Justia Intellectual Property Opinion Summaries

Varco, L.P. (“Varco”), an oil and gas drilling company, purchased the assets of another drilling company, including U.S. Patent No. 5,474,142 (the “’142 Patent”). Varco’s parent company, Varco International, Inc., and a competitor, National Oilwell, Inc., completed a merger to form National Oilwell Varco, Inc. It was understood that Varco, as Varco International, Inc.’s operating company, would transfer its assets to the newly formed entity’s operating company: Plaintiff-Appellee/Cross-Appellant National Oilwell Varco, L.P. (“NOV”).  NOV filed an action in district court alleging that Defendant-Appellant/CrossAppellee Auto-Dril, Inc. (“Auto-Dril”) infringed the ’142 Patent (the “Underlying Action”). Auto-Dril and NOV entered into a confidential settlement agreement that was intended to end their litigation over the ’142 Patent (the “Settlement Agreement”). The parties appealed various holdings that both preceded and followed a trial regarding their 2011 Settlement Agreement.   The Fifth Circuit held that it lacks jurisdiction over Auto-Dril’s counterclaim for being fraudulently induced into entering the Settlement Agreement. The court reversed the ruling granting summary judgment for NOV on Auto-Dril’s claim for breach of the Settlement Agreement. The court reversed the dismissal of NOV’s claim for breach of the Settlement Agreement and remanded NOV’s JMOL motion for reconsideration. The court explained that here, NOV’s conduct did not rise to the level of a fraud on the court. Specifically, there is no clear and convincing evidence that NOV was cognizant that it did not own the ’142 Patent while it was litigating the Underlying Action. View "National Oilwell Varco v. Auto-Dril" on Justia Law

Sotheby’s International Realty commissioned Plaintiff to photograph Lugalla, an Irish estate owned by the Guinness family. Plaintiff took seven photographs of the property, and Lugalla was subsequently listed for sale. On March 7, 2017, Hearst Newspapers used Plaintiff’s photographs in a web-only article, which Hearst Newspapers published on websites associated with the Houston Chronicle, the San Francisco Chronicle, the Times Union, the Greenwich Time, and The Middletown Press. Plaintiff sued Hearst Newspapers for copyright infringement. On February 11, 2022, Plaintiff amended his complaint to bring a copyright infringement claim against Hearst Magazine Media, Inc. and to allege that his photographs were also used on websites associated with various media sources. Plaintiff brought these claims within three years of discovering the infringements but more than three years after the infringements occurred. The district court followed Graper, granted Plaintiff’s motion for summary judgment, and denied Hearst’s motion.   The Fifth Circuit affirmed. The court first explained that Graper is the only precedent binding upon the court to apply the discovery rule with respect to the Section 507(b) limitations period for copyright infringement claims. Further, the court wrote that the Supreme Court’s decisions in Petrella and Rotkiske did not unequivocally overrule Graper. And under Graper, Plaintiff’s copyright infringement claims were timely because he brought them within three years of discovering Hearst’s infringements. View "Martinelli v. Hearst Newspapers" on Justia Law

Direct Biologics, LLC (“DB”) brought claims for breach of covenant to not compete and misappropriation of trade secrets against Adam McQueen, DB’s former employee, and Vivex Biologics, Inc. (“Vivex”), McQueen’s new employer. After granting DB a temporary restraining order based on its trade secret claims, the district court denied DB’s application for a preliminary injunction. Finding that DB’s claims were subject to arbitration, the district court also dismissed DB’s claims against McQueen and Vivex and entered final judgment.   The Fifth Circuit vacated the district court’s orders denying DB’s motion for a preliminary injunction and dismissing DB’s claims and remanded. The court held that the district court did not abuse its discretion by declining to presume irreparable injury based on McQueen’s breach of his non-compete covenants. The court held that remand is thus proper to allow the district court to make particularized findings regarding irreparable harm; specifically, the likelihood of misuse of DB’s information and the difficulty of quantifying damages should such misuse occur. View "Direct Biologics v. McQueen" on Justia Law

