Justia Intellectual Property Opinion SummariesArticles Posted in US Court of Appeals for the Third Circuit
Mallet & Co., Inc. v. Lacayo
In 2019, Mallet learned that Bundy was its newest competitor in the sale of baking release agents, the lubricants that allow baked goods to readily separate from the containers in which they are made. Bundy was well-known for other commercial baking products when it launched a new subsidiary, Synova, to sell baking release agents. Synova hired two Mallet employees, both of whom had substantial access to Mallet’s proprietary information. That information from Mallet helped Synova rapidly develop, market, and sell release agents to Mallet’s customers.Mallet sued, asserting the misappropriation of its trade secrets. The district court issued a preliminary injunction. restraining Bundy, Synova, and those employees from competing with Mallet. The Third Circuit vacated and remanded for further consideration of what, if any, equitable relief is warranted and what sum Mallet should be required to post in a bond as “security … proper to pay the costs and damages sustained by any party found to have been wrongfully enjoined or restrained.” A preliminary injunction predicated on trade secret misappropriation must adequately identify the allegedly misappropriated trade secrets. If the district court decides that preliminary injunctive relief is warranted, the injunction must be sufficiently specific in its terms and narrowly tailored in its scope. View "Mallet & Co., Inc. v. Lacayo" on Justia Law
Hepp v. Facebook
Hepp hosts FOX 29’s Good Day Philadelphia. In 2018, Hepp was told by coworkers that her photograph was making its way around the internet. The image depicts Hepp in a convenience store, smiling, and was taken without Hepp’s knowledge or consent. She never authorized the image to be used in online advertisements. Hepp alleged each use violated her right of publicity under Pennsylvania law. A dating app advertisement featuring the picture appeared on Facebook. A Reddit thread linked to an Imgur post of the photo. Hepp sued, citing 42 PA. CONS. STAT. 8316, and common law. The district court dismissed Hepp’s case, holding that the companies were entitled to immunity under the Communications Decency Act of 1996, which bars many claims against internet service providers, 47 U.S.C. 230(c). The Third Circuit reversed, citing an exclusion in 230(e)(2) limitation for “any law pertaining to intellectual property.” Hepp’s claims are encompassed within the intellectual property exclusion. View "Hepp v. Facebook" on Justia Law
Beasley v. Howard
In 1969, Beasley founded a band, “The Ebonys,” one of many bands that created the “Philadelphia Sound.” The Ebonys achieved some commercial success in the 1970s but never reached the notoriety of similar artists such as The O’Jays. Beasley alleges that The Ebonys have performed continuously. Howard joined the band in the mid-1990s. Beasley obtained a New Jersey state service mark for THE EBONYS in 1997. Beasley and his bandmates performed with Howard for several years before parting ways. Each artist claimed the Ebonys name. In 2012, Howard registered THE EBONYS with the Patent & Trademark Office (PTO). Beasley alleges that Howard’s registration has interfered with his business; he has not been able to register a band website that uses “the Ebonys” in its domain name, Howard has kept concert venues from booking Beasley’s performances, Howard has tried to collect royalties from Beasley’s recordings, and Howard has claimed to be the Ebonys’s true founder. Beasley filed unsuccessful petitions with the Trademark Trial and Appeal Board (TTAB) to cancel the mark, contending that Howard defrauded the PTO. The district court relied on claim preclusion to dismiss Beasley’s subsequent complaint. The Third Circuit remanded for a determination of the scope of Beasley’s claims. Trademark cancellation proceedings before TTAB do not have claim preclusive effect against federal trademark infringement lawsuits. TTAB’s limited jurisdiction does not allow trademark owners to pursue infringement actions or the full scope of infringement remedies. The court affirmed the dismissal of any claim that Howard defrauded the PTO. View "Beasley v. Howard" on Justia Law
Kars 4 Kids Inc. v. America Can! Cars For Kids.
