Indiana Intellectual Property Law News

June 13, 2013

Bruce Lee’s Daughter Sues Regarding 1965 Bruce Lee Screen Test

Indianapolis, Ind. — Copyright lawyers for LeeWay Media Group, LLC of Los Angeles, Calif. filed a declaratory judgment suit against Laurence Joachim of New York, N.Y. and Los Angeles, Calif. and Trans-National Film Corporation of New York in a copyright dispute over the use of portions of Bruce Lee’s 1965 screen test in the 2012 documentary “I Am Bruce Lee.”

Bruce Lee, widely considered to have been one of the most influential martial artists of all time, was also an actor and filmmaker. He is most famous for his roles in the films The Big Boss (1971), Fist of Fury (1972), Way of the Dragon (1972), Enter the Dragon (1973) and The Game of Death (1978). Lee was the first celebrity to be cast in major motion pictures after his death.

Lee completed his first Hollywood screen test in or about 1965. It is over eight minutes long and, according to LeeWay Media, has been used freely in many productions over the intervening decades. It is allegedly available for viewing on such sites as youtube.com.

A documentary about Lee entitled I Am Bruce Lee was produced by LeeWay Media, a company founded by Lee’s daughter Shannon Lee. It was released and aired on Spike TV in early 2012. Approximately 91 seconds of the 1965 screen test were included in the documentary. Prior to including the material from the screen test, LeeWay Media searched to determine whether the screen test was copyrighted. It concluded that the material was in the public domain.

LeeWay Media was contacted in July 2012 by Joachim, who claimed to own the copyright to the screen-test footage. He asserted that his copyright had been infringed. Negotiations ensued, but the dispute was not resolved. Among other issues, LeeWay Media asserted that it had requested but not received any relevant copyright-ownership documentation from Joachim.

In May 2013, Joachim informed LeeWay Media that, unless a six-figure settlement fee was paid, he would sue for violations of federal copyright law; federal law for unfair competition; and Indiana and California state law for unfair competition. LeeWay Media instead filed suit against Joachim and Trans-National Film under the Declaratory Judgment Act, asking the court to declare, inter alia, that LeeWay had not committed copyright infringement.

The complaint asks the court for the following:

· Declaration of No Valid Copyright

· Declaration of No Standing

· Declaration of No Copyright Infringement

· Declaration of No Unfair Competition

LeeWay Media also asks for attorneys’ fees and costs; and for a declaration that the claim of copyright infringement and unfair competition are in bad faith and, as such, should be sanctioned.

Practice Tip: In 1994, the Supreme Court addressed the issue of fee shifting in copyright cases in Fogerty v. Fantasy, Inc. Since then, the federal circuit courts have taken a variety of approaches to Fogerty and its statutory underpinning, 17 U.S.C. § 505. The Seventh Circuit is among the most willing of the circuits to shift fees, stating in Riviera Distributors, Inc. v. Jones, “Since Fogerty we have held that the prevailing party in copyright litigation is presumptively entitled to reimbursement of its attorneys’ fees.” This, perhaps, provides some insight into the rationale for a California plaintiff to sue citizens of California and New York in an Indiana court.

June 12, 2013

Eli Lilly Sues Perrigo for Patent Infringement of Axiron

By Overhauser Law Offices, LLC

Indianapolis, Ind. — Patent lawyers for Eli Lilly & Co. of Indianapolis, Ind. (“Lilly”), Eli Lilly Export S.A., of Vernier/Geneva, Switzerland (a wholly owned subsidiary of Eli Lilly & Co.) and Acrux DDS Pty Ltd. of West Melbourne, Victoria, Australia (“Acrux”) filed a patent infringement suit alleging that Perrigo Company of Allegan, Mich. (“Perrigo Company”) and Perrigo Israel Pharmaceuticals Ltd. of Bnei Brak, Israel (“Perrigo Israel,” a wholly owned subsidiary of Perrigo Company), infringed Patent Nos. 8,435,944; 8,419,307; and 8,177,449, filed with the U.S. Patent Office.

