Justia Intellectual Property Opinion SummariesArticles Posted in US Court of Appeals for the Seventh Circuit
Nerio Perez v. Garland
In 2016, Nerio and her minor daughter sought admission to the U.S. without the required authorization. They applied for asylum and withholding of removal based on Nerio’s fear that her partner’s nephew, Walter, would harm them if they returned. Nerio testified that she and her partner, Yuny, have been together for 10 years. Around a year after they met, Nerio became pregnant. Yuny left Guatemala in 2009, but Nerio continued living with, and later near, Yuny’s family. Walter considered her as his “inferior” based on Nerio’s indigenous heritage, refusing to treat her as family. She further testified that around 2015, Walter began trying to physically harm her. Twice that year, he tried to hit her with his motorcycle. In February 2016, he shot at her with a rifle. Nerio obtained a protective order but did not press criminal charges because of family pressure.The Seventh Circuit upheld the denial of relief, finding that substantial evidence supports the immigration judge’s determination that Nerio failed to establish that the Guatemalan government is unable or unwilling to protect her. The IJ reasonably weighed the generalized country conditions report against Nerio’s specific testimony. View "Nerio Perez v. Garland" on Justia Law
Grubhub, Inc. v. Relish Labs LLC
Since 2013, Home Chef has created and delivered meal kits. In 2014, Home Chef began using its “HC Home Mark,” covered by five federal trademark registrations. Home Chef later merged with Kroger, and now delivers meals directly to customers and offers them for sale in Kroger stores, through Kroger’s website, and through food delivery services.Grubhub, an online food-ordering and delivery marketplace, owns numerous trademark registrations covering the GRUBHUB name and stylized variations. In 2021, Grubhub was acquired by JET, which owns food-delivery brands worldwide and combines its “JET House Mark” with local brand names when conducting business in various countries. JET has used the JET House Mark since 2014. JET had filed an international trademark application for the JET House Mark. A USPTO examiner found the JET House Mark “highly similar” and “confusingly similar” to the HC Home Mark and Home Chef Home Logo. JET withdrew its application. JET later combined the GRUBHUB word mark with the JET House Mark. Grubhub invested millions of dollars in rebranding its print and electronic materials.After receiving a cease-and-desist letter from Home Chef, Grubhub sought a declaratory judgment that its Logo did not infringe Home Chef’s marks. The Seventh Circuit affirmed the denial of Home Chef's motion for a preliminary injunction. The district court did not clearly err in finding that Home Chef failed to meet its burden to show a likelihood of success on the merits of its infringement claim. View "Grubhub, Inc. v. Relish Labs LLC" on Justia Law
Live Face on Web, LLC v. Cremation Society of Illinois, Inc.
The defendants each licensed computer code from Live Face for $328. Live Face then sued them for copyright infringement, seeking about $483,000 in damages. Live Face has roughly 200 copyright suits pending. After more than five years, with summary judgment pending, Live Face successfully moved to dismiss its suit with prejudice. It argued that a 2021 Supreme Court case (Google) made the defendants’ fair-use defense insurmountable. The defendants sought fees; the district court denied the motion, finding that the defendants did not prevail because of their defenses but rather due to a fortuitous, unforeseen change in the law.The Seventh Circuit vacated and remanded. The Copyright Act authorizes prevailing parties to recover costs and fees, 17 U.S.C. 505. Four nonexclusive factors are relevant: the frivolousness of the suit; the losing party’s motivation for bringing or defending against a suit; the objective unreasonableness of the claims advanced by the losing party; and the need to advance considerations of compensation and deterrence. The defendants did prevail because of their defenses, including their fair-use defense. No matter which side prevailed in Google, the law would favor one of these parties. It is unclear whether Google changed anything relevant here, without a proper analysis of how Google affected Live Face’s claims. Even if Google did change something fundamental, the defendants raised defenses apart from fair use, which might have defeated Live Face’s claims. View "Live Face on Web, LLC v. Cremation Society of Illinois, Inc." on Justia Law
Nulogy Corp. v. Menasha Packaging Co., LLC
