Injunction

April 3, 2013

Indiana Court of Appeals Affirms Preliminary Injunction Barring Tortious Interference by Former Employee

Indianapolis, Ind. – The Indiana Court of Appeals has affirmed the judgment of the Hamilton Circuit Court granting a preliminary injunction in favor of Classic Restaurant Services of Westfield, Ind. against former employee Christopher Snyder for tortious interference with business relationships.

Classic Restaurant Services, LLC (“Classic”) provides heating, air conditioning, refrigeration, and cooking equipment sales and service predominantly to restaurants throughout central Indiana. Christopher Snyder began working as a service technician for Classic in 2009. Snyder did not have a non-compete agreement with Classic and was expressly permitted to do residential jobs on the side while using his company vehicle. During his more than three years of employment, Snyder serviced all of Classic’s customers.

In the summer of 2011, Snyder began organizing his own competing business and planning to take customers from Classic. By July 2011, Snyder had succeeded in taking the business of two Subway restaurants from Classic. He serviced these restaurants after hours on his own behalf. Classic did not know that it had lost these customers to Snyder.

In the fall of 2011, Snyder unsuccessfully attempted to solicit Ruby Tuesday restaurants to transfer their business to him. Although he was still employed by Classic, Snyder had prepared to compete by purchasing and outfitting a van, obtaining business cards and insurance, and printing marketing flyers. He distributed his flyers to several restaurants in central Indiana and, in February 2012, organized his new company, A Plus Air LLC.

Snyder resigned from Classic in April 2012 but retained a binder that contained contact information of all Classic’s vendors and customers. This list was marked confidential and Classic employees had been directed on numerous occasions to keep its contents confidential. Snyder continued to use the list for his new business. He also obtained additional Classic documents from Doris Warswick, Classic’s office manager, who knew of Snyder’s intention start a competing business.

Classic sued, asking that Snyder be enjoined from “continuing to interfere with the relationships that Classic had with customers while he was employed” but agreed that Snyder should be otherwise free to compete in the local restaurant HVAC business. The Hamilton Circuit Court found that “while he was Classic’s employee and agent, Mr. Snyder engaged repeatedly in self-dealing and other acts of disloyalty to his employer and principal, thereby breaching his fiduciary duties to Classic.” It concluded that Classic had a reasonable likelihood of success on the merits on its claims for 1) tortious interference with Classic’s business relationships and 2) misappropriation of trade secrets and granted the injunction.

Snyder appealed. He did not dispute that he had actively violated his fiduciary duties to Classic during the last year of his employment but argued instead that this prior misconduct should not affect his ability to compete with Classic following the termination of his employment.

In a unanimous memorandum opinion, the appellate court upheld the injunction on the grounds of a likelihood of success on Classic’s tortious interference claim. It further held that Snyder’s claim that a preliminary injunction was improper because he no longer owed a fiduciary duty to Classic was entirely unsupported and without merit. The appellate court did not reach Snyder’s arguments against Classic’s trade-secret claim, as Classic’s tortious interference claim was sufficient to support the trial court’s grant of a preliminary injunction.

Practice Tip: As the appellate court stated: “An employee owes his employer a fiduciary duty of loyalty. To that end, an employee who plans to leave his current job and go into competition with his current employer must walk a fine line. Prior to his termination, an employee must refrain from actively and directly competing with his employer for customers and employees and must continue to exert his best efforts on behalf of his employer….” Further, although the employee’s fiduciary relationship with his employer ends upon the termination of his employment, he is not then “free to enjoy the fruits of his breach of fiduciary duties.”
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March 22, 2013

Royal Purple Sues Liqui Moly GmbH for Trademark Infringement for Selling Purple Lubricants

By Overhauser Law Offices, LLC

Indianapolis, IN – Trademark lawyers for Royal Purple, LLC of Indianapolis, Indiana sued Liqui Moly GmbH of Ulm, Germany in the Southern District of Indiana alleging trademark infringement for selling purple automotive lubricants.

