August 15, 2013

Consumer Health Information Sues Amylin and Eli Lilly for Copyright Infringement of Patient Education Materials

Indianapolis, Indiana -- Copyright lawyers for Consumer Health Information Corp. ("CHIC") of Virginia sued Amylin Pharmaceuticals, Inc. and Amylin Pharmaceuticals, LLC (collectively, "Amylin"), both of Los Angeles, California and Eli Lilly & Co. ("Lilly") of Indianapolis, Indiana (collectively, "Defendants") alleging copyright infringement of works that CHIC created for Defendants' use. 

CHIC is an entity with expertise in patient engagement and patient-adherence strategies, health literacy and patient education program development for prescription drugs, over-the-counter products and medical devices.

pic_main1.gifAmylin and Lilly are primarily engaged in the research, development, manufacture, marketing and sale of pharmaceutical medicines and devices.  In 2005, as part of a joint venture, they introduced the pharmaceutical drug Byetta to the marketplace.  Byetta is an injectable prescription medicine that may improve blood-sugar control in adults with type 2 diabetes mellitus.  As part of this joint venture, CHIC asserts that Amylin and Lilly agreed to share in the costs incurred and profits derived from Byetta.

In its copyright complaint, CHIC's intellectual-property counsel states that, after the launch of Byetta, Defendants experienced poor sales as a result of poor patient compliance.  CHIC asserts that patients had a difficult time understanding the materials that came with their medication and, thus, had a difficult time administering the drug properly.  Many patients stopped taking Byetta because of these difficulties.  As a result, patients stopped re-filling their Byetta prescriptions and sales of Byetta were poor.

CHIC contends that, in November 2005, Amylin and Lilly contacted CHIC to develop a strategy to improve the sales of Byetta by improving patients' understanding of how to use the medication and by motivating patients to stay in treatment.  A contract for the work was proposed by CHIC but not immediately approved by Defendants.  Amylin and Lilly provided additional related projects to CHIC between December 2005 and mid-March 2006 and CHIC indicates in its complaint that it completed these projects. 

CHIC asserts that, by mid-March 2006, it still had not been paid.  It threatened to stop work until its proposal was approved and payment for all past work on the patient-education project was received.  In response, Amylin and Lilly partially approved CHIC's proposal.  They, however, apparently demanded that a different version be signed and insisted that CHIC agree to Defendants' terms, as outlined in their Master Service Agreement ("MSA"), regarding the assignment of copyrights.

The complaint states that, by this time, CHIC had expended significant time and expenses in furtherance of the Byetta project.  CHIC claims that it was in jeopardy of imminent financial ruin if Amylin and Lilly did not pay for the services already rendered and that Defendants refused payment unless and until CHIC signed Defendants' MSA.  CHIC contends that it had little choice but to execute the MSA, which it did in March 2006.

In Section 4(a) of the MSA, the parties purported to designate CHIC's creation of the patient-education materials as works made for hire under 17 U.S.C. § 101 and, in turn, CHIC purported to assign its interest in the work-for-hire copyrights to Defendants.

CHIC contends, however, that the patient education materials which it created did not qualify as works for hire, stating that the patient education materials were not "instructional texts" or "textbook materials."  Moreover, it states that the materials were not used and were not designed to be used in "systematic instructional activity" or as part of a "curriculum."  Finally, it asserts that the materials were not part of a teaching method established by an educational institution or the government.  Rather, it claims that the materials were prepared for general readership for use in marketing a pharmaceutical product commercially, both nationally and internationally.  It concludes that, because the patient education materials did not qualify as works for hire, CHIC did not transfer any copyright interests to Defendants through section 4 of the MSA.

CHIC continues its assertions by claiming that, throughout the last seven years, Defendants have copied and used CHIC's works in an effort to derive profits from the marketing and sale of Byetta.  Defendants have earned gross profits in excess of several billions of dollars from the allegedly unauthorized use, copying, and publication of CHIC's works.  As such, CHIC contents that Defendants' profits gained from the use, copy, and publication of CHIC's works rightfully belong to CHIC.

In the complaint, copyright attorneys for CHIC allege a single cause of action: copyright infringement.  CHIC asks the court for damages, attorneys' fees, costs of court, and pre-judgment and post-judgment interest.

Practice Tip: What seems to have begun as a garden-variety contract dispute has been transformed into a copyright case which will presumably turn in no small part on the term of art "work made for hire."

Under 17 U.S.C. § 101, a "work made for hire" is (1) a work prepared by an employee within the scope of his or her employment; or (2) a work specially ordered or commissioned for use as a contribution to a collective work, as a part of a motion picture or other audiovisual work, as a translation, as a supplementary work, as a compilation, as an instructional text, as a test, as answer material for a test, or as an atlas, if the parties expressly agree in a written instrument signed by them that the work shall be considered a work made for hire. For the purpose of the foregoing sentence, a "supplementary work" is a work prepared for publication as a secondary adjunct to a work by another author for the purpose of introducing, concluding, illustrating, explaining, revising, commenting upon, or assisting in the use of the other work, such as forewords, afterwords, pictorial illustrations, maps, charts, tables, editorial notes, musical arrangements, answer material for tests, bibliographies, appendixes, and indexes, and an "instructional text" is a literary, pictorial, or graphic work prepared for publication and with the purpose of use in systematic instructional activities.

Continue reading "Consumer Health Information Sues Amylin and Eli Lilly for Copyright Infringement of Patient Education Materials" »

August 14, 2013

Stryker Prevails Again: Court Considers Zimmer's Willful Infringement, Triples Jury's $70 Million Award to $210 Million and Adds Another $18 Million

Grand Rapids, Michigan -- In 2010, Stryker Corp. of Kalamazoo, Michigan; Stryker Puerto Rico, Ltd. and Stryker Sales Corp. (collectively, "Stryker"), sued Zimmer, Inc. and Zimmer Surgical, Inc. of Warsaw, Indiana (collectively, "Zimmer"), alleging Logo.pnginfringement of U.S. Patent Nos. 6,022,329; 7,144,383; and 6,179,807, which have been issued by the U.S. Patent Office.  A jury awarded $70 million in damages.  In August 2013, the U.S. District Court for the Western District of Michigan trebled the jury's award.  The court also awarded supplemental damages, which were also trebled; attorneys' fees and prejudgment interest.

Stryker and Zimmer are the two principal participants in the market for orthopedic pulsed lavage devices.  A modern, orthopedic pulsed lavage device is a combination spray-gun and suction-tube, used by medical professionals to clean wounds and tissue during surgery.  In 2010, Stryker sued Zimmer, alleging that Zimmer's line of Pulsavac Plus pulsed lavage devices infringed three of Stryker's patents -- U.S. Patent No. 6,022,329 ("the '329 patent"), U.S. Patent No. 7,144,383 ("the '383 patent") and U.S. Patent No. 6,179,807 ("the '807 patent").  Zimmer lost every argument it advanced at claim construction and subsequently lost most of the disputed claims on summary judgment.  After claims construction and summary judgment, one infringement claim and 22 invalidity defenses remained for trial.