Menasha licensed Nulogy’s software, Nulogy Solution. Years later, Deloitte reviewed Menasha’s systems in hopes of better integrating Nulogy Solution into Menasha’s other software. Deloitte and Menasha asked Nulogy to share proprietary information. Nulogy alleges that the two used this information to reverse engineer an alternative to Nulogy Solution. In 2020, Nulogy filed suit in Ontario’s Superior Court of Justice, alleging breach of contract by Menasha and violations of trade secrets by Menasha and Deloitte. Deloitte objected to jurisdiction in Canada.Nulogy voluntarily dismissed its trade secret claims against both companies and refiled those claims in the Northern District of Illinois under the Defend Trade Secrets Act, 18 U.S.C. 1836(b). The breach of contract claims against Menasha remained pending in Canada. Menasha moved to dismiss the U.S. trade secrets litigation. Menasha’s contract with Nulogy contained a forum selection clause, identifying Ontario, Canada. Deloitte did not join that motion but filed its own motion to dismiss arguing failure to state a claim. The district court dismissed the claims against Menasha but reasoned that the forum non-conveniens doctrine required the dismissal of the entire complaint, including the claims against Deloitte.The Seventh Circuit affirmed the dismissal of Nulogy’s claims against Menasha but reversed the Deloitte dismissal. Deloitte has no contractual agreement with Nulogy identifying Canada as the proper forum and continues to insist that Canadian courts do not have jurisdiction. View "Nulogy Corp. v. Menasha Packaging Co., LLC" on Justia Law
Sullivan v. Flora, Inc.
Sullivan registered copyrights for two “illustration collections,” comprising 33 individual illustrations, and sued Flora for infringing those copyrights, 17 U.S.C. 504(c)(1). A jury found that Flora willfully infringed Sullivan’s copyrights and awarded statutory damages for each of the individual illustrations infringed ($3,600,000). The Seventh Circuit rejected the court's test for calculating statutory damages, which focused exclusively on how the illustrations were copyrighted. The court adopted the “independent economic value test”: “A protected work has standalone value if the evidence shows that work has distinct and discernable value to the copyright holder.” On remand, the district court denied Flora’s request to reopen discovery; held that Flora had waived arguments challenging the independent economic value of certain illustrations; granted Sullivan summary judgment; and entered the same verdict, finding that the 33 illustrations constitute separate works.The Seventh Circuit reversed, finding that, in entering summary judgment, the district court violated the remand mandate and improperly weighed the evidence. The case must proceed to trial on the question of damages. The scope of the remand was narrow and limited to determining whether Sullivan’s illustrations “constitute 33 individual works or instead are parts of two compilations (corresponding with the two advertising campaigns in which Flora used the illustrations).” At trial, Flora is not prohibited from “nitpicking” specific aspects of the 33 illustrations to show that they lack independent economic value. Flora is not permitted to relitigate the issues of infringement or joint authorship. View "Sullivan v. Flora, Inc." on Justia Law
NBA Properties, Inc. v. HANWJH
NBA Properties owns the trademarks of the NBA and NBA teams. In 2020, a Properties investigator accessed HANWJH’s online Amazon store and purchased an item, designating an address in Illinois as the delivery destination. The product was delivered to the Illinois address. Properties sued, alleging trademark infringement and counterfeiting, 15 U.S.C. 1114 and false designation of origin, section 1125(a). Properties obtained a TRO and a temporary asset restraint on HANWJH’s bank account, then moved for default; despite having been served, HANWJH had not answered or otherwise defended the suit. HANWJH moved to dismiss, arguing that the court lacked personal jurisdiction over it because it did not expressly aim any conduct at Illinois. HANWJH maintained that it had never sold any other product to any consumer in Illinois nor had it any “offices, employees,” “real or personal property,” “bank accounts,” or any other commercial dealings with Illinois.The Seventh Circuit affirmed the denial of the motion to dismiss and the entry of judgment in favor of Properties. HANWJH shipped a product to Illinois after it structured its sales activity in such a manner as to invite orders from Illinois and developed the capacity to fill them. HANWJH’s listing of its product on Amazon.com and its sale of the product to counsel are related sufficiently to the harm of likelihood of confusion. Illinois has an interest in protecting its consumers from purchasing fraudulent merchandise. HANWJH alleges no unusual burden in defending the suit in Illinois. View "NBA Properties, Inc. v. HANWJH" on Justia Law
REXA, Inc. v. Chester
The Seventh Circuit affirmed the judgment of the district court granting summary judgment to Defendants on all claims asserted against them, including misappropriation of trade secrets and breach of an implied contractual obligation to assign patent rights but vacated the judgment awarding attorneys' fees, holding that a reduction in fees was warranted.REXA, Inc. sued Mark Chester and MEA, Inc. for misappropriation of trade secrets and breach of an implied contractual obligation to assign patent rights, alleging that Chester and MEA incorporated and disclosed confidential designs. The district court granted summary judgment to Defendants. The Seventh Circuit affirmed in part and vacated in part, holding that the district court (1) properly granted summary judgment in favor of Defendants; but (2) abused its discretion in awarding Chester and MEA approximately $2.357 million in attorneys' fees, which they requested as a sanction for REXA's litigation conduct, where the court did not make specific findings about each of REXA's objections to the fee petition. View "REXA, Inc. v. Chester" on Justia Law
Life Spine, Inc. v. Aegis Spine, Inc.