At the center of this litigation is the right to use the color purple. Royal Purple claims it has sold lubricants for more than 20 years and has trademarked the color purple. It owns several federal trademark registrations for the color purple as applied to lubricating oils for automotive, industrial and household uses. Among the trademarks are U.S. Registration Nos. 2,691,774; 2,953,996 and 3,819,988 which cover the following:

It also owns multiple trademarks incorporating the word “purple” as applied to various goods. These trademarks are registered with the US 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 sells Liqui Moly and Lubra Moly brand motor oil, both of which have packaging that is supposedly purple prior to sale. Royal Purple alleges that Liqui Moly’s use of the color purple in conjunction with the sale of motor oil is likely confuse consumers. According to Liqui Moly’s website, its products are sold in a variety of different containers:

Royal Purple also alleges that Liqui Moly’s use is a purposeful attempt to trade upon Royal Purple’s trademark and 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, an unrelated third party.

The federal claims include trademark infringement, unfair competition and dilution under the Lanham Act; Royal Purple has also alleged dilution, trademark infringement, unfair competition and unjust enrichment under Indiana common law. Royal Purple seeks a preliminary and permanent injunction, the destruction of all allegedly infringing inventory, treble damages, costs and attorneys’ fees.

Practice Tip: 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.
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March 12, 2013

Ladder Manufacturer Ameriwood et al. Sue Wing Enterprises Alleging Infringement

By Overhauser Law Offices, LLC

Indianapolis, Ind. – Plaintiffs Cosco Management, Inc. (“Cosco”) and Dorel Juvenile Group, Inc. (“Dorel”) of Columbus, Ind. along with Ameriwood Industries, Inc. (“Ameriwood”) of Wright City, Mo. filed a patent infringement suit alleging Wing Enterprises, Inc. (“Wing”) and Wing Enterprises, Inc. d/b/a Little Giant Ladders (“Little Giant”) of Springville, Utah have been infringing and continue to infringe certain claims of Patent No. 6,427,805 (the “‘805 Patent”), entitled “Folding step stool,” which has been issued by the U.S. Patent Office.

The plaintiffs assert that the defendants’ Flip-N-Lite step ladder infringes upon various claims of its ‘805 patent. That patent was issued in 2002 and was initially assigned to Cosco. Cosco licensed the patent exclusively to Dorel which, in turn, assigned those exclusive rights to Ameriwood.

Plaintiffs state that both Wing and Little Giant, by their allegedly infringing activities, have caused Cosco, Dorel and Ameriwood irreparable harm for which there is no adequate remedy at law. Plaintiffs assert that this conduct has been willful.

Plaintiffs ask for a permanent injunction against activity found to infringe the ‘805 patent, an order directing the destruction of all equipment used in the alleged infringement, damages up to triple the amount of the actual damages, costs and reasonable attorneys’ fees.

Practice Tip: It is unclear why Wing Enterprises, Inc. is listed as a defendant twice – once as Wing Enterprises, Inc. and again as Little Giant Ladders, an assumed business name. Various jurisdictions have held that it is acceptable to sue under an assumed name. For example, under Texas case law, one can sue an individual under his real or assumed name if he has filed an assumed name certificate and conducts business under that assumed name. See Employees Loan Co. v. Templeton, 109 S.W.2d 774, 778 (Tex. Civ. App. 1937). However, listing one party twice, whether as a plaintiff or a defendant, is traditionally viewed as unnecessarily duplicative.

March 8, 2013

Continuation of At-Will Employment Held to be Adequate Consideration for Noncompetition Agreement

By Overhauser Law Offices, LLC

Indianapolis, IN – The Indiana Court of Appeals has reversed the decision of the Marion Superior Court to deny injunctive relief to Clark Sales & Service, Inc. (“Clark”) of Indianapolis, Indiana in its suit against John D. Smith (“Smith”) and Ferguson Enterprises, Inc. (“Ferguson”) of Newport News, Virginia.

In 1998, Smith began working for Clark, a company that sells and services appliances in the builder-distributor market in Indiana. In 2004, after one of its high-level managers left Clark for a competitive position at another company, Clark had Smith and various other employees sign a written employment agreement containing both a confidentiality clause and a noncompetition agreement.