In February 2013, after two weeks of trial -- featuring hundreds of exhibits, more than a dozen witnesses, and multiple days of deliberation -- the jury returned a verdict unequivocally in Stryker's favor.  In particular, the jury found: (1) that the Pulsavac Plus products infringed upon the '329 patent; (2) that Zimmer failed to establish any of its 22 invalidity contentions; and (3) that Stryker was entitled to $70 million in lost profits.

Zimmer brought ten post-verdict motions for judgment as a matter of law ("JMOL") or for a new trial:

  • for JMOL to preclude Stryker from recovering lost profits damages from before November 5, 2010;
  • for JMOL as to the invalidity of claim 2 of the '329 patent, or, in the alternative, for a new trial on the validity of claim 2;
  • for JMOL barring Stryker from recovering pre-suit damages under the doctrine of laches;
  • for JMOL of non-infringement of claim 2 of the '329 patent, or, in the alternative, for a new trial on the issue of non-infringement of claim 2; 
  • for JMOL limiting Stryker's damages because Stryker failed to mark its pulsed lavage devices in accordance with 35 U.S.C. § 287(a) and for a new trial on the issue of marking;
  • for a new trial;
  • for JMOL that Stryker's asserted claims under the '383 patent are invalid, or, in the alternative, for a new trial on the validity of those claims; 
  • for JMOL that claims 45, 50, 51, and 52 of the '807 patent are invalid, or, in the alternative, for a new trial on the validity of those claims;
  • for JMOL that Zimmer did not willfully infringe Stryker's patents; and
  • for JMOL to preclude Stryker from receiving lost profits damages and limiting Stryker's reasonable royalty recovery, or, in the alternative, for a new trial on damages.

In its 58-page decision, the court discussed the various motions by Zimmer and elucidated the standard for granting a JMOL: Rule 50 of the Federal Rules of Civil Procedure permits a court to render JMOL only if a party has been fully heard on an issue and there is no legally sufficient evidentiary basis for a reasonable jury to find for that party on that issue.  It then discussed the standard for granting a new trial following a jury trial: "a court may grant a new trial under Rule 59 if the verdict is against the weight of the evidence, if the damages award is excessive, or if the trial was influenced by prejudice or bias, or otherwise unfair to the moving party."

The court held that neither the standard for granting JMOL nor the standard for granting a new trial had been met in any instance and denied all ten motions.

Stryker also brought several post-verdict motions; specifically, it sought:

  • a permanent injunction against Zimmer or, in the alternative, an ongoing royalty;
  • supplemental damages;
  • a finding that the case was an "exceptional case" and an award of attorney's fees;
  • an award of prejudgment interest; and
  • enhanced damages for willful infringement.

Each of Stryker's five motions was granted.  The court entered a permanent injunction prohibiting Zimmer from manufacturing, marketing or selling any products found to have infringed the '807 patent, including the infringing Pulsavac Plus products.  This was held to be appropriate as the evidence had shown that Zimmer's sale of infringing products had cost Stryker between 15% and 18% of its market share.  Such a loss of market share to an infringer was cited as a textbook example of irreparable harm which, in turn, supported the injunction.

Supplemental damages were also awarded.  The court held that the jury's $70 million award to Stryker of lost profits reflected the damages Stryker had suffered only through November 30, 2012.  Subsequently, Zimmer had supplemented the sales data for its infringing products, reflecting sales from December 1, 2012 through February 28, 2013.  Based on those supplemental data, Stryker's damages expert calculated Stryker's additional lost profits for that time frame to be $2,351,257.66, which the court awarded.

Stryker also moved for an award of attorneys' fees under 35 U.S.C. § 285.  Section 285 provides that, if the prevailing party establishes by clear and convincing evidence that the case is "exceptional," the court may exercise its discretion to award attorneys' fees.  The court cited various factors that could be used in determining whether a case was exceptional, for example: "willful infringement, fraud or inequitable conduct in procuring the patent, misconduct during litigation, vexatious or unjustified litigation, [or] conduct that violates Federal Rule of Civil Procedure 11."  The court awarded Stryker's attorneys' fees, holding that that the jury's finding of willful infringement weighed heavily in favor of such an award ("indeed, when a trial court denies attorney fees in spite of a finding of willful infringement, the court must explain why the case is not 'exceptional' within the meaning of the statute.") 

Prejudgment interest of $11,167,670.50 was also granted on both the jury award and the supplemental lost-profit damages Stryker incurred from December 1, 2012 to February 28, 2013. In addition, for the same reasons the court found this to be an "exceptional case," the court awarded Stryker additional prejudgment interest on its reasonable attorney's fees.

Stryker's final motion was for enhanced damages under 35 U.S.C. § 284, based on Zimmer's willful infringement.  Under § 284, "the court may increase the damages up to three times the amount found or assessed" at trial.  For this determination, the court referred to Read Corp. v. Portec, Inc..  In Read, the Federal Circuit held that the "paramount determination in deciding to grant enhancement and the amount thereof is the egregiousness of the defendant's conduct based on all the facts and circumstances."  In evaluating the egregiousness of the defendant's conduct, courts typically rely on the nine Read factors, which are:

  1. whether the infringer deliberately copied the patentee's ideas or design;
  2. whether the infringer investigated the scope of the patent and formed a good faith belief that it was invalid or not infringed;
  3. the infringer's conduct during litigation;
  4. the infringer's size and financial condition;
  5. closeness of the case;
  6. duration of the infringing conduct;
  7. remedial actions, if any, taken by the infringer;
  8. the infringer's motivation for harm; and
  9. whether the infringer attempted to conceal its misconduct.

The court found that all nine Read factors favored substantial enhancement of the jury's award.  It noted that, regarding the first factor, multiple trial witnesses testified that Zimmer deliberately copied Stryker's patented inventions.  On the second factor, Zimmer had presented no evidence that it had retained intellectual property counsel to advise it about the scope of Stryker's patents to form a good faith belief about invalidity or infringement, or that it had or had otherwise investigated whether it was likely infringing.  The third factor also favored enhancement, as Zimmer had needlessly delayed in producing requested information concerning its application for a patent for the Pulsavac Plus. With respect to the fourth factor, the court noted that Zimmer is a multi-billion dollar company with reported annual profits in excess of three-quarters-of-a-billion dollars.  It opined that while a $70 million verdict may sound large in the abstract, in the context of the substantial size and profitability of Zimmer, $70 million may not be enough, without enhancement, to deter infringing conduct.  

As to the fifth factor, the court noted for again that this was not a close case.  Every major decision -- from claim construction through post-verdict motions -- had gone against Zimmer.  On the sixth factor, the court commented that Zimmer's infringement had spanned more than a decade, from 2000 all the way through the date of the opinion.  With respect to the seventh factor, the court observed that at no point during its 12-plus years of infringement had Zimmer taken any remedial action to stop infringement or mitigate damages, including the two-plus years covered by the litigation.  In fact, as of the date the opinion was written, Zimmer was still manufacturing and selling the infringing products.  The eighth factor also counseled in favor of enhancement, principally because Zimmer and Stryker had been the only major competitors in the orthopedic pulsed lavage device market.  As a result, Zimmer's infringement of Stryker's patents could only have been motivated by a desire to harm Stryker by depriving it of market share.  Finally, on the ninth factor, although Zimmer had not attempted to hide the entirety of its misconduct, it had attempted to prevent Stryker from discovering certain aspects of its infringement in the period before the trial.

