Articles Posted in Attorney’s Fees

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Indianapolis, IndianaJudge Tanya Walton Pratt (pictured) of the Southern District of Indiana struck a response brief in the matter of Wine & Canvas Development, LLC. v. Theodore Weisser, Christopher Muylle, YN Canvas CA, LLC and Art Uncorked, noting that the brief was both late and longer than permitted.

In 2011, Wine & Canvas Development, LLC (“Wine & Canvas”) sued Muylle and others alleging the wrongful use of Wine and Canvas trademarks as well as the breach of non-competition agreements. Muylle counterclaimed against Wine and Canvas asserting abuse of process. In November 2014, after a four-day trial, the jury found for Muylle on all claims and awarded him $270,000.

After the conclusion of the trial, the Indiana trademark lawyer for Muylle petitioned the court for attorneys’ fees under § 1117(a) of the Lanham act, which provides that the court may award reasonable attorney fees to the prevailing party in “exceptional cases.” Muylle, via his trademark attorney, contended that this case was properly deemed exceptional as a result of the jury’s finding of abuse of process by Wine & Canvas. Muylle also noted that “the Court previously determined that ‘Wine & Canvas, Mr. Scott, [Ms. McCracken], and Mr. McCracken have flooded the Court with filings which has increased the work expended on the case and Wine & Canvas has filed numerous claims that the Court has found to be without merit.’ … And the Court has already sanctioned the Plaintiff not once but three times for failing to comply with discovery or court rules.” Muylle asked for $175,882.68 in attorneys’ fees.

Wine & Canvas asked for an extension of time to respond to this request, to January 15, 2015, which the court granted. Wine & Canvas subsequently requested an additional extension of time to file its response, specifically asking for a new deadline of January 19, 2015. The court granted this request, also.

Wine & Canvas filed its response brief on January 20, 2015. Muylle’s trademark attorney asked the court to strike that brief. The court noted that “[Wine & Canvas’] counsel’s repeated disregard for and supposed ignorance of the rules is no excuse, and an apology does not allow counsel to continue to disregard the rules and court orders” and admonished the trademark lawyer for Wine & Canvas for failing to meet his filing deadlines.

The court also noted that, in addition to the untimeliness of the filing, the 40-page brief was also overlong in violation of Local Rule 7-1(e)(1), which limits the length of response briefs to 35 pages.

Consequently, the court granted the motion to strike Wine & Canvas’ response brief. The court, however, also granted Wine & Canvas leave to file a belated response to Muylle’s petition for attorneys’ fees.

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Washington, D.C. – The U.S. Court of Appeals for the Federal Circuit ruled on the patent infringement litigation between Zimmer of Warsaw, Indiana and Stryker of Kalamazoo, Michigan. The Federal Circuit upheld the jury’s finding that Zimmer had infringed three of Stryker’s patents but overturned the decision of the Western District of Michigan to triple the damage award, reducing the award from $228 million to $70 million, and vacated the district court’s award of attorneys’ fees.

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 Corp, Stryker Puerto Rico, Ltd. and Stryker Sales Corp. (collectively, “Stryker”), sued Zimmer, Inc., Zimmer Surgical, Inc. and Zimmer Orthopaedic Surgical Products of Warsaw, Indiana (collectively, “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”). A jury awarded $70 million in damages and the district court increased that figure by approximately $2.4 million to reflect sales made by Zimmer during a time period that had not been considered by the jury.

Stryker also moved for enhanced damages under 35 U.S.C. § 284, alleging willful patent infringement by Zimmer. 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 had 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 district court found that all nine Read factors favored substantial enhancement of the jury’s award and trebled both the jury’s award of $70 million and the court’s award of supplemental damages.

In the current opinion, the Federal Circuit affirmed the jury’s findings that Stryker’s patents were valid and had been infringed by Zimmer, as well as the jury’s award of damages to Stryker but reversed the district court’s judgment that Zimmer’s infringement was willful.

To establish willfulness, the patentee has the burden of showing “by clear and convincing evidence that the infringer acted despite an objectively high likelihood that its actions constituted infringement of a valid patent.” If and only if the patentee establishes this “threshold objective standard” does the inquiry then proceed to the question of whether the objectively defined risk was either known or so obvious that it should have been known to a party accused of patent infringement.