Smith resigned his position at Clark on April 13, 2012 but, before doing so, he took copies of Clark’s sales records from 2010 and 2011, including customer and builder contact information, the price of materials sold and Clark’s costs and profit margins. On April 18, 2012, he accepted an offer of employment with Ferguson, a nearby competitor. In his new position, he solicited business from various Clark customers.

Attorneys for plaintiff Clark sued to enforce the confidentiality and noncompetition provisions of the agreement entered into with Smith. The trial court granted Clark’s non-disclosure request and ordered the confidential documents to be returned but it denied Clark’s request for an injunction to enforce the noncompetition portion of the employment agreement. The trial court noted that there had been no incentive for Smith to agree to the noncompetition provision in the form of, for example, the commencement of a new job or a pay raise. It held that, as a result, the noncompetition agreement failed for lack of consideration.

Clark filed an interlocutory appeal. In a memorandum decision, the Indiana Court of Appeals found that the trial court had abused its discretion by denying the injunction and reversed the decision. The appellate court held that Indiana law, as enunciated by the Indiana Supreme Court, was that an employer’s promise to continue an employee’s at-will employment was sufficient consideration to support the employee executing a new employment contract with a noncompetition agreement. No raise or other additional incentive was required.

The appellate court remanded the matter to the trial court for further proceedings regarding the reasonableness of the noncompetition agreement.

Practice Tip: Covenants not to compete are in restraint of trade and are not favored by the law. If a court applying Indiana law finds that portions of a noncompetition agreement are unreasonable, it may not modify the restrictions to make them reasonable. Doing so would subject the parties to an agreement they had not made. The court may, however, employ the “blue pencil” rule to “cross out” portions deemed unreasonable while leaving any separable and reasonable portions intact.

March 7, 2013

DirecTV Sues Roger York, Dianna York and Marty’s Pub for Use of Residential Satellite Service in a Commercial Establishment

By Overhauser Law Offices, LLC

Indianapolis, IN – Intellectual property lawyers for DirecTV, LLC sued Roger York, Dianna York and D.L.Y., Inc. d/b/a Marty’s Pub of Converse, IN alleging the commercial use of satellite programming sold at the residential rate.

This suit was brought under the Cable Communications Policy Act of 1984, 47 U.S.C. §521, et seq., and 47 U.S.C. §605. It alleges that Roger York and Dianna York, in their capacity as owners, and individuals with close control over internal operating procedures, of Marty’s Pub willfully and unlawfully used a residential subscription to DirecTV in a commercial establishment.

The three-count complaint cites three causes of action. Count One: Damages for Violations of Cable Communications Policy Act under 47 U.S.C. §605(e)(3)(c); Count Two: Damages for Violations of 18 U.S.C. §2511; and Count Three: Civil Conversion.

DirecTV asks for the following: a declaration that the defendants’ use of DirecTV was a violation of §2511, that such violations were willful and for the purpose of commercial advantage; an injunction against further violations; statutory damages under 18 U.S.C. §2511; statutory damages under 47 U.S.C. §605; punitive damages and costs and interest.

Practice Tip: As part of its complaint, DirecTV claims that its goodwill and reputation have been usurped. It will be interesting to see what evidence it offers as proof that, as a result of allegedly receiving a lower monthly fee for the programming provided to the defendants – a circumstance presumably known to few other than the Yorks – its goodwill or reputation have been impacted.

February 28, 2013

Eli Lilly Sues Accord Healthcare Again for Infringement of Patented ALIMTA

By Overhauser Law Offices, LLC

Indianapolis, IN – Eli Lilly and Company of Indianapolis, Indiana filed an additional patent infringement suit in the Southern District of Indiana alleging that Accord Healthcare, Inc., USA of Durham, North Carolina will infringe U.S. Patent No. 7,772,209 (the “‘209 patent”) which has been issued by the U.S. Patent Office if relief is not afforded by the court.

