Justia Intellectual Property Opinion Summaries

A dispute arose when a company alleged that its proprietary process for manufacturing polycarbonate, a valuable industrial material, was misappropriated by a group of former employees and several consulting and engineering firms. The process involved multiple stages and technological innovations developed over decades, and had been licensed to partners around the world. After one former employee, who had extensive knowledge of the process, began consulting internationally and sharing information—including plant designs marked confidential—questions arose about whether these actions led to the improper use of trade secrets in the development and marketing of similar technology to other manufacturers.The United States District Court for the Southern District of Texas presided over a jury trial in which the jury found that four out of ten asserted trade secrets were misappropriated by the defendants, including the consulting companies and engineering firm. The jury awarded substantial damages to the plaintiff, including reasonable royalties and unjust enrichment amounts. However, the district court later granted the defendants’ motions for judgment as a matter of law, vacating the damages award on the grounds that the plaintiff had failed to properly apportion damages among the trade secrets found to be misappropriated, instead presenting an “all-or-nothing” damages model. The district court also granted summary judgment against the plaintiff's alternative claim for misappropriation of confidential information, finding it preempted by state trade secrets law, denied a new trial on damages, and entered a permanent injunction against the defendants.On appeal, the United States Court of Appeals for the Fifth Circuit affirmed the district court's rulings in all respects. The Fifth Circuit held that, where multiple trade secrets are alleged and only some are found misappropriated, the plaintiff must provide a reasonable basis for the jury to apportion damages among the proven secrets. The court also affirmed the preemption of alternative confidential information claims and upheld the permanent injunction. View "Trinseo v. Harper" 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

Computer Sciences Corporation (CSC), an American technology services provider, licensed two insurance software platforms, Vantage and CyberLife, to Transamerica, an insurance company. Tata Consultancy Services (TCS), a technology consulting firm, was later engaged by Transamerica as a third-party consultant to maintain CSC’s platforms. CSC and Transamerica signed a Third-Party Addendum allowing TCS access to CSC’s software “solely for the benefit” of Transamerica. During this period, TCS sought to develop its own insurance platform, BaNCS, and won a $2.6 billion contract to transition Transamerica’s business to BaNCS. Evidence arose that TCS used CSC’s confidential information, including source code and technical manuals, for its BaNCS development, prompting CSC to allege trade secret misappropriation when a CSC employee discovered TCS sharing proprietary materials internally.CSC sued TCS in the United States District Court for the Northern District of Texas under the Defend Trade Secrets Act (DTSA). After an eight-day trial with an advisory jury, the jury found in favor of CSC, recommending substantial damages. The district court found TCS liable, awarding CSC $56 million in compensatory damages (based on unjust enrichment), $112 million in exemplary damages, and imposing a permanent injunction barring TCS’s use of CSC’s trade secrets and BaNCS versions developed with misappropriated material.On appeal, the United States Court of Appeals for the Fifth Circuit affirmed the district court’s findings that TCS’s use was unauthorized under the relevant contracts and that TCS had the requisite mens rea, including willful and malicious misappropriation. The Fifth Circuit also affirmed the damages awards and the exemplary damages ratio. However, the court vacated the injunction in part, remanding for the district court to revise it: the injunction’s prohibition on TCS’s future use of BaNCS material developed post-misappropriation was found duplicative of the damages, and the definition of parties bound by the injunction was ordered to be clarified in line with Federal Rule of Civil Procedure 65(d)(2). View "Computer Sciences v. Tata Consultancy" on Justia Law

A trading company and a base oil manufacturer entered into a sales agreement in 2016, under which the manufacturer would serve as the exclusive North American sales representative for a high-quality base oil product distributed by the trading company. The agreement included noncompete provisions and was set to expire at the end of 2021. In late 2020, suspicions arose between the parties regarding potential breaches of the agreement, leading to a series of letters in which the trading company accused the manufacturer of selling a competing product and threatened termination if the alleged breach was not cured. The manufacturer responded by denying any breach and, after further correspondence, declared the agreement terminated. The trading company agreed that the agreement was terminated, and both parties ceased their business relationship.The trading company then filed suit in the United States District Court for the Southern District of Texas, alleging antitrust violations, breach of contract, business disparagement, and misappropriation of trade secrets. The manufacturer counterclaimed for breach of contract and tortious interference. After a bench trial, the district court found in favor of the manufacturer on the breach of contract and trade secret claims, awarding over $1.3 million in damages. However, the court determined that the agreement was mutually terminated, not due to anticipatory repudiation by the trading company, and denied the manufacturer’s request for attorneys’ fees and prevailing party costs.On appeal, the United States Court of Appeals for the Fifth Circuit affirmed the district court’s finding that the trading company did not commit anticipatory repudiation and that the agreement was mutually terminated. The Fifth Circuit also affirmed the denial of prevailing party costs under Rule 54(d) of the Federal Rules of Civil Procedure. However, the appellate court vacated the denial of attorneys’ fees under the agreement’s fee-shifting provision and remanded for further proceedings on that issue. View "Penthol v. Vertex Energy" on Justia Law