America Can! Cars for Kids and Kars 4 Kids are charities that sell donated vehicles to fund children’s programs. America began receiving donations in the late 1980s and, in the early 1990s, began using the mark “Cars for Kids” in advertising campaigns. Kars first used flyers and bumper stickers, then distributed nationwide mailers. In the early 2000s, Kars began other advertising. In 2003, America noticed Kars’ advertisements in Texas and sent a cease and desist letter. America did not notice Kars’ advertisements in Texas for several years. Kars, however, kept advertising, including in Texas, and procured the URL www.carsforkids.com. In 2013, America sent Kars another cease and desist letter. Kars sued in 2014, bringing federal and state trademark infringement, unfair competition, and trademark dilution claims, and seeking equitable relief. America filed suit in 2015, asserting the same claims and seeking cancelation of Kars’ trademark for 1-877- KARS-4-KIDS under 15 U.S.C. 1119, financial compensation, and a nationwide injunction prohibiting Kars from using the mark.The Third Circuit held that America did not preserve its challenge to the denial of summary judgment on its trademark cancelation claims; America was first to use its mark in Texas and Kars waived any challenge to the validity of America’s marks; and the district court did not abuse its discretion by declining to award enhanced monetary relief or prejudgment interest. The court remanded for reexamination of the court’s conclusions on laches and disgorgement. View "Kars 4 Kids Inc. v. America Can! Cars For Kids." on Justia Law
Oakwood Laboratories LLC v. Thanoo
Oakwood hired Dr. Thanoo in 1997. As Oakwood's Senior Scientist, he signed confidentiality agreements. Thanoo designed Oakwood’s microsphere process technology. Oakwood invested more than $130 million and two decades in its Microsphere Project and developed the “Leuprolide Products,” which are bioequivalent to Lupron Depot®. Aurobindo contacted Oakwood to discuss collaboration. Some of Oakwood’s trade secret information was shared under a confidentiality agreement. Negotiations failed. Aurobindo hired Thanoo six months later and began developing microsphere-based injectable products that Oakwood alleges are “substantially similar to and competitive with Oakwood’s Microsphere Project." Oakwood asserts that the product could not have been developed within the rapid timeframe without Thanoo’s assistance and the use of Oakwood’s trade secret information.The Third Circuit vacated the dismissal of Oakwood's suit, asserting trade secret misappropriation, breach of contract, and tortious interference with contractual relations. Under the Defend Trade Secrets Act, 18 U.S.C. 1836(b), Oakwood sufficiently identified its trade secrets and sufficiently alleged that the defendants misappropriated those trade secrets. The “use” of a trade secret encompasses all the ways one can take advantage of trade secret information to obtain an economic benefit, competitive advantage, or other commercial value, or for an exploitative purpose, such as research or development. A trade secret plaintiff need not allege that its information was the only source by which a defendant might develop its product. Aurobindo's avoidance of substantial research and development costs that Oakwood has invested is recognized as "harm" in the DTSA. View "Oakwood Laboratories LLC v. Thanoo" on Justia Law
Federal Trade Commission v. AbbVie Inc
AndroGel, a testosterone replacement therapy, generated billions of dollars in sales, The Federal Trade Commission sued the owners of an AndroGel patent under Section 13(b) of the Federal Trade Commission Act, 21 U.S.C. 301, alleging that they filed sham patent infringement suits against Teva and Perrigo and entered into an anticompetitive reverse-payment agreement with Teva. The FTC accused the defendants of trying to monopolize and restrain trade over AndroGel. The District Court dismissed the FTC’s claims to the extent they relied on a reverse-payment theory but found the defendants liable for monopolization on the sham-litigation theory. The court ordered the defendants to disgorge $448 million in profits but denied the FTC’s request for an injunction.The Third Circuit reversed in part. The district court erred by rejecting the reverse-payment theory and in concluding that the defendants’ litigation against Teva was a sham. The court did not err in concluding the Perrigo litigation was a sham and that the defendants had monopoly power in the relevant market. The FTC has not shown that monopolization entitles it to any remedy. The court did not abuse its discretion in denying injunctive relief. The court erred by ordering disgorgement because that remedy is unavailable under Section 13(b). View "Federal Trade Commission v. AbbVie Inc" on Justia Law
Ezaki Gliko Kabushiki Kaisha v. Lotte International America Corp.
