Justia Intellectual Property Opinion Summaries

A company specializing in hybrid electric aircraft technology filed suit in Washington state court against a major aerospace manufacturer and its investment affiliate, alleging misappropriation of trade secrets, breach of contract, and tortious interference, among other state law claims. The plaintiff asserted that the defendant improperly used its confidential information, including by incorporating aspects of the plaintiff’s technology into two patents obtained by the defendant. The plaintiff’s claims involved several theories and more than 30 alleged trade secrets.The aerospace manufacturer responded by counterclaiming for a declaratory judgment that its employees were the sole inventors of one of the patents in question. The case was removed to the United States District Court for the Western District of Washington based on this federal patent law counterclaim, and a second inventorship counterclaim was later added regarding another patent. The district court granted summary judgment in favor of the defendant on both patent inventorship counterclaims. The remainder of the plaintiff’s claims proceeded to a jury, which returned a verdict awarding the plaintiff over $92 million for trade secret misappropriation and tortious interference. However, the district court granted the defendant’s post-trial motion for judgment as a matter of law and conditionally granted a new trial, vacating the jury award.On appeal, the United States Court of Appeals for the Ninth Circuit reversed the district court’s post-trial rulings and remanded the case with instructions for reassignment to a different district judge. In a subsequent petition for rehearing, the defendant argued for the first time that appellate jurisdiction belonged exclusively to the Federal Circuit because the counterclaims were compulsory and arose under patent law. The Ninth Circuit held that the defendant’s counterclaims, though arising under federal patent law, were permissive—not compulsory—because they did not share the same operative facts as the plaintiff’s state law claims; thus, Ninth Circuit jurisdiction was proper. The court also held that the district court appropriately exercised supplemental jurisdiction over the state law claims, as they shared a common nucleus of operative fact with the federal counterclaims. The petition for rehearing was denied. View "ZUNUM AERO, INC. V. THE BOEING COMPANY" on Justia Law

A company operating a gas station in Washington entered into a series of agreements with a petroleum refiner and a logistics company. The agreements allowed the company to rebrand its station and market motor fuel under the refiner’s trademarks, even though the refiner did not supply the actual fuel. Instead, the logistics company served as an intermediary, and fuel was sourced from a third party. Later, the refiner and logistics company claimed the agreements were terminated, demanding the removal of the trademarks. The gas station operator refused, alleging that the termination violated the Petroleum Marketing Practices Act (PMPA), which regulates the termination and nonrenewal of petroleum marketing franchises.The United States District Court for the Western District of Washington dismissed the gas station operator’s PMPA claim. The court held that no PMPA franchise existed because the refiner did not supply the fuel to either the operator or the logistics company. The court reasoned that the statute required the refiner to be the supplier of the fuel for a franchise relationship to exist under the PMPA.The United States Court of Appeals for the Ninth Circuit reviewed the dismissal de novo. It held that the PMPA does not require the refiner to supply the actual fuel; rather, a franchise exists if there is a contract authorizing the use of the refiner’s trademark in connection with the sale of motor fuel. The court determined that the operator plausibly alleged franchise relationships with both the refiner and the logistics company, based on the mutual obligations in the agreements and the statutory definitions. The Ninth Circuit reversed the district court’s dismissal of the PMPA claims and remanded the case for further proceedings. View "CAN-AM FUEL DISTRIBUTION, LLC V. SINCLAIR OIL, LLC" on Justia Law