The Federal Circuit noted that the district court had failed to undertake the required objective assessment of Zimmer’s specific defenses to Stryker’s claims. The Federal Circuit then considered the question of objective recklessness, which “will not be found where the accused infringer’s position is susceptible to a reasonable conclusion of no infringement.” The court held that the objective standard showed that Zimmer had presented reasonable defenses to all of the asserted claims of Stryker’s patents. Consequently, Zimmer was found not to have acted recklessly and the decision to award enhanced damages was reversed.

Because the appellate court reversed the trial court’s determination that the infringement of the patents had been willful – and because district court’s award of attorneys’ fees was based on that determination – the Federal Circuit vacated district court’s finding that the case was exceptional as well as the award of attorneys’ fees and remanded the issue to the trial court for further consideration.

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Washington, D.C. – In two related rulings, the United States Supreme Court addressed the standards for granting and reviewing awards of legal fees in patent infringement lawsuits.

In the first matter, Octane Fitness, LLC was sued by Icon Health & Fitness, Inc. At issue was Icon’s contention that the use of a particular component in elliptical fitness machines constituted patent infringement. After Octane prevailed, it sought $1.8 million in attorneys’ fees. The district court denied these fees and an appeal was taken on the issue.

In its review, the Federal Circuit applied the rule from Brooks Furniture Mfg., Inc. v. Dutailier Int’l, Inc. In Brooks Furniture, the Federal Circuit had defined an “exceptional case,” which would warrant an award of legal fees, as one that either involves “material inappropriate conduct” or is both “objectively baseless” and “brought in subjective bad faith.” It then rejected Octane’s assertion – that attorneys’ fees were appropriate because Icon had asserted an unreasonable claim construction – as not falling within the Brooks Furniture definition and declined to overrule the district court’s denial of attorney’s fees.

In Octane Fitness v. Icon Health & Fitness, Case No. 12-1184, the Supreme Court reversed and remanded. Justice Sotomayor, writing for a unanimous court, said that the Federal Circuit’s interpretation of 35 U.S.C. §285 was overly rigid and “superimposes an inflexible framework onto statutory text that is inherently flexible.” Instead, the Court held that “an ‘exceptional’ case is simply one that stands out from others with respect to the substantive strength of a party’s litigating position (considering both the governing law and the facts of the case) or the unreasonable manner in which the case was litigated.

The Court also revised the standard of proof that had been required by the Federal Circuit. In Brooks Furniture, the Federal Circuit had held that §285 requires that parties establish the “exceptional” nature of a case by “clear and convincing evidence.” The Supreme Court opined that such a high standard was not supported by the statute. Instead, as patent infringement litigation is generally governed by a preponderance-of-the-evidence standard, that standard was also appropriate for the award of attorneys’ fees.

The second patent infringement litigation decided by the Supreme Court pertained to a patent infringement lawsuit filed by Allcare Health management Systems. After Allcare lost in the district court, the district judge awarded $5 million in attorneys’ fees to Highmark. The Federal Circuit reviewed the district court’s judgment de novo and reversed the award.

In Highmark v. Allcare Health Management Systems, Case No. 12-1163, the Supreme Court reversed the Federal Circuit’s reversal, holding that, in light of the traditional framework of review, the Federal Circuit should be more deferential to the trial court on the issue of the award of fees. The Supreme Court stated, “Traditionally, decisions on ‘questions of law’ are ‘reviewable de novo,’ decisions on ‘questions of fact’ are ‘reviewable for clear error,’ and decisions on ‘matters of discretion’ are ‘reviewable for abuse of discretion.'” The determination of whether a case should be considered to be “exceptional” for the purposes of awarding attorneys’ fees is a matter of discretion. As such, it is properly reviewed not de novo but instead for abuse of discretion.

Practice Tip: Under U.S. patent law, a trial court may award attorneys’ fees in case of patent infringement litigation that it deems “exceptional.” These Supreme Court rulings revisiting how “exceptional” is defined may benefit Google, Apple and other large technology companies, which are often targets of questionable patent infringement lawsuits, as trial judges will now have greater latitude to award attorneys’ fees in those cases in which they determine that the conduct of the losing party “stands out from others.”