The court held that its analysis of the Read factors "overwhelmingly favor enhancement."  In accordance with that analysis, the court trebled both the jury's award of $70 million and the court's award of supplemental damages. 

In total, Zimmer has been ordered to pay Stryker over $228 million.  According to Reuters, Zimmer plans to appeal both the jury verdict and the recent rulings by the court.

Practice Tip:

While Zimmer's decision to infringe was presumably a business strategy, the findings of willfulness -- and, later, egregiousness -- made this approach an extremely expensive one.  The court acknowledged and considered Zimmer's tactic in its opinion, stating, "Zimmer chose a high-risk/high-reward strategy of competing immediately and aggressively in the pulsed lavage market and opted to worry about the potential legal consequences later." 

Willfulness consists of two elements: (1) an objective element that is often, but not always, a question of law, and (2) a subjective element that is inherently a question of fact, to be decided by the jury. 

Under the first prong, if an "accused infringer's position is susceptible to a reasonable conclusion of no infringement," the infringer's conduct cannot be objectively unreasonable.  Conversely, an action is objectively unreasonable if the infringer acted despite an objectively high likelihood that its actions constituted infringement of a valid patent. 

When considering the second prong -- the element of subjective willfulness -- fact-finders should consider: (1) whether the infringer copied the patentee's commercial products; (2) whether the infringer presented evidence that it obtained legal opinions of patent counsel to justify its infringing actions; (3) whether the infringer attempted to avoid infringement by designing around the patents; and (4) whether the infringer acted in accordance with the standards of commerce.

Continue reading "Stryker Prevails Again: Court Considers Zimmer's Willful Infringement, Triples Jury's $70 Million Award to $210 Million and Adds Another $18 Million" »

August 12, 2013

Hallmark Home Mortgage Sues Hallmark Rentals & Management for Declaratory Judgment of Non-Infringement

Indianapolis, Indiana -- Hallmark Home Mortgage, LLC of Fort Wayne, Indiana sued Hallmark Rentals & Management, Inc. of Bloomington, Indiana seeking a declaration that its uses of "Hallmark," including an application for the trademark "Hallmark," Serial No. 85/937,259, which is currently pending with the U.S. Trademark Office, are non-infringing. 

Hallmark Home Mortgage was founded in February 2007.  It operates a HHM-Logo.bmpmortgage-lending business under the trademark "Hallmark Home Mortgage," which currently operates in 11 locations in Indiana, Ohio and Florida.  It asserts that it has plans to expand its business into other states.  Hallmark Home Mortgage focuses on financial services for residential real estate.

In its complaint, Hallmark Home Mortgage states that it began using the Hallmark Home Mortgage trademark in connection with its home mortgage lending business in February 2007.   Since then, it claims that it has continuously and prominently used the trademark in connection with its home-mortgage lending business. 

Hallmark Home Mortgage has a pending application for trademark registration with the U.S. Patent and Trademark Office for the "Hallmark" mark (word only), in International Class 036 and used in connection with the following: Financial services, namely, mortgage planning; Financial services, namely, mortgage refinancing; Housing services, namely, real property acquisition and consumer financing to facilitate home ownership; Insurance agencies in the field of home, vehicles, personal property; Insurance brokerage in the field of home insurance; and Mortgage brokerage.

In addition to the application pending with the U.S. Patent and Trademark Office, Hallmark Home Mortgage is also the owner of the Trademark "Hallmark Home Mortgage," Registration No. 2013-0263, which is registered with the State of Indiana.  This mark is registered for use in connection with residential mortgage financing, settlement of mortgage loans, mortgage insurance and related services.

Hallmark Rentals & Management, the Defendant, operates one location in Bloomington, Indiana, at which it provides commercial and residential property management services under the brand name "Hallmark Rentals & Management."

In May 2013, Hallmark Rentals & Management sent a cease-and-desist letterHRM-Logo.bmp to Hallmark Home Mortgage claiming that the latter was infringing on Hallmark Rentals & Management's intellectual-property rights in the "Hallmark" mark and, further, was engaging in unfair competition.  In its communications, it claimed to own "common law trademark rights, common law service mark rights, and trade name rights . . . with regard to the Hallmark name."  It further indicated that it uses the Hallmark name in "activities hav[ing] to do with real estate."  Finally, it stated that it would sue Hallmark Home Mortgage if Hallmark Home Mortgage did not immediately cease and desist from any use of the term "Hallmark."

In response, Hallmark Home Mortgage sued Hallmark Rentals & Management for declaratory judgment.  It seeks a judgment of non-infringement of common law trademark rights under the Lanham Act, common law and the laws of Indiana.

In the complaint for declaratory relief, intellectual-property lawyers for Hallmark Home Mortgage listed the following:

·         Count I: Declaratory Judgment of Non-Infringement

·         Count II: Declaratory Judgment of No Unfair Competition

Hallmark Home Mortgage asks for a judgment that its use of the "Hallmark" trademark does not infringe upon any trademark rights of Hallmark Rentals and Management; a judgment that its use of the "Hallmark" trademark does not constitute unfair competition; an injunction preventing Hallmark Rentals and Management from interfering with Hallmark Home Mortgage's use and registration of the trademark "Hallmark," and from opposing, seeking to cancel, or otherwise objecting to any registration applications to the "Hallmark," trademark; attorney's fees and costs.

Practice Tip: Rights to a trademark may be limited to a particular segment of trade, on the theory that consumers would not be confused by two entities with similar names that engaged in significantly dissimilar businesses.  For example, consumers are not likely to confuse Delta Airlines and Delta Faucet.  Concurrent trademark registrations may also be allowed for marks that are geographically separate.   

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August 9, 2013

North American Van Lines Sues North American Master Lines for Infringement of "northAmerican" Mark

South Bend, Indiana -- Trademark lawyers for North American Van Lines, Inc. of Ft. Wayne, Indiana sued North American Master Lines, Inc.  of Hallandale, Florida alleging infringement of two trademarks for NORTHAMERICAN, Registration Nos. 0917431 and 0915264, which have been registered by the U.S. Trademark Office.

North American Van Lines asserts that, as early as 1946, it has used the mark Thumbnail image for Thumbnail image for Thumbnail image for Thumbnail image for NorthAmericanLogo.png"northAmerican" in conjunction with its packing and transportation services and that it has provided such services in all fifty states and the District of Colombia.  It owns two registrations for the mark, both of which were issued in 1971.

North American Master Lines provides packing and transportation services across the United States.  It offers local and interstate services for residential, business and military customers.

North American Van Lines claims that North American Master Lines previously did business as "1st Choice Van Lines, Inc." and that it changed its name to North American Master Lines in October 2012.  North American Master Lines also registered and is using the "NorthAmericanMasterLines.com" domain name.