Springboards for Education (“Springboards”) brought trademark infringement claims against McAllen Independent School District (“MISD”), a public school district in Texas, and IDEA Public Schools (“IDEA”), a nonprofit organization operating charter schools in Texas. The district court dismissed the suit against IDEA, concluding it was an arm of the state and therefore shared Texas’s sovereign immunity. As for MISD, the court found that it did not have sovereign immunity but ultimately granted summary judgment in MISD’s favor.   The Fifth Circuit affirmed the district court’s judgment for MISD. The court explained that while it disagrees with the district court’s conclusion that IDEA has sovereign immunity, the court affirmed the judgment for IDEA on alternate grounds. The court reasoned that in determining whether an entity is an arm of the state, the court balances the so-called “Clark factors,” which our court first articulated decades ago in Clark v. Tarrant County. Those factors are: (1) whether state statutes and case law view the entity as an arm of the state; (2) the source of the entity’s funding; (3) the entity’s degree of local autonomy; (4) whether the entity is concerned primarily with local, as opposed to statewide, problems; (5) whether the entity has the authority to sue and be sued in its own name; and (6) whether it has the right to hold and use property. The court held that factors one and three favor sovereign immunity while factors two, four, five, and six do not. The court concluded that IDEA is not an arm of the state and does not share in Texas’s sovereign immunity. View "Springboards v. IDEA Public Schools" on Justia Law

Plaintiffs petitioned the United States Patent and Trademark Office for federal registration of the mark “THEEILOVE”. That phrase, “Thee I Love,” comes from the alma mater of Jackson State University. They then sued the University’s licensing agent (Collegiate Licensing Company) and a few of the licensees in charge of producing and selling the University’s merchandise (Anthony Lawrence Collection, Defron Fobb, and Thaddeus Reed, together “the Licensees”). But they did not sue the University itself. Collegiate and the Licensees moved to dismiss under Federal Rule of Civil Procedure 12(b)(7). The district court granted the motion and dismissed the suit without prejudice.   The Fifth Circuit affirmed. The court held that the district court did not abuse its discretion in concluding that the University was a required party under Rule 19(a)(1)(B)(i). And because everyone agrees that the University enjoys sovereign immunity, the question becomes whether the district court abused its discretion in dismissing the case rather than proceeding without the University. Here, the University has a non-frivolous claim here. As a practical matter, this suit would impair or impede its ability to protect its interest in the “Thee I Love” mark. That is enough to require dismissal of the action because “there is a potential for injury to” the University’s “interests as the absent sovereign.” Finally, even setting aside the University’s sovereign status, the balance of Rule 19(b) factors weigh in favor of dismissal. As a result, the district court did not abuse its discretion in dismissing the case. View "Lee, et al v. Anthony Lawrence Collection, et al" on Justia Law

The Grill Holdings, L.L.C. (Khodr) filed suit in the Civil District Court for the Parish of Orleans seeking a declaratory judgment as to whether CGH (Shwartz) had the right to audit their books and records under the License Agreement. The state district court ruled in CGH’s favor on summary judgment, and the Louisiana Fourth Circuit Court of Appeal denied writ.The parties appealed to the Fifth Circuit. First, the Shwartz parties appealed, arguing that the district court erred in denying the Rooker-Feldman motion to dismiss and in the scope of its permanent injunction. Next, the Khodr parties cross-appealed, arguing that the district court erred in denying the motion for sanctions.The Fifth Circuit affirmed the district court’s rulings, including (1) a ruling denying a motion to dismiss; (2) a ruling entering a permanent injunction; and (3) a ruling denying a motion for Rule 11 and Section 1927 sanctions. The court explained that there was no room on remand for reconsideration of the alleged elements that constituted trade dress. Thus, the district court did not abuse its discretion by leaving wait staff attire out of the injunction. Further, the court held that the Rule 11 safe harbor provision requires identicality. Here, as the district court found, the served motion and the filed motion contained substantial differences. The motions were thus not identical, and the district court properly denied the motion and declined to enter sanctions. View "Uptown Grill v. Camellia Grill Holdings" on Justia Law