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Coach-Picture.jpgSouth Bend, IndianaChief Judge Philip P. Simon of the Northern District of Indiana ordered Defendants The Treasure Box, Inc. and Heather Hiatt, both of Elkhart, Indiana to pay statutory damages, attorney’s fees and costs to Coach, Inc. of New York, New York and Coach Services, Inc. of Jacksonville, Florida for trademark infringement and counterfeiting.

By way of summary judgment, the court had earlier determined in this Indiana trademark and counterfeit litigation that Defendants The Treasure Box and Hiatt were liable for the trademark infringement and trademark counterfeiting of Plaintiff Coach’s trademarks. The court’s summary judgment determinations also included a finding that “The Treasure Box and Heather Hiatt acted with knowledge and intent” that was sufficient to support enhanced statutory damages. In this opinion and order, the court fixed the amount due to Coach from Defendants.

Instead of requesting actual damages resulting from Defendants’ trademark infringement and counterfeiting within Indiana, Coach opted for statutory damages under §1117(c). It asked the court for damages of $100,000 for each of the 15 infringing marks, for a total of $1,500,000. The Treasure Box and Hiatt, unrepresented by counsel at the time, filed no response or opposition to Coach’s damages request.

The court first addressed the proper measure of damages. Statutory damages for trademark infringement and trademark counterfeiting under 15 U.S.C. §1114 are limited to:

(1) not less than $1,000 or more than $200,000 per counterfeit mark per type of goods…, as the court considers just; or
(2) if the court finds that the use of the counterfeit mark was willful, not more than $2,000,000 per counterfeit mark per type of good…, as the court considers just.

Because the statute provides little guidance regarding what constitutes a “just” award, the court referred to the relevant factors under the analogous statutory damages provision in the Copyright Act, 17 U.S.C. §504(c). These considerations include: the profits reaped by the infringer; the revenues lost by the plaintiff; the value of the trademarks; whether the infringing conduct was willful; the duration of the infringement; and the potential deterrent effect on the defendant and others.

The court considered each factor in turn. It found that, because The Treasure Box’s operations were both brief and “even trivial” in scale, neither Defendants’ profits nor Coach’s lost revenue supported a large statutory damages award. Instead, the court cited Nimmer on Copyright for the proposition that statutory damages “should be woven out of the same bolt of cloth as actual damages.” “Statutory damages,” said the court, “should represent some approximation of actual damages and are not to represent a windfall to a prevailing plaintiff.”

In contrast, the factors of “value of the trademarks” and “willful conduct” weighed against Defendants. The court acknowledged that the Coach trademarks were valuable and noted that, in determining statutory damages, other courts had valued the trademarks at between $2,000 per mark and $30,000 per mark, for an average of approximately $14,000 per mark. Moreover, it characterized Hiatt’s infringement as having been pursued with “bold willfulness” with regard to her efforts to sell what she knew was knock-off Coach merchandise.

The last two considerations – duration of infringement and potential deterrent effect on Defendant and others – weighed against a large award of damages. The Treasure Box had operated for only three months, closing in late 2011. Such a brief term of infringement, as well as the court’s conclusion that Hiatt and the defunct The Treasure Box were now apparently beyond deterrence, militated in favor of lower damages. Regarding deterrence for others, the court stated, “Mom & Pop operators such as the Hiatts could doubtless be deterred from similar conduct by much less frightful sums than the $1.5 million Coach requests.”

The court concluded that an award of $3,000 per trademark for each of the 15 counterfeited trademarks at issue, for a statutory damages award of $45,000, was appropriate.

The court was also asked to award to Coach attorney’s fees of $14,780 pursuant to §1117(a)(3). This section permits a court “in exceptional cases” to award reasonable attorney’s fees to the prevailing party. The court first noted the ambiguity inherent in the placement of §1117(a)(3) within the statute. Specifically, subsection (a) addresses recovery for actual damages, while subsection (c) allows a plaintiff to opt for statutory damages. Here, Coach chose an award of statutory damages under subsection (c), which raised the question of whether the provision for attorney’s fees under §1117(a)(3) could be applied.