North American Van Lines has filed a lawsuit alleging trademark infringement, unfair competition and cybersquatting. It states in its complaint that North American Master Lines was aware of the "northAmerican" marks and used them to profit from the consumer goodwill related to those marks.  It claims that it has received complaints from consumers who were confused regarding whether North American Master Lines was affiliated with North American Van Lines.  It also asserts that it sent a cease-and-desist letter to North American Master Lines but received no response.

 The complaint lists the following counts:

·         Count I: Cybersquatting Under 15 U.S.C. § 1125(d) with Respect to the NORTHAMERICAN Marks

·         Count II: Trademark Infringement of the NORTHAMERICAN Marks Under 15 U.S.C. § 1114(1)

·         Count III: Unfair Competition and False Designation of Origin of NORTHAMERICAN Marks Under 15 U.S.C. § 1125(a)

·         Count VI [sic]: Unfair Competition and Trademark Infringement of the NORTHAMERICAN Marks Under Common Law

North American Van Lines asks for a judgment that North American Master Lines has infringed upon the "northAmerican" marks; the transfer of the domain name "NorthAmericanMasterLines.com"; an injunction; an order directing North American Master Lines to engage in corrective advertising; an accounting and disgorgement of profits resulting from unlawful acts; damages, including treble damages; statutory damages up to $100,000 for domain-name infringement; and attorney fees and costs.

Practice Tip: Under U.S. trademark law, geographic terms or signs cannot be registered as trademarks if they are geographically descriptive of where the goods (or services) originate.  However, a geographical indication, as defined by the World Trade Organization, can also identify a particular good, not merely a geographic area.  In such a case, a geographic term has been used to identify the provider of a good and, over time, consumers begin to use that geographic term not only as a descriptor of the geographic source, but also of a particular company.  In such a case, the term has acquired "secondary meaning" -- the capacity to identify the provider of the good -- and can be protected as a trademark.

 

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August 8, 2013

Royal Purple Sues Compressor Parts, Michael Klipstein and Southern Parts & Engineering for Trademark Infringement

Indianapolis, Indiana -- Royal Purple, LLC of Indianapolis, Indiana has sued Compressor Parts of Holland, Ohio; Michael Klipstein ("Klipstein") and Southern Parts & Engineering Company, LLC ("Southern Parts") of Alpharetta, Georgia (collectively, "Defendants") for infringement of the trademarks ROYAL PURPLE Thumbnail image for Thumbnail image for Royal Purple Logo.JPGand SYNFILM, which have been registered by the U.S. Trademark Office.   

Royal Purple, which has also recently sued Liqui Moly, about which we blogged yesterday and previously, has filed an additional trademark-infringement suit in the Southern District of Indiana against Compressor Parts, Klipstein and Southern Parts. 

Royal Purple claims it has sold lubricants for more than 20 years and has trademarked the color purple, at least in conjunction with various lubricating oils.  It owns several federal trademark registrations for the color purple as applied to lubricating oils for automotive, industrial and household uses.  It also owns multiple trademarks incorporating the word "purple" as applied to various goods.  It also owns a trademark for the term "Synfilm," for synthetic, para-synthetic and hydrocarbon lubricants for industrial uses.  These trademarks are registered with the U.S. Trademark Office. 

Purple was chosen for its association with royalty.  (Historically, purple dye was so expensive to produce that it was used only by royalty.)  Royal Purple's purple-identified lubricant products are sold in over 20,000 retailers in the United States and Royal Purple claims a strong secondary meaning and substantial goodwill in its trademark as a result of this use.

In this complaint, trademark lawyers for Royal Purple assert that Defendants offer goods on the compressorparts.com website using Royal Purple marks in a manner that is likely to cause a substantial number of ordinary consumers to be mistaken, confused or deceived into thinking that Defendants' goods are offered by or affiliated with Royal Purple.  The complaint includes the following:

·         Count I: Federal Trademark Infringement

·         Count II: False Designation of Origin/False Advertising

·         Count III: Unfair Competition Under Indiana Common Law

·         Count IV: Common Law Trademark Infringement

Royal Purple seeks a permanent injunction; an accounting; damages, including punitive damages; interest; costs and attorneys' fees.

Practice Tip: As part of the claim, Royal Purple's lawyers included a count of trademark dilution.  This cause of action is distinct from trademark infringement and applies to trademarks that are deemed to be famous.  An action for dilution can assert either, or both, of two principal harms: blurring and tarnishment.  Dilution by blurring, codified in 15 U.S.C. 1125(c)(2)(B), arises when association with another similar mark causes the distinctiveness of the famous mark to be compromised.  In contrast, dilution by tarnishment under 15 U.S.C. § 1125(c)(2)(C) happens when the reputation of the famous mark is damaged by association with a similar mark. 

 

 

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August 7, 2013

Royal Purple Sues Liqui Moly GmbH and Liqui Moly USA for Trademark Infringement

Indianapolis, Indiana -- Royal Purple, LLC ("Royal Purple") of Indianapolis, Indiana sued Liqui Moly GmbH of Ulm, Germany and Liqui Moly USA, Inc. of Hauppauge, New York (collectively, "Liqui Moly") alleging infringement of two marks, Registration Nos. 2,691,774 and 2,953,996, which have been registered with the U.S. Trademark Office.

Royal Purple Logo.JPGRoyal Purple is again suing over the use of the color purple.  We have blogged previously about the company here.  Royal Purple claims it has sold lubricants for more than 20 years and has trademarked the color purple, at least in conjunction with various lubricating oils.  It owns several federal trademark registrations for the color purple as applied to lubricating oils for automotive, industrial and household uses.  It also owns multiple trademarks incorporating the word "purple" as applied to various goods.  These trademarks are registered with the U.S. Trademark Office. 

Purple was chosen for its association with royalty.  (Historically, purple dye was so expensive to produce that it was used only by royalty.)  Royal Purple's purple-identified lubricant products are sold in over 20,000 retailers in the United States and Royal Purple claims a strong secondary meaning and substantial goodwill in its trademark as a result of this use.

Liqui Moly is accused of distributing, offering to sell and selling products that infringe upon Royal Purple's trademarks and engaging in acts that constitute unfair competition and dilution.  Royal Purple also alleges that Liqui Moly's use is a purposeful attempt to trade upon Royal Purple's trademarks.  It asserts that Liqui Moly's infringing use of Royal Purple's intellectual property is likely to cause confusion, mistake or deception in customers or potential customers who encounter the Liqui Moly products.  It also claims that Liqui Moly's use will dilute the "distinctive quality" Royal Purple's trademarks.  Finally, it alleges that Liqui Moly's use removes from Royal Purple its ability to control the quality of products and services provided under Royal Purple's trademark, by placing them partially under the control of Liqui Moly, USA and Liqui Moly GmbH, two third parties unrelated to Royal Purple.