Ezaki, a Japanese confectionery company, makes and sells “Pocky,” thin, stick-shaped cookies that are partly coated with chocolate or flavored cream. The end of each is left partly uncoated to serve as a handle. In 1978, Ezaki started selling Pocky in the U.S. and began registering U.S. trademarks and patents. It has two Pocky product configurations registered as trade dresses and has a patent for a “Stick Shaped Snack and Method for Producing the Same.” In 1983, the Lotte confectionery company started making Pepero stick-shaped cookies partly coated in chocolate or flavored cream. Pepero “looks remarkably like Pocky.”In 1993-1995, Ezaki sent letters, notifying Lotte of its registered trade dress and asking it to cease and desist. Ezaki took no further action until 2015, when it sued, alleging trademark infringement and unfair competition, under the Lanham Act, 15 U.S.C. 1114, 1125(a)(1)(A). Under New Jersey law, it alleged trademark infringement and unfair competition. The Third Circuit affirmed summary judgment in favor of Lotte, holding that because Pocky’s product configuration is functional, it is not protected as trade dress. Trade dress is limited to features that identify a product’s source. Patent law protects useful inventions, but trademark law does not. View "Ezaki Gliko Kabushiki Kaisha v. Lotte International America Corp." on Justia Law
Federal Trade Commission v. AbbVie Inc
AndroGel is a testosterone replacement therapy that generated billions of dollars in sales. The Federal Trade Commission sued under Section 13(b) of the Federal Trade Commission Act, alleging that AndroGel’s patent owners filed sham patent infringement suits against Teva and Perrigo and entered into an anticompetitive reverse-payment agreement with Teva. The FTC accused the patent owners of trying to monopolize and restrain trade over AndroGel. The District Court dismissed the FTC’s claims to the extent they relied on a reverse-payment theory but found the owners liable for monopolization on a sham-litigation theory and ordered disgorgement of $448 million in ill-gotten profits. The court denied the FTC’s request for an injunction.The Third Circuit reversed in part, holding that the district court erred by rejecting the reverse-payment theory and in concluding the owners’ litigation against Teva was a sham. The court erred by ordering disgorgement because that remedy is unavailable under Section 13(b) of the FTC Act. The court affirmed in part. The district court correctly concluded that the Perrigo litigation was a sham and that the owners had monopoly power in the relevant market but did not show the monopolization entitles the FTC to any remedy. The court did not abuse its discretion in denying injunctive relief. View "Federal Trade Commission v. AbbVie Inc" on Justia Law
Advanced Fluid Systems Inc v. Huber
Huber stole confidential information from his employer AFS (a manufacturer of hydraulic systems) for an AFS competitor, Livingston, and later for a company he created, INSYSMA, to compete against both AFS and Livingston. AFS eventually sued, alleging trade secret misappropriation claims under the Pennsylvania Uniform Trade Secrets Act. On summary judgment, the district court held as a matter of law that Huber and INSYSMA were liable under the Trade Secrets Act for misappropriating AFS’s trade secrets. Following a bench trial, the court held Livingston and two of its employees jointly and severally liable with Huber and INSYSMA for that misappropriation, and held all defendants except a Livingston employee and INSYSMA liable for breach of fiduciary duty or aiding and abetting that breach, and awarded compensatory damages, exemplary damages, and punitive damages from various defendants.The Third Circuit affirmed, rejecting arguments that AFS does not “own” the purported trade secrets at issue; that the claimed trade secrets are not actually protectable under the Trade Secrets Act, that the Livingston Parties were prejudiced by their counsel’s conduct at and following the trial, and that the damages awards were unwarranted. The Act only requires that a plaintiff lawfully possess the trade secrets it wishes to vindicate. View "Advanced Fluid Systems Inc v. Huber" on Justia Law
Silvertop Associates Inc. v. Kangaroo Manufacturing Inc.
The parties dispute the validity of a copyright in a full-body banana costume. The Third Circuit applied the Supreme Court's decision in Star Athletica, L.L.C. v. Varsity Brands, Inc., 137 S. Ct. 1002 (2017), and held that the banana costume's combination of colors, lines, shape, and length (i.e., its artistic features) are both separable and capable of independent existence, and thus are copyrightable. The court held that the merger doctrine did not apply in this case, because copyrighting Rasta's banana costume would not effectively monopolize the underlying idea because there are many other ways to make a costume resemble a banana. Furthermore, the scenes a faire doctrine was inapplicable. Therefore, the district court did not err when it held that Rasta was reasonably likely to prove ownership of a valid copyright. View "Silvertop Associates Inc. v. Kangaroo Manufacturing Inc." on Justia Law