In a complaint that was almost identical to a previous complaint filed in January 2012, patent attorneys for Eli Lilly and Company (“Lilly”) initiated an additional lawsuit against Accord Healthcare, Inc., USA (“Accord”) for attempting to gain FDA approval to manufacture and sell a generic version of Lilly’s ALIMTA, a drug that is used in the treatment in certain types of lung cancer. ALIMTA is protected by the ‘209 patent.

This is the second suit by Lilly against Accord involving the ‘209 patent. This suit was initiated after Accord filed an Abbreviated New Drug Application (“ANDA”) with the FDA for a product that competes with Lilly’s ALIMTA, which is an “Antifolate Combination Therapies” product. The complaint from 2012 alleged intent to infringe by, among other activities, the production and sale of Accord’s “Pemetrexed Disodium for Injection,” a generic version of ALIMTA, in 100 mg/vial and 500 mg/vial products. The current complaint alleged intent to infringe with a “Pemetrexed Disodium for Injection” product in a 1000 mg/vial strength. As part of its ANDA filing, Accord alleged that the claims of the ‘209 patent are invalid and/or not infringed by Accord’s product.

Eli Lilly has sued alleging infringement of the patented ALIMTA before:

· Eli Lilly Sues Apotex Inc. for Patent Infringement of ALIMTA

· Eli Lilly and Company Sues Accord Healthcare for Patent Infringement of Lung Cancer Drug ALIMTA

· Lilly Wins Patent Infringement Suit Regarding Chemotherapy Drug

· Eli Lilly Company Sues APP Pharmaceuticals LLC for Patent Infringement of Chemotherapy Drug

Lilly seeks a judgment that Accord has infringed and/or will infringe, actively induce infringement of, and/or contribute to infringement by others of the ‘209 patent; a judgment ordering that Accord delay virtually all activities pertaining to its ANDA product until after the ‘209 patent has expired; a preliminary and permanent injunction against activity that infringes upon the ‘209 patent; a declaratory judgment of infringement; a declaration that the case is exceptional and an award of attorneys’ fees pursuant to such a declaration; and Lilly’s costs and expenses.

Practice Tip #1: The FDA’s ANDA process for generic drugs has been abbreviated such that, in general, the generic drug seeking approval does not require pre-clinical (animal and in vitro) testing. Instead, the process focuses on establishing that the product is bioequivalent to the “innovator” drug that has already undergone the full approval process. The statute that created the abbreviated process, however, had also created some interesting jurisdictional issues with respect to declaratory judgments. For an interesting look at some of the issues, see here.

June 26, 2012

Dillinger Sues Pour House on Lincoln for Trademark Infringement of PUBLIC ENEMY

By Overhauser Law Offices, LLC

Indianapolis; IN – Trademark attorneys for Dillinger, LLC of Mooresville, Indiana filed a complaint for injunctive relief and damages in alleging The Pour House on Lincoln, Inc. d/b/a Dillinger’s Chicago Bar & Grill, Inc. of Chicago, Illinois infringed trademark registration nos. 3,483,359 for the mark DILLINGER’S and no. 4,091,160 for the mark PUBLIC ENEMY which have been registered by the US Trademark Office.

Dillinger, LLC is owned and operated by Jeff Scalf and, according to the Complaint, is the descendant of gentleman bandit John Dillinger. Dillinger, LLC owns numerous trademark registrations for DILLINGER, JOHN DILLINGER, PUBLIC ENEMIES, and many other trademarks related to the life of John Dillinger. Dillinger, LLC is also the owner of all rights, title, and interest to both DILLINGER’S and PUBLIC ENEMIES and both marks have been used in interstate commerce in connection with restaurant and bar services as early as 2002. According to the Complaint, Dillinger, LLC has never authorized The Pour House on Lincoln d/b/a Dillinger’s Chicago Bar & Grill to use the DILLINGER or PUBLIC ENEMIES marks in any way and also alleges that in July 2010 it came to their attention that the Defendants were operating a restaurant using the DILLINGER and PUBLIC ENEMIES trademarks. Upon their knowledge of the trademark usage, Dillinger, LLC alleges that The Pour House was contacted about the infringement and in August of the same year they traveled to Indianapolis for the purpose of obtaining a license for the use of the trademarks. The Complaint states that an oral agreement was reached and reduced to writing, but never executed and yet The Pour House willfully continued its infringing usage of the DILLINGER and PUBLIC ENEMIES trademarks, specifically on their website, food and drink menus and the menus posted on the storefront. Dillinger, LLC asserts five counts for the violations of the defendants, including demand for preliminary and permanent injunction; federal trademark infringement; cybersquatting; false designation of origin, false descriptions and unfair competition; and dilution by blurring. In order to avoid any irreparable harm from the loss of reputation the DILLINGER names could suffer as a result of the unauthorized use of the trademarks and the accrual thereof, Dillinger, LLC is seeking to permanently enjoin The Pour House from using the DILLINGER and PUBLIC ENEMIES trademarks or inducing such belief, actual damages suffered as a result of the alleged trademark violations, statutory and exemplary damages, and the profits derived from the infringing activities.