Trademark attorneys for Royal Purple filed suit alleging:

·         Count One: Trademark Infringement Under Federal Law - 15 U.S.C. § 1114

·         Count Two: Unfair Competition; False Designation of Origin Under Federal Law - 15 U.S.C. § 1125(a)

·         Count Three: Dilution Under Federal Law 15 U.S.C. 1125(c)

·         Count Four: Dilution in Violation of Indiana Code § 24-2-1-13.5

·         Count Five: Common Law Trademark Infringement

·         Count Six: Unfair Competition Under Indiana Common Law

·         Count Seven: Unjust Enrichment

Royal Purple seeks preliminary and permanent injunctions, the destruction of all allegedly infringing inventory, treble damages, costs and attorneys' fees.

Practice Tip #1: Color can serve as a useful identifier of the source of goods to consumers.  The courts, however, have had to draw some narrow lines to balance the various interests.  On the one hand, companies often invest significant amounts of money in promoting their brands and color is frequently a component of that promotion.  On the other hand, there are a limited number of colors -- and an even more limited number of colors that are pleasing and appropriate for any given type of product -- and courts are wary of providing a monopoly on any given color to any one company.  After all, if such a monopoly is first provided to one company, all too soon the entire spectrum may be spoken for.

Practice Tip #2: This complaint, which is very similar to an earlier action filed by Royal Purple, has added Liqui Moly USA, Inc. as a defendant and largely omitted the earlier-filed claims relating to a third trademark, registered under the U.S. Registration No. 3,819,988.

 

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August 6, 2013

177 Trademark Registrations Issued to Indiana Companies in July, 2013

The US Trademark Office issued the following  trademark registrations to persons and businesses in Indiana in July, 2013, based on applications filed by Indiana Trademark Attorneys:

 Reg. Number  Mark Click to View
1 4360129 ORCHEX View
2 4376619 FIBER FOR LIFE View
3 4376513 View
4 4376476 INDY 500 View
5 4376381 CURB TO CLICK View
6 4376287 View
7 4376227 V View
8 4376207 THRIVINGBUSINESS.COM View
9 4376200 THRIVING BUSINESS View
10 4376131 INDUX View

   

Continue reading "177 Trademark Registrations Issued to Indiana Companies in July, 2013" »

August 2, 2013

Patent Office Issues 176 Patents To Indiana Citizens in July, 2013

The US Patent Office issued the following 176 patent registrations to persons and businesses in Indiana in July, 2013, based on applications filed by Indiana Patent Attorneys:

Patent No.           Title

  

1

D687,130

Faucet handle

2

D687,127

Faucet

3

D687,126

Faucet

4

D686,837

Chair

5

8,498,733

Method and apparatus for reducing tool change operations

6

8,498,358

Multiple antenna communication system including adaptive updating and changing of codebooks

7

8,498,356

Apparatus and method of generating codebook for multiple input multiple output communication system

8

8,497,608

Electric machine cooling system and method

9

8,497,607

Electric machine with integrated coolant temperature sensor

10

8,497,270

Macrocyclic integrase inhibitors

Continue reading "Patent Office Issues 176 Patents To Indiana Citizens in July, 2013" »

August 1, 2013

Endotach Sues Cook Medical for Infringement of Patented Endovascular Technology

Indianapolis, Indiana -- Endotach, LLC ("Endotach") of Plano, Texas sued alleging that Cook Medical Incorporated ("Cook Medical") of Bloomington, Indiana infringed two patents: Endovascular Bypass Graft, Patent No. 5,122,154, and Endovascular Stent with Secure Mounting Means, Patent No. 5,593,417, which have been issued by the U.S. Patent Office.

The patents, both of which were issued in the 1990s, were granted to Dr. Valentine Rhodes, an award-winning surgeon who practiced in the field of vascular medicine for over 30 years.  The patents are directed to intraluminal and endovascular grafts for placement within a blood vessel, duct or lumen to hold it open.  As it pertains to this lawsuit, the patents-in-suit are used for revascularization of aneurysms or stenosis occurring in blood vessels which includes anchoring projections to aid in securing the graft in place within the blood vessel.

Upon the death of Dr. Rhodes, the patents-in-suit passed as part of his estate to his wife, Brenda Rhodes.  While Mrs. Rhodes remains the owner of the patents, Endotach asserts that it is the exclusive licensee and has the right to enforce the patents against all infringers. 

In its complaint, patent attorneys for Endotach asserted infringement of one or more claims in each of the patents-in-suit.  It seeks a judgment that the patents-in-suit have been infringed, either literally and/or under the doctrine of equivalents; damages, including treble damages; costs; interest; attorneys' fees and an injunction.

Practice Tip:

This complaint was filed to err on the side of caution.  A previous matter, Endotach LLC v. Cook Medical Incorporated, Civil Action No. 1:12-cv-01630-LJM-DKL, which was initiated by a complaint making similar allegations, is currently pending before the same court.  However, in that matter, Cook Medical has challenged the sufficiency of the transfer of the exclusive license to Endotach and, thus, Endotach's standing to bring that prior lawsuit.  Pursuant to that allegation, Cook Medical asserted that the matter should be dismissed.  That motion is still pending.

Endotach entered into a subsequent agreement that purports to remedy any deficiencies related to standing.  It then filed this current complaint.  It has indicated its intention to consolidate this later-filed action with the matter currently before the court.

Continue reading "Endotach Sues Cook Medical for Infringement of Patented Endovascular Technology" »

July 31, 2013

Riders Choice Sues Golden West Saddle Blankets for Declaratory Relief

Terre Haute, Indiana -- Copyright lawyers for Riders Choice, LLC d/b/a Show and Tell Saddle Blankets ("Riders Choice") and Loni Rhodes ("Rhodes"; collectively,"Plaintiffs") of Center Point, Indiana sued for declaratory relief over allegations of copyright infringement made by Lori Heckaman ("Heckaman") d/b/a Golden West Saddle Blankets ("Golden West" or "Defendant") of Gainesville, Texas. 

Riders Choice, sometimes operating as "Show and Tell Saddle Blankets," makes and sells products related to horseback riding, including hand-woven saddle blankets with colorful geometric designs.  Rhodes owns Riders Choice.  Heckaman, doing business as Golden West Saddle Blankets, also makes and sells products related to horseback riding, including blankets with colorful geometric designs. 

Intellectual property counsel for Heckaman sent two cease-and-desist letters to Rhodes and Riders Choice, the first on June 14, 2013 and the second on July 2, 2013.  The first cease-and-desist letter asserted that the designs on Heckaman's blankets were copyrighted and alleged against Rhodes and Riders Choice claims for copyright infringement based on Rhodes's and/or Riders Choice's manufacture, marketing and sale of its own blankets.  The second cease-and-desist letter made similar allegations.  Claims were also made against Rhodes and Riders Choice for business interference, unfair competition and misappropriation of trade secrets based on Rhodes's and/or Riders Choice's marketing of Riders Choice's blankets and alleged copying of Golden West's weaving and design methods.

Both cease-and-desist letters threatened Rhodes and/or Riders Choice with imminent litigation if Rhodes and/or Riders Choice did not comply with Defendant's demands, the first by writing "we will have no choice but to advise our client to protect her interests by instituting a suit in a court of competent jurisdiction," and the second by writing that although "Golden West prefers to resolve this matter without the necessity of court intervention, all necessary action will be taken if a voluntary agreement cannot be reached."  Both cease-and-desist letters demanded that Rhodes and/or Riders Choice stop marketing, selling and producing its blankets.  Further, a July 3, 2013 e-mail threatened Rhodes and Riders Choice with imminent litigation by writing that if Rhodes and/or Riders Choice did not "refrain from promoting, marketing, producing, and selling saddle blankets," Heckaman would have "no choice but to seek available remedies."