Life Spine makes and sells a spinal implant device called the ProLift Expandable Spacer System. Aegis contracted with Life Spine to distribute the ProLift to hospitals and surgeons. Aegis promised to protect Life Spine’s confidential information, act as a fiduciary for Life Spine’s property, and refrain from reverse-engineering the ProLift. Aegis nonetheless funneled information about the ProLift to its parent company, L&K Biomed to help L&K develop a competing spinal implant device. Shortly after L&K’s competing product hit the market, Life Spine sued Aegis for trade secret misappropriation and breach of the distribution agreement. The district court granted Life Spine a preliminary injunction barring Aegis and its business partners from marketing the competing product. Aegis argues that the injunction rested on a flawed legal conclusion—that a company can have trade secret protection in a device that it publicly discloses through patents, displays, and sales.The Seventh Circuit affirmed. While public domain information cannot be a trade secret, a limited disclosure does not destroy all trade secret protection. Life Spine did not publicly disclose the specific information that it seeks to protect by patenting, displaying, and selling the ProLift. Life Spine’s trade secrets are not in the public domain but are accessible only to third parties who sign confidentiality agreements. View "Life Spine, Inc. v. Aegis Spine, Inc." on Justia Law
Design Basics, LLC v. Kerstiens Homes & Designs, Inc
The Kerstiens family runs companies that build single-family homes out of Jasper, Indiana. Plan Pros and Prime Designs are home design companies that license their plans through Design Basics, which acts as a broker, serving as an intermediary between home builders and design firms. Design Basics markets the thousands of plans it holds copyrights to through trade publications, promotional materials placed in home improvement stores, and national builder associations and “has become a serial litigant,” having filed more than 100 infringement suits against home builders.In affirming the dismissal of Design Basic’s suit against the Kerstiens, the Seventh Circuit referred to “intellectual property trolls,” enforcing copyrights not to protect expression, but to extract payments through litigation. Design Basics has thin copyright in its plans because they consist largely of standard features found in homes across America. View "Design Basics, LLC v. Kerstiens Homes & Designs, Inc" on Justia Law
Design Basics, LLC v. Signature Construction, Inc.
Design Basics is a copyright troll and holds registered copyrights in thousands of floor plans for suburban, single-family tract homes. Its employees trawl the Internet in search of targets for strategic infringement suits of questionable merit, hoping to secure “prompt settlements with defendants who would prefer to pay modest or nuisance settlements rather than be tied up in expensive litigation.” The Seventh Circuit has previously (Lexington Homes) held that Design Basics’ copyright in its floor plans is thin. The designs consist mainly of unprotectable stock elements—a few bedrooms, a kitchen, a great room, etc. Much of their content is dictated by functional considerations and existing design conventions for affordable, suburban, single-family homes. When copyright in an architectural work is thin, only a “strikingly similar” work gives rise to a possible infringement claim.Design Basics sued Signature Construction for copying 10 of its registered floor plans for suburban, single-family homes. The district court granted Signature summary judgment based largely on the reasoning of Lexington Homes. The Seventh Circuit affirmed. For this category of claims, only extremely close copying is actionable as unlawful infringement. That standard is not satisfied in this case. View "Design Basics, LLC v. Signature Construction, Inc." on Justia Law