In 1991, three singers—Di Reed, Tonya Harris, and Joi Marshall—formed the vocal group Jade, which achieved significant success in the early 1990s. The group disbanded in 1995, and the members pursued individual careers. In 2018, the three agreed to a reunion tour and jointly applied for the "JADE" service mark, which was approved in 2019. However, the reunion tour did not materialize, and in 2021, Marshall and Harris performed with another singer, Myracle Holloway, under the JADE mark, leading Reed to file a lawsuit.Reed sued Marshall, Harris, and Holloway in the Southern District of Texas, alleging Lanham Act violations, including trademark infringement, dilution, and unfair competition, as well as Texas state law claims. The district court granted summary judgment for the defendants, concluding that Reed could not allege Lanham Act claims against her co-owners of the mark or Holloway, who performed with their permission.The United States Court of Appeals for the Fifth Circuit reviewed the case. The court held that the Lanham Act does not authorize claims between co-owners of a trademark. It affirmed the district court's summary judgment, stating that co-owners of a mark cannot sue each other for infringement or dilution under the Lanham Act. The court also found that Reed's unfair competition claims could not survive summary judgment and that there was no supplemental jurisdiction over the Texas law claims. The court emphasized that co-owners have the right to use the mark as they please, and a valid licensee of one co-owner cannot be liable to another co-owner for infringement. View "Reed v. Marshall" on Justia Law

In 2018, DeWolff, Boberg & Associates, Inc. (DB&A), a management consulting firm, hired Justin Pethick as a regional vice president of sales. In 2020, Pethick accepted a job offer from The Randall Powers Company (the Powers Co.), a competitor. After Pethick joined the Powers Co., some prospective DB&A clients hired the Powers Co. DB&A alleged that Pethick stole its trade secrets and used them to poach clients.The United States District Court for the Northern District of Texas excluded DB&A’s damages expert under Daubert v. Merrell Dow Pharmaceuticals, Inc., and granted summary judgment to the defendants, citing DB&A’s lack of evidence of damages. DB&A appealed, contesting the exclusion of its expert and the summary judgment on its misappropriation of trade secrets claim.The United States Court of Appeals for the Fifth Circuit reviewed the case. The court noted that to prevail on a misappropriation of trade secrets claim under Texas law, a plaintiff must show that a trade secret existed, it was acquired through a breach of a confidential relationship or discovered by improper means, and the defendant used the trade secret without authorization. The court found that DB&A failed to identify specific trade secrets within its databases and did not provide evidence that Pethick or the Powers Co. used or disclosed any trade secrets. Consequently, the court affirmed the summary judgment dismissal of DB&A’s misappropriation claim on these alternative grounds. View "DeWolff, Boberg & Associates, Inc. v. Pethick" on Justia Law