In response, copyright lawyers for Riders Choice filed a complaint under the Declaratory Judgment Act.  In the complaint, Plaintiffs assert that blankets with similar designs are widely produced and sold by third parties, that they did not believe that Heckaman had registered any of her designs with the U.S. copyright office, that the blankets Riders Choice sells are original works designed by Rhodes and that every blanket Riders Choice sells is unique in that no two blankets are sold with an identical pattern.  They further asserted that Rhodes learned these methods from books and other publicly available materials unaffiliated with Heckaman and that Rhodes had never copied Defendant's designs.

In the complaint, Plaintiffs ask for judgments of:

·         Count I -- No Copyright Infringement

·         Count II -- No Business Interference

·         Count III -- No Unfair Competition

·         Count IV -- No Misappropriation of Trade Secrets

Plaintiffs request that the court: (a) declare that Rhodes's and Riders Choice's blankets did not in the past and do not now infringe any of Defendant's valid copyrights; (b) declare that Rhodes and Riders Choice did not commit in the past and are not now engaged in business interference against Defendant based on the sale, marketing or production of blankets; (c) declare that Rhodes and Riders Choice did not commit in the past and are not now engaged in unfair competition against Defendant based on the sale, marketing or production of blankets; (d) declare that Rhodes and Riders Choice did not commit in the past and are not now engaged in the misappropriation of trade secrets from Defendant based on the sale, marketing or production of blankets; (e) award to Plaintiffs their costs and attorneys' fees.

Practice Tip:

As with a patentee who believes that his or her patent is being infringed, holders of copyrighted materials often will send a "cease-and-desist letter" -- a letter demanding that the purported infringer cease infringing.  To aid in convincing the accused infringer to meet its demands, the holder of the intellectual property may be tempted to use language such as plans of "instituting a suit" and seeking "court intervention," as Defendant did here. 

As this case demonstrates, this strategy may backfire.  By using such language, the Defendant can create an "actual controversy" for purposes of the Declaratory Judgment Act.  Thus, the party alleging infringement (the natural plaintiff in an infringement suit) may instead find itself being sued by the alleged infringer (the natural defendant), often in a jurisdiction that would not have been the first choice of the owner of the intellectual property.

One approach that may have yielded better results for Golden West might have been to approach the accused infringer with an offer to license the purportedly protected intellectual property.  With carefully crafted language, such a proposal might have served to put Riders Choice on notice of Golden West's belief that infringement was occurring without going so far as to create an "actual controversy" sufficient to support a lawsuit under the Declaratory Judgment Act.

Continue reading "Riders Choice Sues Golden West Saddle Blankets for Declaratory Relief" »

July 26, 2013

Lippert Components Manufacturing Sues AL-KO Kober for Patent Infringement

South Bend, Indiana -- Lippert Components Manufacturing, Inc. ("Lippert") of Goshen, Indiana sued AL-KO Kober, LLC ("AL-KO") of Elkhart, Indiana alleging patent infringement of three patented inventions: Retractable Room Actuation Assembly for Recreational Vehicle Having Engagement Means for Maintaining Constant Distance Between Drive Members and Engagement Members, Patent No. 8,235,455 (the "'455 Patent"); Retractable Room Actuation Assembly for Recreational Vehicle Having Engagement Mechanism for Maintaining Constant Distance Between Drive Members and Engagement Members, Patent No. 8,240,744  (the "'744 Patent"); and Retractable Room Actuation Assembly for Recreational Vehicle, Patent No. RE44,002  (the "'002 Patent"); which have been issued by the U.S. Patent Office.

Lippert claims ownership of the three patents-in-suit, which related to a retractable room assembly used in extending and retracting slide-out compartments for recreational vehicles.  The patents were granted in 2012 and 2013.

AL-KO is accused of having made, used, offered for sale and/or sold its retractable room actuation assembly for use in extending/retracting recreational vehicle slide-out compartments.  Lippert notified AL-KO of Lippert's '002 Patent, '455 Patent and '744 Patent and claimed infringement of those patents in a letter dated June 28, 2013 and received by AL-KO on July 1, 2013.

Patent attorneys for Lippert sued AL-KO on July 11, 2013 claiming patent infringement by AL-KO.  The complaint also asserts that AL-KO has induced and contributed to others' use of the patents-in-suit, including at least Augusta RV, by selling to them and instructing them to use Lippert's intellectual property.

The complaint lists the following:

·         Count I: '002 Patent Infringement

·         Count II: '455 Patent Infringement

·         Count III: '744 Patent Infringement

Lippert also contends that AL-KO has engaged in its conduct willfully and in complete disregard of, or with indifference to, Lippert's rights and interests.  It asks the court to consider this an "exceptional case" as that term is defined in 35 U.S.C. §285.

Lippert, via its patent attorneys, asks for an injunction; for an accounting; for damages, up to treble the amount of actual damages; for attorneys' fees and costs; and that the court require AL-KO to notify AL-KO's customers of AL-KO's unlawful acts.

Practice Tip: While the exact contents of the letter to AL-KO are unclear from the complaint, a company that receives a notification letter alleging infringement is well advised to contact intellectual-property counsel promptly.  The receipt of such a letter may constitute a legally significant event which triggers a duty by the recipient to take action, such as investigate whether any of the infringement claims in the letter have merit.  If the letter threatens legal action, the alleged infringer should consider initiating a suit under the Declaratory Judgment Act.  Declaratory judgment actions are frequently filed in intellectual-property matters, especially patent litigation.  Such a suit allows the potential defendant not only to choose its own forum, to the extent that the forum is consistent with jurisdictional restrictions, but also to remove an ever-present cloud of potential litigation and potential damages for patent infringement that may be continuing to accrue.

Continue reading "Lippert Components Manufacturing Sues AL-KO Kober for Patent Infringement " »

July 25, 2013

CarCheckup Alleges Infringement by CarMD.com and Innova Electronics of Patented Vehicle Code Readers

Indianapolis, Indiana -- CarCheckup, LLC of Carmel, Indiana has sued CarMD.com Corp. ("CarMD") and Innova Electronics Corp. ("Innova"), both of Irvine, California, for infringing two patents, Patent Nos. 6,807,469 (the "'469 Patent) and 6,925,368 (the "'368 Patent) both titled "Auto Diagnostic Method and Device," which have been issued by the U.S. Patent Office.

CarCheckup sells a device designed to improve teen-driver safety, track business mileage and explain the check-engine light in vehicles compliant with on-board diagnostic II (also known as "OBD-II") technology. 