Practice Tip: U.S.C. title 15, chapter 22 governs trademarks, and §1117 specifically details the relief which can be granted as a result of trademark violation.
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June 5, 2012

Trademark to Colt’s Luck Jersey? Recent Trademark Infringement Case over Tim Tebow Products Illustrates Issues

By Overhauser Law Offices, LLC

New York, NY – The Southern District of New York recently issued an injunction in a case involving the trademark rights to NFL player Tim Tebow’s name and jersey. Trademark attorneys for Nike, Inc of Beaverton, Oregon, had filed a Trademark infringement lawsuit in the Southern District of New York alleging that Reebok, International Ltd of Canton, Massachusetts infringed Tebow’s trademarks by producing and selling jerseys and other products bearing the Tebow marks. The complaint stated that Nike had an exclusive license to produce Tebow products bearing the Tebow marks. The complaint alleges that following the Denver Bronco’s trade of Tebow to the New York Jets, Reebok tried to take advantage of the high demand for Tebow’s Jets jersey by offering and selling unlicensed Tebow products.

On April 9, 2012, the court approved a final judgment that recognized Nike, Inc. was awarded the sole rights to the license–including the manufacture, distribution, and sale–of Tim Tebow merchandise, retroactive February 28, 2012, affiliated with the New York Jets. The court order defined Unauthorized Tebow Product as “an NFL-related jersey or t-shirt product sold or distributed by, manufactured by or for, or in the possession or control of Defendant Reebok International Ltd. . . . with the name Tebow affixed to the product after February 28, 2012.” The definition specifically targets any Tebow merchandise produced with his new team, the New York Jets. The terms of the court order issued prohibit Reebok from manufacturing, selling, donating, advertising or permitting any other individual or entity to do the an Unauthorized Tebow Product. Reebok was further ordered to repurchase or recall any existing Tebow merchandise already in distribution that was made after February 28, 2012.

Practice Tip: It will be interesting to see how valuable the trademark rights to number one draft pick Andrew Luck‘s jersey and his new affiliation with the Indianapolis Colts will become. Nike argued that the Tebow trademark was particularly valuable because of his high profile. He was already a prize at Stanford, and with his contract with the Colts, the trademark rights could be very valuable.

May 10, 2012

Southern District Grants Preliminary Injunction for American Petroleum Institute in Trademark Infringement Suit Over API Logo

By Overhauser Law Offices, LLC

Indianapolis; IN – Judge Tanya Walton Pratt of the Southern District of Indiana has issued a preliminary injunction enjoining Tailor Made Oil Company of Cambridge City, Indiana, TM Oil, LLC of Fishers, Indiana, Circle Town Oil of Fishers, Indiana, et al from infringing trade names API and AMERICAN PETROLEUM INSTITUTE and trademark registration nos. 1,864,428, 1,868,779 and 1,872,999, which have been registered with the US Trademark Office by the American Petroleum Institute (API) of Washington, DC.

