEMS, LLC v. FORD MOTOR COMPANY " on Justia Law

A South Korean entertainment company that owns trademarks for the popular “Baby Shark” song and related products brought a lawsuit in the United States District Court for the Southern District of New York against dozens of China-based businesses. The company alleged these businesses manufactured or sold counterfeit Baby Shark merchandise, violating trademark, copyright, and unfair competition laws. Seeking to stop the alleged counterfeiting, the company obtained temporary and preliminary injunctions and moved to serve the defendants by email, arguing that this method was appropriate under Federal Rule of Civil Procedure 4(f)(3).After the plaintiff served process by email, most defendants did not respond, leading to default judgments against many of them. However, two defendants appeared and challenged the court’s jurisdiction, arguing that service by email violated the Hague Service Convention, to which both the United States and China are parties. The district court agreed, finding that the Convention did not permit service by email on parties in China, and dismissed the claims against these defendants without prejudice for improper service. The plaintiff appealed to the United States Court of Appeals for the Second Circuit.The United States Court of Appeals for the Second Circuit affirmed the district court’s decision. The appellate court held that the Hague Service Convention does not allow email service on defendants located in China, as China has expressly objected to alternative methods such as those in Article 10 of the Convention. The court further held that neither Federal Rule of Civil Procedure 4(f)(2) nor any purported emergency exception permitted email service in these circumstances. The court also upheld the denial of a default judgment, finding no abuse of discretion. Accordingly, the dismissal of the claims against the two China-based defendants for lack of proper service was affirmed. View "Smart Study Co., LTD v. Shenzhenshixindajixieyouxiangongsi" on Justia Law