Thumbnail image for logo_small.pngCarMD sells a "Handheld Device and Software Solution Kit," along with "Vehicle Health System" products.  The CarMD Vehicle Health System is a consumer product designed to enable car owners to monitor a vehicle's function, to catch hidden problems and to diagnose dashboard warning lights.  CarMD's products work on newer-model vehicles with on-board diagnostic technology by retrieving diagnostic codes from the vehicle's computer.  By using a CarMD code reader, a car owner, even one unsophisticated in car repair, can identify the problem(s) with his or her vehicle.

CarMD sells its products directly to consumers via infomercials, on its website at www.CarMD.com, through the Home Shopping Network and on www.Amazon.com.  Its products are also sold at various retail outlets, including Pep Boys.  Innova, an allegedly related enterprise, sells two different code readers in the United States and maintains web sites at www.CodeReader.com and www.Innova.com. 

Patent attorneys for CarCheckup sued CarMD and Innova, asserting a right to relief against them jointly, for infringing the '469 and '368 Patents, which are owned by CarCheckup.  CarCheckup alleges that, as part of a joint endeavor, CarMD sells and offers for sale infringing CarMD products, while Innova distributes and manufactures the products.  CarCheckup alleges that one or both of the Defendants has known about the patents-in-suit since at least as early as December 2012. 

The complaint lists the following claims:

·         Count I: Infringement of the '469 Patent against CarMD and Innova

·         Count II: Infringement of the '368 Patent against CarMD and Innova

CarCheckup asks the court for a judgment against CarMD and Innova; for a finding that the infringement has been willful and deliberate; for an award of damages adequate to compensate CarCheckup for the infringement it alleges, but in no event less than a reasonable royalty; for treble damages; for an injunction; and for a finding that this is an exceptional case and, thus, for an award of reasonable attorneys' fees and costs.

Practice Tip: The law of the "reasonable royalty" has been in transition recently.  The "25% rule," an approach that allocated 25% of the profits from an infringement to the patentee and the remaining 75% to the infringer, has been abandoned.  Long used in federal courts to establish a reasonable royalty as compensation for patent infringement under § 284 of the Patent Act, it was rejected by the Federal Circuit in 2011.  In its ruling in Uniloc v. Microsoft, the court held: "the 25 percent rule of thumb is a fundamentally flawed tool for determining a baseline royalty rate in a hypothetical negotiation.  Evidence relying on the 25 percent rule of thumb is thus inadmissible under Daubert and the Federal Rules of Evidence, because it fails to tie a reasonable royalty base to the facts of the case at issue."

 

Continue reading "CarCheckup Alleges Infringement by CarMD.com and Innova Electronics of Patented Vehicle Code Readers " »

July 24, 2013

Diamond Back Gutter Covers and Daniel Feldhaus Sue Midwest Enterprises for Patent Infringement

Lafayette, Indiana -- Diamond Back Gutter Covers, Inc. ("Diamond Back") of Lafayette, Indiana and Daniel E. Feldhaus ("Feldhaus") of Monticello, Indiana sued Midwest Enterprises of Saint Clair, Missouri alleging infringement of its "Gutter Debris Cover," Patent No. 7,627,991, (the "'991 Patent") which has been issued by the U.S. Patent Office.

Diamond Back manufactures and sells products related to the protection of gutter and drainage systems.  Diamond Back states that Midwest Enterprises is in a similar business and also does business under the name E-Z Products. 

A complaint against Midwest Enterprises was filed by patent attorneys for Diamond Back.  It focuses on Midwest Enterprises' EZ Double Lock gutter protectors, which Diamond Back asserts infringe upon the '991 Patent.  That patent, for a Gutter Debris Cover, was issued to Feldhaus in December 2009; Diamond Back is licensed to use the patent. 

Specifically, the complaint asserts that Midwest Enterprises has been and still is infringing the '991 Patent by making, selling and/or using a gutter-protection system embodying one or more of the patented inventions or by inducing others to infringe the '991 Patent.

In June 2012, correspondence to Midwest Enterprises alerted them that Diamond Back believed that they were infringing.  Diamond Back claims that Midwest Enterprises' actions which continued after having received notice, constitute willful conduct in disregard of its rights in the '991 Patent.

Diamond Back asserts that this is an exceptional case as defined by 35 U.S.C. 285.  It is asking the court for an injunction; for the destruction of infringing goods; for the destruction of items relating to the making and marketing such goods; for corrective advertising; for damages, including treble damages; and for attorneys' fees.

Practice Tip: If a court finds that a patent has been infringed upon, it may then consider the additional issue of whether the infringement was willful.  Infringing behavior that continued despite an allegation of infringement can support such a finding.  The determination that an infringement was "willful" can, in turn, increase damages significantly.

 

Continue reading "Diamond Back Gutter Covers and Daniel Feldhaus Sue Midwest Enterprises for Patent Infringement " »

July 22, 2013

Bekins Van Lines Sues Corporate Transfer & Storage, JLV Software and The Verderber Enterprise for Trademark Infringement of Bekins Marks

Indianapolis, Indiana -- Trademark lawyers for Bekins Van Lines, Inc. ("Bekins") of Indianapolis, Indiana sued Corporate Transfer & Storage, Inc. ("Corporate Transfer") of Ronkonkoma, New York; JLV Software of Pompano, Florida (also referred to in the complaint as "JVL Software") and The Verderber Enterprise of Orlando, Florida (collectively, "Defendants") alleging infringement of the trademark BEKINS which has been registered as Trademark No. 2,427,605 with the U.S. Trademark Office.

Thumbnail image for ImageAgentProxy.gifBekins is the fourth-largest household-goods carrier in the United States.  Headquartered in Indianapolis, Indiana, Bekins offers private and corporate household-goods relocation services both domestically and internationally.  The United States Military is one of the company's largest customers.

Corporate Transfer offers household moving, corporate relocation and storage services.  The Verderber Enterprise specializes in providing technology innovations to entrepreneurs and corporate enterprises worldwide.

In December 1955, Bekins' predecessors in interest were granted the registration of the stylized mark "Bekins."  The first use in commerce was noted as 1891.  A second "Bekins" mark was granted to Bekins' predecessors in interest in February 2001.  The two marks were assigned to the plaintiff in this case on April 16, 2012. 

The Defendants were, at one point, licensed agents of Bekins Van Lines, LLC.  However, Bekins asserts, they have never been affiliated in any way with Bekins Van Lines, Inc.  After Bekins Van Lines, Inc.'s acquisition of certain assets from Bekins Van Lines, LLC and Bekins Holding Corp. on April 2, 2012, Corporate Transfer was allegedly notified that it was required to cease using all of the Bekins marks immediately, as it was not an agent for the new owner of the Bekins marks. 

Bekins claims that, despite this notice and three additional notices, the Defendants' use of the Bekins marks on the Corporate Transfer website, the use of the domain name www.bekinsrelo.com and the use of the Bekins mark on social-media sites continued.  Bekins also asserts that Corporate Transfer indicated that its use of the Bekins mark would be discontinued but that, in the spring of 2013, the website was reactivated.  Bekins contends that, when it again demanded that the domain name be taken down and transferred to Bekins, Corporate Transfer then redirected the domain to point to a consumer-comment site which was tremendously critical of Bekins Van Lines, Inc.