Pie Development, L.L.C. was formed to develop an application to streamline the process of purchasing workers compensation insurance. The company alleged that Dax Craig, a consultant, stole the idea and shared it with John Swigart. Craig and Swigart then used the idea to create Pie Insurance Holdings, Inc. and other affiliated entities, generating significant profits. Pie Development sued Craig, Swigart, Pie Insurance Holdings, and Pie Insurance Services, alleging misappropriation of trade secrets under the Mississippi Uniform Trade Secrets Act (MUTSA) and the federal Defend Trade Secrets Act (DTSA), among other claims.The United States District Court for the Southern District of Mississippi dismissed the complaint for failing to provide sufficient detail on each claim, but allowed Pie Development to amend its complaint within thirty days. Pie Development chose not to amend and instead appealed. The United States Court of Appeals for the Fifth Circuit affirmed the district court's decision, noting that Pie Development did not sufficiently plead that it took reasonable measures to protect its business plan's secrecy.While the appeal was pending, Pie Development filed a new lawsuit against additional defendants, including Pie Carrier Holdings, Gallatin Point Capital, Sirius Point Ltd., and Pie Casualty Insurance Company, and later added the original defendants. The district court dismissed the new claims, citing res judicata, as the claims were identical to those in the first lawsuit. Pie Development appealed this decision.The United States Court of Appeals for the Fifth Circuit reviewed the case and affirmed the district court's dismissal. The court held that res judicata applied because the prior action was concluded by a final judgment on the merits when Pie Development chose to appeal rather than amend its complaint. The court also found that Pie Development failed to state a claim against Gallatin and Sirius, as the complaint did not plausibly allege that they knew or should have known about the misappropriation of trade secrets. View "Pie Development v. Pie Carr Holdings" on Justia Law

Plaintiffs, BWP Media and National Photo Group, filed suit against T&S, an internet service provider, for direct and secondary infringement. Plaintiffs alleged that T&S hosted an internet forum on which third-party users posted images that infringed copyrights owned by plaintiffs. The district court granted summary judgment for T&S. The court adopted the volitional-conduct requirement in direct-copyright infringement cases, and found that BWP did not contend that T&S did, in fact, engage in such conduct. In this case, the court explained that T&S hosts the forum on which infringing content was posted, but its connection to the infringement ends there. Rather, the users posted the infringing content. Accordingly, the court affirmed the judgment. View "BWP Media USA, Inc. v. T & S Software Associates, Inc." on Justia Law

Streamline Production filed a trademark infringement suit against Streamline Manufacturing, seeking damages under the Lanham Act, 15 U.S.C. 1051 et seq., and Texas common law. The parties stipulated to an injunction and a jury returned a verdict finding that Streamline Manufacturing infringed on Streamline Production's valid trademark in its name and awarded damages for lost royalties, unjust enrichment, and exemplary damages. The district court denied Streamline Manufacturing's motion for judgment as a matter of law (JMOL), as well as its renewed JMOL, or in the alternative, for a new trial. The court concluded that there was insufficient evidence to support the royalty award where, given the limited nature of the expert testimony on royalty damages and the other evidence presented at trial on the nature of Streamline Manufacturing's infringement and customers, the royalty award does not bear a rational relationship to the infringing use; the unjust enrichment award was not supported by sufficient evidence; and, because the court vacated the royalty and unjust enrichment awards for insufficient evidence, the court also vacated the exemplary damages award. The court otherwise affirmed the judgment. View "Streamline Production Systems, Inc. v. Streamline Manufacturing, Inc." on Justia Law

Plaintiff owned AIA-LOGO! Promotions, LLC and defendant owned Insignia Marketing, Inc. Plaintiff filed suit against defendant, claiming breach of a partnership agreement, and defendant counterclaimed for breach of the same partnership agreement. Insignia then initiated a separate suit against plaintiff and Logo Promotions for trademark infringement, copyright infringement, cyber piracy, false advertising, and civil conspiracy. The jury found that plaintiff, but not defendant, had breached the partnership agreement, and awarded $60,000 in damages; found, however, that neither plaintiff nor Logo Promotions had infringed Insignia's trademark; found that Insignia had obtained registration of the "Communicat-R" trademark through fraud, that the mark was not in use on the day it was registered, and that Insignia had abandoned the mark after registration, all supporting cancellation of the registration; and found plaintiff and Logo Promotions liable for false advertising, but not cyber piracy or civil conspiracy. The trial court subsequently denied plaintiff attorneys' fees and reaffirmed its finding of waiver and, in the alternative, that the case was not "exceptional" enough to warrant such an award under the Lanham Act, 15 U.S.C. 1051 et seq. Defendant moved for a partial new trial and plaintiff moved for a renewed judgment as a matter of law, both of which the trial court denied. The court affirmed the denial of defendant's motion for a new trial to the extent that the motion was based on errors in the trial and jury instructions; affirmed the denial of defendant's motion for a new trial to the extent that the motion challenged the jury’s verdict as against the great weight of the evidence; affirmed the denial of plaintiff's renewed motion for judgment as a matter of law; affirmed the trial court's equal division of the interpleaded funds; and affirmed the denial of attorneys' fees. View "Vetter v. McAtee" on Justia Law