Koi Design LLC retained Marron Lawyers, APC in April 2016 to represent it in a trademark dispute with Strategic Partners, Inc. When SPI sued Koi for trademark infringement, Marron—through its associate, A. Douglas Mastroianni—handled the case. Mastroianni repeatedly missed court deadlines and failed to participate in required discovery meetings, prompting warnings and potential sanctions from the court. Marron did not inform Koi of these mishaps or its internal concerns about Mastroianni’s competence. After repeated lapses, Marron terminated Mastroianni, but again did not disclose the reasons to Koi. Mastroianni continued to represent Koi at a new firm, and Koi ultimately suffered terminating sanctions and a default judgment with trebled damages, leading to bankruptcy.Koi sued Marron, Mastroianni, and another firm for breach of fiduciary duty, legal malpractice, and negligent supervision in the United States District Court for the Central District of California. Bloom Firm settled, and the district court granted summary judgment in favor of Marron on all claims, concluding that Koi had not established that Marron’s conduct caused its injuries. Koi appealed, arguing the district court erred both by granting summary judgment on grounds not adequately noticed and by finding no genuine dispute of material fact.The United States Court of Appeals for the Ninth Circuit reversed the district court’s grant of summary judgment. The court held that Marron owed duties to disclose material facts and supervise its employees under California law and professional conduct rules. The Ninth Circuit found genuine disputes of material fact regarding whether Marron breached those duties and whether its conduct was a “but for” cause of Koi’s harm. The court concluded that a reasonable jury could find Marron liable and remanded for further proceedings. View "IN RE: KOI DESIGN LLC V. MARRON LAWYERS, APC" on Justia Law

A company that owns the trademarks and trade dress for a well-known whiskey product objected to a dog toy produced by another company that parodied its bottle and labeling. The toy, named “Bad Spaniels,” mimicked the whiskey’s visual design and replaced references to the whiskey with scatological humor, including phrases like “Old No. 2 On Your Tennessee Carpet.” The whiskey company demanded the toy’s removal from the market, but the toy company instead filed a lawsuit seeking a declaration of non-infringement and non-dilution. The whiskey company responded with counterclaims for trademark infringement and dilution under federal and state law.The United States District Court for the District of Arizona initially found in favor of the whiskey company after a bench trial, concluding the dog toy infringed and diluted its trademarks and trade dress. On appeal, the United States Court of Appeals for the Ninth Circuit reversed on the dilution claim and vacated the finding of infringement. After further appeals, including a remand from the Supreme Court, the district court again found the toy company liable for dilution by tarnishment and entered a permanent injunction in favor of the whiskey company. The toy company appealed, arguing the whiskey company failed to establish dilution and that the federal dilution law was unconstitutional as applied.The United States Court of Appeals for the Ninth Circuit held that the whiskey company did not meet its burden to show dilution by tarnishment under the Federal Trademark Dilution Act. The court found that only “Jack Daniel’s” and its trade dress were proven famous, and the parody toy’s marks and trade dress, though similar, did not facially tarnish the famous marks or portray them in an unsavory context likely to damage their reputation. The court vacated the district court’s injunction and remanded for judgment in favor of the toy company. View "VIP PRODUCTS, LLC V. JACK DANIEL'S PROPERTIES, INC." 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

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

A technology company developed and copyrighted a facial motion capture software system used in film production. The company’s assets, including the software, were transferred among several affiliated entities, leading to a disputed sale to a visual effects contractor. The contractor, after acquiring the assets under contested circumstances, used the software in the production of a major motion picture for a film studio. The studio’s contract with the contractor gave it broad rights to supervise the contractor’s work, including the right to terminate the contract for copyright infringement. During production, representatives of the studio were present at all relevant sessions where the software was used, and evidence was presented that copyright notices appeared during these sessions.After the film’s release, the technology company sued the studio in the United States District Court for the Northern District of California, alleging vicarious and contributory copyright infringement. The district court granted summary judgment to the studio on the contributory infringement claim, finding insufficient evidence of the studio’s knowledge of infringement, but allowed the vicarious liability claim to proceed to trial. At trial, the jury found the studio vicariously liable, awarded actual damages, and returned an advisory verdict on profits. The district court later granted judgment as a matter of law for the studio, concluding there was insufficient evidence that the studio had the practical ability to supervise or control the contractor’s infringing conduct. The court also struck the plaintiff’s jury demand on the issue of disgorgement of profits, holding there was no statutory right to a jury trial for that remedy, and excluded certain expert testimony and evidence of an indemnification agreement.On appeal, the United States Court of Appeals for the Ninth Circuit reversed the district court’s grant of judgment as a matter of law, holding that there was sufficient evidence for a jury to find the studio had the practical ability to supervise or control the contractor’s infringing conduct. The Ninth Circuit affirmed the district court’s rulings striking the jury demand on disgorgement of profits, excluding the damages expert’s testimony, and excluding the indemnification agreement. The case was remanded for further proceedings consistent with these holdings. View "REARDEN, LLC V. WALT DISNEY PICTURES" on Justia Law