Finally, Bekins asserts that Corporate Transfer continues to infringe upon the Bekins marks through the maintenance of the www.bekinsrelo.com site, the use of Bekins marks on its website at www.corporatetransfer.com and various references to the Bekins marks on social-media sites.

For its claims, Bekins lists the following:

·         Count I: Federal Trademark Infringement

·         Count II: Federal and State Unfair Competition/Trademark Dilution

Bekins asks for an injunction; for an award of Defendants' profits earned from the acts claimed to be infringing; for an award of damages, including punitive damages; and for attorneys' fees and costs.

Practice Tip: Bekins asserts that its marks have acquired strong secondary meaning as a symbol of origin among consumers and the industry as a result of many years of use.  It further asserts that the marks are famous.  The assertion that its marks are famous allows it to pursue the additional claim of trademark dilution under the Federal Trademark Dilution Act.

 

Continue reading "Bekins Van Lines Sues Corporate Transfer & Storage, JLV Software and The Verderber Enterprise for Trademark Infringement of Bekins Marks" »

July 19, 2013

Batman Villainess Catwoman Gets "Clean Slate"

South Bend, Indiana -- The Northern District of Indiana has ruled in favor of Warner Brothers Entertainment, Inc. ("Warner Bros.") of Burbank, California which had been sued by trademark holder Fortres Grand Corporation ("Fortres WarnerBrosLogo.JPGGrand") of Plymouth, Indiana.  Fortres Grand had alleged that Warner Bros. infringed its trademark, Registration No. 2,514,853, for the mark CLEAN SLATE, which has been registered by the U.S. Trademark Office.

Fortres Grand develops, markets and sells software. Since 2000, it has marketed and sold software called "Clean Slate."  The Clean Slate software protects the security of computer networks by erasing all evidence of user activity so FortresGrandLogo.JPGthat subsequent users see no indication of a previous user's activity, meaning that each new user starts his or her computer activity with a "clean slate."  Fortres Grand has sold millions of dollars worth of its Clean Slate software.  In 2001, Fortres Grand obtained a federal trademark registration for the use of "Clean Slate" in connection with "computer software used to protect public access computers by scouring the computer drive back to its original configuration upon reboot."

Warner Bros. is one of the most famous names in movie history.  In the summer of 2012, it released its latest Batman film, The Dark Knight Rises.  One of the plot lines in the film involves the character Selina Kyle (a.k.a. supervillainess Catwoman) and her attempt to procure a software program that will erase her criminal history from every computer database in the world.  The software program she is trying to obtain was designed by the fictional company Rykin Data and is referred to four times in the film as "clean slate."

Two websites -- rykindata.com and rykindata.tumblr.com -- were also created to promote the film.  These websites are consistent with a recent trend in the online advertising of films: rather than just creating a straightforward promotional website where consumers can get information about the film (like, in this instance, www.thedarkknightrises.com), additional websites are created that market the film in a more subtle or creative way.  In this instance, the websites are essentially a creative outgrowth of the fictional world of the film.  They look like what a (fictional) citizen of Gotham might find if they were looking for information on the (fictional) Rykin Data company.  These websites also use the term "clean slate" to describe the software referenced in the film.

Fortres Grand filed suit on September 19, 2012 alleging three counts based on the use of "clean slate" in the film and on the websites: 1) trademark infringement under the Lanham Act (15 U.S.C. § 1051 et seq.); 2) unfair competition under the Lanham Act; and 3) unfair competition under Indiana state law.

Fortres Grand asserted that it is, in fact, trademark infringement when a fictional product bears the same name as a real product.  Warner Bros. took the opposite view and moved to dismiss the case.

The court began by noting that there is surprisingly little case law in matters such as these.  Despite the many movie and television releases every year, courts have rarely been called upon to answer the question of whether it is trademark infringement if a fictional company or product in a movie or television drama bears the same name or brand as a real company or product. 

The court analyzed all three of Fortres Grand's claims -- infringement, federal unfair competition, and state unfair competition -- under the same trademark infringement analysis.  It noted that an essential ingredient of trademark infringement is a likelihood of confusion among consumers as to the source of a product.  Specifically, only confusion about origin supports a trademark claim.  For this purpose, "origin" means the producer of the tangible product sold in the marketplace.  Moreover, although the hallmark of trademark infringement is protecting against consumer confusion, it is not enough that there just be some generalized confusion.  Trademark infringement protects only against mistaken purchasing decisions and not against confusion generally.

In this case, Grand Fortres was arguing a case of reverse confusion.  This type of confusion exists when a junior user uses its size and market penetration to overwhelm the senior, but smaller, user. The "senior user" (here, Grand Fortres) is the first to adopt and use a mark anywhere in the country. The "junior user" (Warner Bros.) is the second user.  The reverse confusion doctrine protects the senior user's control of its mark and the goodwill created by the mark from a junior user's employment of the mark, and protects the public from being deceived into believing that the senior user's product emanates from, is connected to, or is sponsored by the junior user. 

The court was not persuaded by Grand Fortres' claim of confusion.  To state a claim for reverse confusion in this case, the court held that Fortres Grand had to make plausible allegations that Warner Bros. saturated the market with a product that the public had been deceived into believing emanated from, was connected to, or was sponsored by Fortres Grand.  The fatal flaw in Fortres Grand's case had to do with correctly identifying the exact product that Warner Bros. had introduced to the market -- a film, not a piece of software.

The court held that a comparison between the two products led to the conclusion that there was no plausible claim for consumer confusion regarding a consumer's purchasing decision between the two nonfictional products -- Fortres Grand's software and Warner Bros.'s film.  "Plaintiff is not in the motion picture business," the court stated, citing a Warner Bros. pleading.  "[I]t would be absurd to think that customers buy tickets to The Dark Knight Rises or purchase the DVD/Blu-ray because of a perceived association of the Film with Fortres Grand's products."

Finally, the court discussed the First Amendment issues associated with considering a trademark infringement claim under the Lanham Act when the asserted infringement took place in an artistic work.  The Second Circuit's Decision in Rogers v. Grimaldi, a landmark opinion in such cases, in discussing the use of intellectual property in the title of a work states:

[T]he [Lanham] Act should be construed to apply to artistic works only where the

public interest in avoiding consumer confusion outweighs the public interest in

free expression.  In the context of allegedly misleading titles using a celebrity's

name, that balance will normally not support application of the Act unless the title

has no artistic relevance to the underlying work whatsoever, or, if it has some

artistic relevance, unless the title explicitly misleads as to the source or the

content of the work.

As several Circuits have done, the court extended this analysis to cover not only the title of an artistic work, but also the body of the work.  It concluded by holding that, even if there were a potential for consumer confusion caused by the use of "clean slate" in the film, the case still must be dismissed because Warner Bros.'s use of the term is also protected by the First Amendment. 

Practice Tip: A more plausible legal argument might have been trademark dilution.  The complaint, however, did not bring a claim under the Trademark Dilution Act.  This may have been because Fortres Grand recognized that its "Clean Slate" trademark was not a "famous" one, which is a requirement for bringing a trademark dilution case.

Continue reading "Batman Villainess Catwoman Gets "Clean Slate"" »