The only Court of Appeals to have addressed the question was the Second Circuit. That court concluded that subsection (c) offers an election as to the basis for damages, but not an election regarding remedies, including attorney’s fees. Thus, it concluded, a court could award attorney’s fees in conjunction with an award for either actual or statutory damages. Chief Judge Simon adopted the Second Circuit’s reasoning. He also determined that the definition of an “exceptional” case – for example, one in which “the losing party was the defendant and had no defense yet persisted in trademark infringement” – was also met, given the willfulness of Defendants’ knowing sale of counterfeit Coach goods and that Defendants had no viable defense.

In addition to the statutory damages award of $45,000, the court awarded attorney’s fees of $14,780 as well as expenses and costs of $1,076.16 to Coach. The judgments were entered against Treasure Box, Inc. and Heather Hiatt jointly and severally.

Practice Tip: Chief Judge Simon noted that Coach had a history of requesting statutory damages that were considerably in excess of what was eventually awarded by the courts in other cases. In Coach, Inc. v. Paula’s Store Sportwear LLC, 2014 WL 347893 (D.N.J. Jan. 31, 2014), Coach requested $800,000 in statutory damages – $100,000 for each of eight counterfeited marks – at a shop from which four counterfeit Coach wallets and two counterfeit Coach handbags had been seized. In that litigation for counterfeiting, the court noted that the retail value of the six counterfeit items was less than $1500 and awarded $5000 for each of the eight marks that had been counterfeited, multiplied by the two types of goods, for a total statutory damages award of $80,000.

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Alexandria, Virginia – The District Court for the Eastern District of Virginia held in ShammasSeal-picture.jpg v. Focarino that the United States Patent and Trademark Office (“USPTO”) was entitled to recover attorneys’ fees when brought to court for a review of Trademark Trial and Appeal Board (“TTAB”) rulings.

An examiner for the USPTO had refused to register a trademark for the term PROBIOTIC for a fertilizer on the grounds that it was a generic term for fertilizers and, in the alternative, was descriptive with no secondary meaning. Plaintiff Milo Shammas brought the matter to the TTAB, which affirmed. Shammas then asked for a review of the TTAB decision under 15 U.S.C. 1071(b)(1) in the District Court for the Eastern District of Virginia.

Summary judgment was granted in favor of the USPTO, which then moved for fees and expenses under Section 21(b)(3) of the Lanham Act. Section 21(b)(3) provides that, in cases such as these, “all the expenses of the proceeding shall be paid by the party bringing the case, whether the final decision is in favor of such party or not.”

Shammus argued that it would be improper to award attorneys’ fees, as they were not included in the statutory term “expenses.” The court was not convinced, however, and held that the plain meaning of “expenses” included both attorneys’ fees and other costs. This interpretation, the court explained, was further bolstered by Congress’s inclusion of the word “all” before “expenses.”

In determining the correct measure of fees due, the court noted that, while using market rates for legal services is appropriate when calculating “reasonable attorneys’ fees,” an award of “expenses” must be based on the actual salaries (when calculated on a per-hour basis) of the government trademark lawyers who defended the action. Thus, in this case, where the statute provided for “expenses,” attorneys’ fees were properly based on the actual hourly rate paid to the attorneys.

Practice Tip #1: The American legal system typically requires each party to bear its own litigation expenses, including attorneys’ fees, regardless of the outcome of the case.

Practice Tip #2: This fee-shifting decision was a matter of first impression regarding Section 21(b)(3) of the Lanham Act. It held that “expenses” as contemplated therein included attorneys’ fees. Moreover, ex parte plaintiffs must pay those expenses whether or not they prevail on the merits.

Practice Tip #3: Section 1071 was characterized as “arguably an odd statute” by the court. The court remarked that the statute “provides unsuccessful trademark applicants with a choice between an appeal to the Court of Appeals for the Federal Circuit on the administrative record, or alternatively, an action in federal district court where the administrative record may be supplemented with new evidence. Congress’s decision to allow this choice is odd for several reasons. First, it serves to lessen the trademark applicant’s incentive to put her best evidentiary foot forward before the PTO given that if she fails before the PTO, she can supplement the record in the district court. Moreover, Congress no sooner provides this choice than it takes an energetic step to discourage its use by requiring the unsuccessful applicant who files the district court suit under § 1071(b) to pay all expenses of the district court proceeding, win, lose or draw. This could lead to an anomalous result where the applicant must pay the PTO’s expenses of the district court proceeding even where the PTO loses in the district court on the administrative record alone and no new evidence is admitted or considered. In this circumstance, there is little reason to saddle the unsuccessful applicant with the PTO’s expenses. A second anomalous result is that the statute invites forum shopping. By allowing an action to be filed in a district court in lieu of an appeal to the Court of Appeals for the Federal Circuit, the statute invites an unsuccessful applicant to pick a district court in a favorable circuit because the appeal will be to the circuit in which the district court sits, not to the Court of Appeals to the Federal Circuit.”