Continental, an auto-parts supplier, brought suit in the Northern District of California against several standard-essential patent holders and their licensing agent, claiming violations of federal antitrust law and attendant state law. The case was then transferred to federal district court where it was dismissed at the pleadings stage.The Fifth Circuit vacated the district court's judgment and remanded with instructions to dismiss for lack of standing. The court concluded that the two theories Continental alleges, based on indemnity obligations and a refusal to license, are inadequate to prove the supplier has Article III standing, let alone that it has antitrust standing or has suffered harm flowing from an antitrust violation. In this case, defendants' harm to Continental on account of Continental's indemnity obligations to original equipment manufacturers remains speculative. Furthermore, the court disagreed with the district court's conclusion that Continental's alleged unsuccessful attempts to obtain licenses on fair, reasonable, and nondiscriminatory terms from defendants comprise an injury in fact conferring Article III standing. View "Continental Automotive Systems v. Avanci, LLC" on Justia Law

Plaintiff, a sports psychologist, filed suit against the school district for copyright infringement after the softball team and flag corps at a public high school used their Twitter accounts to post a motivational passage from plaintiff's book, Winning Isn’t Normal.The Fifth Circuit affirmed the district court's grant of the school district's motion to dismiss and award of attorney's fees. The court considered the four factors of the fair use doctrine and concluded that even though the nature of the work favors plaintiff, the school's use was in good faith and not for a commercial benefit; the small excerpt from the book was freely accessible to the public; and plaintiff has failed to plausibly allege a substantially adverse impact on a legitimate market for his copyrighted work. The court concluded that "the purpose and character" factor, as well as "the effect of the use" factor, favor the school district. Finally, the district court did not abuse its discretion by awarding attorney's fees to the school district. View "Bell v. Eagle Mountain Saginaw Independent School District" on Justia Law

Domain Protection seeks the return of property for its conversion claim and statutory damages and attorney's fees on its Stored Communications Act claim. In its cross-appeal, Sea Wasp argues that Domain Protection lacked Article III standing and that the district court erred in ruling that Sea Wasp violated federal and state law. Sea Wasp also seeks attorney's fees for ultimately prevailing on the Texas Theft Liability Act claim. Attorney Schepps challenges the district court's sanctions.The Fifth Circuit concluded that there is no jurisdictional problem with this lawsuit because it is enough for Article III's injury-in-fact requirement that Domain Protection contended when filing suit that it did not possess domain names it owned. The court also concluded that the district court did not err as to the conversion claim where Domain Protection did not identify any property Sea Wasp has not returned; because Domain Protection did not prove actual damages, it is not entitled to statutory damages under the Stored Communications Act; Domain Protection's claims seeking to recover damages or attorney's fees are without merit; and because both sides prevailed in some aspects of this suit, the district court did not err in refusing to award fees. Finally, in regard to Schepps' challenges to the sanctions, the court remanded to allow the parties an opportunity to brief the issue of Schepps' failure to disclose his relationship with Domain Protection. Accordingly, the court affirmed except for the sanctions, vacating the sanctions and remanding for further proceedings. View "Domain Protection, LLC v. Sea Wasp, LLC" on Justia Law

The European Telecommunications Standards Institute (ETSI) established many global standards for 3G, 4G, and 5G cellular communications technology. ETSI members that own standard-essential patents must provide “an irrevocable undertaking in writing that [they are] prepared to grant irrevocable licenses on fair, reasonable and non-discriminatory (FRAND)” terms. Ericsson holds patents that are considered essential to the ETSI standards and agreed to grant licenses to other companies to use its standard-essential patents on FRAND terms. HTC produces mobile devices that implement those standards; to manufacture standard-compliant mobile devices, HTC has to obtain a license to use Ericsson’s patents. Ericsson and HTC have previously entered into three cross-license agreements for their respective patents. Negotiations to renew one of those agreements failed.HTC filed suit, alleging that Ericsson had breached its commitment to provide a license on FRAND terms and had failed to negotiate in good faith. The jury found in favor of the defendants. The district court entered a separate declaratory judgment that the defendants had affirmatively complied with their contractual obligations. The Fifth Circuit affirmed, rejecting challenges to the district court’s exclusion of HTC’s requested jury instructions, its declaratory judgment that Ericsson had complied with its obligation to provide HTC a license on FRAND terms, and the exclusion of certain expert testimonial evidence as hearsay. View "HTC Corp. v. Telefonaktiebolaget LM Ericsson" on Justia Law