Trademark lawyers for American Petroleum Institute (“API”) of Washington, D.C. filed a trademark infringement suit in alleging Tailor Made Oil Co., LLC of Cambridge City, Indiana, TMO Oil, LLC of Fishers, Indiana, Circle Town Oil of Fishers, Indiana, William R. Selkirk and Rebecca Selkirk of Cambridge City, Indiana, Lincoln R. Schneider of Fishers, Indiana and Jafarikal Corporation of Rosedale, New York infringed trademark. The complaint alleges that the individual defendants own and operate the corporate defendants as an interrelated business that offers low quality engine oil for sale. In March 2010, Tailor Made obtained certification for its engine oil, and a one year license to use the starburst mark on its products. In order to renew the one year license, Tailor Made was required to report its sales and to pay a renewal fee to API. Tailor Made failed to comply with these requirements and has continued to sell products bearing the trademarked starburst without authorization. We blogged about the case when it was filed.

The court’s order states that the defendants did not contest API’s motion for preliminary injunction. The parties submitted a joint proposed order, but did not agree on all aspects of the proposed order. The injunction ordered by the court prevents the defendants from registering or using any infringing marks. It also requires that the Jafarikal Corporation must notify API of its intent to distribute engine oil bearing the API marks and allow API to test any engine oil it distributes bearing the API marks.

Practice Tip: The order ordered that the defendants submit an affidavit of compliance within 10 business days of the injunction.

October 20, 2011

Federal Circuit Court Grants Injunction in Patent Infringement Suit Over Windshield Wiper Blade Technology

By Overhauser Law Offices, LLC

Washington, D.C. — The Honorable Circuit Judges Kathleen O’Malley, Jimmie V. Reyna and William C. Bryson of the U.S. Court of Appeals for the Federal Circuit have issued a permanent injunction in a patent infringement lawsuit, overruling the denial of the injunction by the District Court of Delaware. Patent lawyers for Robert Bosch LLC of Farmington Hills, Michigan, who had filed a patent infringement lawsuit in the District Court of Delaware alleging that Pylon Manufacturing Corporation of Deerfield Beach, Florida, infringed patent no. 6,292,974 Glass wiper blade for motor vehicles, patent no. 6,675,434 Wiper blade for the glass surfaces of motor vehicles with an elongated, spring-elastic support element, and patent no. 6,978,512 Wiper blade for cleaning vehicle windows, which have been issued by the US Patent Office.

The technology at issue is a beam-type automobile windshield wiper blade that perform better than traditional windshield wipers. Pylon is a competitor windshield wiper blade manufacturer. Patent attorneys for Bosch filed this patent infringement lawsuit in 2008 in the District Court of Delaware. On March 31, 2010, the district court granted Pylon’s motion for summary judgment of noninfringement of the ‘512 patent, but denied summary judgment of noninfringement of the two other patents. The remaining issues were tried by jury, which found that claim 13 of the ‘974 and ‘434 patents had been infringed. Bosch then filed a motion for a permanent injunction. The district court denied the permanent injunction, and this ruling is the subject of the Federal Circuit court opinion today.

The Federal Circuit reversed the district court and issued the injunction. The court found that the district court made legal errors in applying the standard for a permanent injunction. The district court also erred in concluding that Bosch had not demonstrated an irreparable harm. Bosch introduced evidence of loss of market share and access to potential customers. The Federal Circuit found that this evidence did demonstrate an irreparable injury. Judge William C. Bryson dissented in part, stating he would have remanded the case to the district court to appropriately apply the correct standard.

Practice Tip: In this case, the Federal Circuit affirmed the standard for granting a permanent injunction in a patent infringement case. The patentee must make a four-part showing:

(1) that it has suffered an irreparable injury; (2) that remedies available at law, such as monetary damages, are inadequate to compensate for that injury; (3) that, considering the balance of hard-ships between the plaintiff and the defendant, a remedy in equity is warranted; and (4) that the public interest would not be disserved by a per-manent injunction.

eBay Inc. v. MercExchange, L.L.C., 547 U.S. 388, 391 (2006). Prior to the eBay case, an injunction normally would issue when there a finding that a patent is valid and has been infringed. However, the Federal Circuit Court’s opinion today seems to bolster the availability of injunctions when patent infringement has been found.