Practice Tip #4: When determining whether to use market rates or actual attorney-fee expenses in fee-shifting cases, the Seventh Circuit has reached a conclusion similar to the decision in this case. The Seventh Circuit has determined, for example, that it is incorrect to use the prevailing market rate to determine an award of attorneys’ fees under 28 U.S.C. § 1447(c) because the statute limited fee awards to “actual expenses, including attorney’s fees, incurred.” See Wisconsin v. Hotline Indus., Inc., 236 F.3d 363, 367 (7th Cir. 2000).

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Indianapolis, Indiana — The Southern District of Indiana has granted a motion by New York-based Broadcast Music, Inc. et al. for summary judgment against Diamond Investments, Inc. and Salvatore Mazza of Franklin, Indiana for copyright infringement for the unlicensed use of copyrighted musical compositions in live performances at The Juke Box Live.

Thumbnail image for Thumbnail image for Thumbnail image for BMILogo.JPGBroadcast Music, Inc. (“BMI”) is a “performing rights society” under 17 U.S.C. § 101 that operates on a non-profit-making basis and licenses the right to publicly perform copyrighted musical works on behalf of the copyright owners of these works.  The other plaintiffs in this action are the copyright owners of the eight compositions at issue in this lawsuit.

Diamond Investments, Inc. (“Diamond”) is an Indiana corporation that operated The Juke Box Live, a “nightclub restaurant entertainment venue.” Musical compositions were publicly performed at The Juke Box Live in connection with Diamond’s operation of that business. 

Salvatore T. Mazza (“Mazza”) was an officer of Diamond with primary responsibility for the operation and management of Diamond and The Juke Box Live. Mazza also had a direct financial interest in the corporation and The Juke Box Live.

Prior to February 2010, BMI learned that The Juke Box Live was offering musical entertainment without a license from BMI and without permission from the copyright owners whose music was being publicly performed. Between February 4, 2010 and May 31, 2011, BMI repeatedly informed Diamond and Mazza (collectively, “defendants”) in writing of the need to obtain permission for public performances of copyrighted music and offered to enter into a license agreement with defendants, but they refused.  BMI also sent four letters instructing defendants to cease unauthorized public performances of BMI’s music and telephoned on 55 occasions to advise defendants of the need to enter into a license agreement.

Nonetheless, the infringement continued.  On March 19, 2011, a BMI investigator went to The Juke Box Live and recorded the performance of songs owned by the various non-BMI plaintiffs.  An action for copyright infringement of eight works performed at The Juke Box Live, brought pursuant to 17 U.S.C. § 101 et seq. (the “Copyright Act”), followed.

BMI later moved for summary judgment and the defendants, although represented by counsel, did not respond.  The court held that, due to their failure to answer or object to BMI’s requests for admissions, defendants were deemed to have tacitly admitted to copyright infringement. 

The court awarded $3,000.00 for each of the eight findings of infringement in this case, for $24,000.00 in total, for the infringement itself.  It also found that the infringement had been willful and consequently awarded to the plaintiffs $17,985.55, to cover in full plaintiff’s costs and attorney’s fees.  The court also ordered that post-judgment interest be paid.  These damages and costs were assessed against Diamond and Mazza jointly and severally.

Finally, the court ordered that Diamond and Mazza, each individually, as well as all persons acting under their permission or authority, be permanently enjoined from infringing the copyrighted musical compositions licensed by BMI.