Anna Biani participated in an online role-playing forum themed around Victorian London, where she created three original characters: Charlotte Émilie Benoit, Frederick FitzClarence, and Landon Otis Lloyd. She registered copyrights for these characters and her forum posts. Biani alleged that the television series Penny Dreadful, which aired on Showtime, infringed her copyrights by incorporating aspects of her characters into the show’s characters, particularly Vanessa Malcolm and Sir Malcolm Murray. She pointed to similarities in character traits, backgrounds, and the casting of Eva Green, whom she had identified as resembling one of her characters.The United States District Court for the Central District of California reviewed Biani’s complaint. The court dismissed the case for failure to state a claim, finding that Biani had not plausibly alleged that the defendants had access to her work or that the similarities between the characters were so striking as to preclude independent creation. The district court applied the extrinsic test for substantial similarity, filtering out unprotectable elements such as stock features of the Victorian-era genre, and concluded that any remaining similarities were insufficient. Biani was given leave to amend but chose not to do so, resulting in dismissal with prejudice.On appeal, the United States Court of Appeals for the Ninth Circuit affirmed the district court’s dismissal. The Ninth Circuit held that, to state a claim for copyright infringement, a plaintiff must plausibly allege ownership of a valid copyright and that the defendant copied protected aspects of the work. The court found that Biani failed to plausibly allege copying, as the similarities were not so extensive as to preclude coincidence or independent creation. Additionally, the court agreed that Biani did not allege substantial similarity in protectable expression under the extrinsic test. The judgment of the district court was affirmed. View "BIANI V. SHOWTIME NETWORKS, INC." on Justia Law

Trader Joe’s, a national grocery store chain, has used its distinctive trademarks, including a unique red typeface and logo, since 1967 and does not franchise or license these marks. The company also sells branded merchandise such as reusable tote bags. Trader Joe’s United, a labor union representing some of Trader Joe’s employees, began selling merchandise—including tote bags, apparel, mugs, and buttons—on its website, allegedly using Trader Joe’s trademarks and design elements. Trader Joe’s sent cease-and-desist letters, objecting only to the union’s commercial use of its marks on merchandise, not to the union’s use of the company name for identification or advocacy. The union refused to comply, and Trader Joe’s filed suit, alleging trademark infringement, dilution, and related claims.The United States District Court for the Central District of California granted the union’s motion to dismiss the complaint with prejudice, finding no plausible likelihood of consumer confusion under the Sleekcraft factors and concluding that the Norris-LaGuardia Act (NLGA) barred injunctive relief because the dispute arose from a labor dispute. The district court also dismissed the trademark dilution claim under the nominative fair use doctrine and awarded attorneys’ fees to the union, finding the suit frivolous and improperly motivated.The United States Court of Appeals for the Ninth Circuit reversed the dismissal of the trademark infringement claim, holding that, when viewing the allegations in the light most favorable to Trader Joe’s, the district court erred in its application of the Sleekcraft likelihood-of-confusion test. The appellate court also held that the district court erred in dismissing the dilution claim without proper analysis and in concluding that the NLGA categorically barred injunctive relief at the pleading stage. The Ninth Circuit vacated the attorneys’ fees award and remanded for further proceedings. View "TRADER JOE'S COMPANY V. TRADER JOES UNITED" on Justia Law