Practice Tip:

The Copyright Act empowers a plaintiff to elect to receive an award of statutory damages between $750 and $30,000 per infringement in lieu of an award representing the plaintiffs’ actual damages and/or the defendants’ profits.  In a case where the copyright owner proves that infringement was committed willfully, the court may increase the award of statutory damages to as much as $150,000 per infringed work.  A finding of willful infringement will also support an award of attorney’s fees. 

Here, the court awarded $3,000 per infringement plus attorney’s fees.  Courts considering awards of statutory damages have recognized that awards in the range of $3,000 to $7,000 or higher per infringement are appropriate in cases where the infringement resulted from deliberate indifference toward copyright laws.

Furthermore, not only is the performer liable for infringement, but so is anyone who sponsors the performance.  A corporate officer will be found jointly and severally liable with his corporation for copyright infringement if he (1) had the right and ability to supervise the infringing activity, and (2) has a direct financial interest in such activities.

 

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Indianapolis IN. Lawyers representing the defendant, Loparex, LLC were awarded their attorneys’ fees in a trade secret infringement case filed against it by MPI Release, LLC. Loparex had previously filed a trade secret case in Illinois against one defendant, Mr. Kerber. However, when Loparex sought a temporary restraining order in the case, the Illinois judge told Loparex that “I don’t think you have identified protectable trade secrets.This is a very broad list of claimed secrets, supposedly, that I think largely are under the umbrella of skill that he has developed having worked in this industry for such a long time.” Thumbnail image for Thumbnail image for Loparex.JPGShortly after that hearing, Loparex dismissed the Illinois suit and then filed a new suit in Indiana, which added defendant, MPI Release and another person as a defendant.

When Loparex sought a preliminary injunction in the Indiana case, the Court commented stating, “You brought this lawsuit and have the burden of proof, and you have a particularized burden here with a request for a preliminary injunction to show that specific trade secrets were misappropriated.” Following this comment, Loparex withdrew its motion citing its inability to establish “actual misappropriation”, despite “substantial discovery.” The Court later granted a summary judgment in favor of the defendants, and the defendant MPI sought to recover its attorneys’ fees.

The Court found that MPI was entitled to recover its attorneys’ fees under the Illinois Uniform Trade Secrets Act because the claim had been made “in bad faith.” In addition, the defendants separately sought attorneys’ fees under 28 USC § 1927, which allows an award of attorneys’ fees against an attorney “who so multiplies the proceedings in any case unreasonably and vexatiously.” M.JPGThe Court found the case suitable for an award of attorneys’ fees under 28 USC § 1927. Significantly, the Court held one of Loparex’s attorneys personally liable for MPI’s attorneys’ fees, stating, “He could and should have intervened when MPI sought a take-no-prisoners litigation strategy. As an enabler of the client’s unreasonable litigation desires, he becomes personally liable for them too.” Accordingly, Loparex’s attorney was found liable for MPI defendant’s attorneys’ fees, $475,332.70.

Practice Tip:

This ruling is significant because it is rare for a Court to award sanctions under 28 USC § 1927. It appears the Court found it significant that plaintiff asserted the claims even though it had dismissed the same claim filed previously in an Illinois court. Loparex also sought to avoid sanctions under 28 USC § 1927 by arguing that the defense counsel had alleged unclean hands, namely “unreasonably aggressive litigation from the other side.” The Court did not consider that argument, rejecting “and if you can do it, I can do it too” attitude towards litigation misconduct. The Court instead stated that the plaintiff, Loparex, or its attorney, Mr. Pautsch, should have filed a § 1927 motion against defense counsel when it established unreasonable behavior on defense counsel’s part.

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Fort Wayne; IN – The Northern District of Indiana has granted a partial summary judgment for Forks RV of Shipshewana, Indiana that dismisses copyright infringement claims in a dispute over a recreational vehicle sales agreement and design. Copyright attorneys for Amy and James Ortega had filed a lawsuit against Forks RV of Shipshewana, Indiana alleging that Fork breached a sales distribution agreement and also alleged copyright infringement over Fork’s use of Ortega’s designs for a custom RV. The court summarily dismissed the copyright infringement claim because Ortega had not registered his designs with the U.S. Copyright Office. The court noted “The Copyright Act states that “no civil action for infringement of the copyright in any United States work shall be instituted until preregistration or registration of the copyright claim has been made in accordance with this title.” 17 U.S.C. § 411(a).

The court, however, denied summary judgment on the breach of contract claim relating to the distribution and/or sales agreement. The court found that there was a genuine dispute of material fact, and therefore, summary judgment would be inappropriate.

Practice Tip: Copyright attorneys for Fork had requested attorney’s fees in defending the copyright infringement claim. The court granted this request, noting that . There is a strong presumption that the “prevailing party” in a copyright infringement case is entitled to recover attorney’s fees in the 7th Circuit, and that a copyright registration must be obtained before pursing an infringement claim (in most instances). Thus, plaintiffs must take care to register their copyrights before filing a copyright infringement suit, at the peril of being liable for the defendant’s attorney’s fees.

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Indianapolis, IN – An appeal is now pending of Judge Tanya Walton Pratt of the Southern District of Indiana‘s grant of a motion to dismiss in a qui tam patent false marking case. Intellectual property attorneys for David O’Neill, Promote Innovation LLC of Clarendon Hills, Illinois had filed a patent infringement lawsuit alleging that Roche Diagnostics of Indianapolis, Indiana, was marking its ACCU-CHEK® Accu-Chek.jpgproduct packages with patents that were expired. The case was filed qui tam. The ACCU-CHEK® product line is diabetes blood glucose monitoring kits. The following expired patents alleged to wrongfully appear on the packaging of various products: 4,891,319 Protection of proteins and the like, 4,924,879 Blood lancet device and 4,999,582 Biosensor electrode excitation circuit, which have been issued by the US Patent Office. This was originally filed in the Northern District of Illinois and was transferred to the Southern District of Indiana in July of 2010. Indiana Intellectual Property Law and News blogged about the case here: O’Neill Sues Roche Diagnostics for False Patent Marking.

In June, Judge Pratt granted Roche’s motion to dismiss. Judge Pratt found that the complaint failed to allege patent false marking as a matter of law. The court found that the plaintiff failed to allege intent to deceive, which must be specifically plead and supported by factual allegations. The Court found the allegations of deceptive intent were similar to those in the Federal Circuit Court recent opinion, In re BPLubricants USA Inc., – F.3d -, 2011 WL 873147 (Fed. Cir. March 15, 2011) which had failed as a matter of law in that case. Therefore, the Court dismissed the case with prejudice.

The plaintiffs have filed an appeal. In addition, Roche had requested an award of costs of defending the action. In August, Judge Pratt awarded Roche $10,040.09 in costs. The plaintiffs have filed challenges to this award in the district court, and Magistrate Baker is currently reviewing this award.

Practice Tip: This appeal may present one of the first opportunities for the Federal Circuit Court of Appeals to invoke the patent reform legislation that was passed and signed earlier this year. The new law is expected to result in the immediate dismissal of most patent false marking cases.
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Washington, DC – A recent decision in the Federal Circuit Court of Appeals in a legal malpractice claim involving a patent issue may have an impact on a recently filed Indiana case alleging patent attorneys committed legal malpractice, which was filed by Purdue Research Foundation late last month.

In Byrne v. Wood, Herron & Evans LLP, the Federal Circuit Court of Appeals CAFC Logo.jpgvacated a summary judgment in favor of the law firm Wood, Herron & Evans, and remanded to the lower court for further proceedings. The plaintiff sued the law firm for legal malpractice for failing to secure a patent that was broad enough to secure his invention of a grass and weed trimmer. The plaintiff claimed that due to the law firm’s failure, he later lost a patent infringement lawsuit against Black & Decker. The court below granted summary judgment for the law firm, based in part on its decision that Mr. Byre was not an expert witness.

The appellate court also briefly took on the question of whether the federal courts have jurisdiction to hear legal malpractice claims, typically arising out of state law, when a patent issue is intertwined. The Court, citing Davis v. Brouse McDowell, L.P.A., 596 F.3d 1355 (Fed. Cir. 2010), confirmed that it did have jurisdiction over this case. However, the court acknowledged that other courts had disagreed.

The opinion is designated “non-precedential.” This was an appeal from the Eastern District of Kentucky.

Practice Tip: The basis of the legal malpractice claims in the Purdue case are substantially different that here, however, this case confirms that in most situations involving a patent issue is appropriate for the federal courts to hear legal malpractice cases.
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