Lilly is engaged in the business of research, development, manufacture and sale of pharmaceutical products. Acrux is engaged in the development and commercialization of pharmaceutical products for sale. Both sell their products worldwide.

Perrigo Company and Perrigo Israel (collectively, “Perrigo”) are pharmaceutical companies that develop, manufacture, market and distribute generic pharmaceutical products for sale throughout the United States. These products include pharmaceuticals, infant formulas, nutritional products, dietary supplements and active pharmaceutical ingredients. Perrigo’s consumer-healthcare segment includes over 2,100 store-brand products which are marketed to major national chains such as Wal-Mart, CVS, Walgreens, Sam’s Club and Costco. They also sell to major drug wholesalers.

Lilly is the holder of approved New Drug Application No. 022504 for the manufacture and sale of a transdermal testosterone solution made at a concentration of 30 mg/1.5L, which is marketed by Lilly under the trade name “Axiron.” Axiron is a pharmaceutical drug which raises the amount of testosterone in a patient’s body. Recent sales of Axiron are estimated to be $229 million annually, according to Symphony Health Solutions. Axiron is subject to Patent Nos. 8,435,944, 8,419,307, 8,177,449 (the “‘944 patent,” the “‘307 patent,” and the “‘449” patent, respectively). All three patents have been licensed to Lilly.

Perrigo announced on May 29, 2013 that it had filed an Abbreviated New Drug Application (“ANDA”) with the U.S. Food and Drug Administration (“FDA”) for approval of a generic version of Axiron. Prior to filing the ANDA, No. 204255, Perrigo sent a letter to Lilly to inform Lilly that “in Perrigo’s opinion and to the best of its knowledge, the ‘449 patent is invalid, unenforceable, and/or will not be infringed by the commercial manufacture, use, sale, or importation of the drug product described in Perrigo’s ANDA.” Perrigo sent similar letters regarding the ‘307 and ‘944 patents.

After receiving the letter, Lilly filed suit alleging infringement of the three patents. It states in its complaint that the ‘944 patent claims, inter alia, methods of increasing the testosterone blood level of an adult male by applying a transdermal drug-delivery composition that contains testosterone. The ‘307 patent includes in its claims a method of increasing the level of testosterone in the blood by applying a liquid pharmaceutical that contains testosterone. The claims for the ‘449 patent include a method of transdermal administration of a physiologically active agent. All three patents are used in connection with Axiron.

Lilly’s complaint lists the following claims:

· Count I for Patent Infringement (Direct Infringement of U.S. Patent No. 8,435,944)

· Count II for Patent Infringement (Inducement to Infringe U.S. Patent No. 8,435,944)

· Count III for Patent Infringement (Contributory Infringement of U.S. Patent No. 8,435,944)

· Count IV for Patent Infringement (Direct Infringement of U.S. Patent No. 8,419,307)

· Count V for Patent Infringement (Inducement to Infringe U.S. Patent No. 8,419,307)

· Count VI for Patent Infringement (Contributory Infringement of U.S. Patent No. 8,419,307)

· Count VII for Patent Infringement (Direct Infringement of U.S. Patent No. 8,177,449)

· Count VIII for Patent Infringement (Inducement to Infringe U.S. Patent No. 8,177,449)

· Count IX for Patent Infringement (Contributory Infringement of U.S. Patent No. 8,177,449)

· Count X for Declaratory Judgment (Infringement of U.S. Patent No. 8,435,944)

· Count XI for Declaratory Judgment (Infringement of U.S. Patent No. 8,419,307)

· Count XII for Declaratory Judgment (Infringement of U.S. Patent No. 8,177,449)

Lilly’s lawsuit asks for an injunction to stop Perrigo from producing the generic version of Axiron until the expiration of Lilly’s three patents-in-suit. In addition, Lilly asks that the court declare the three patents to be valid and enforceable; that Perrigo infringed upon all three by, inter alia, submitting ANDA No. 204255 to obtain approval to commercially manufacture, use, offer for sale, sell or import its generic version of the drug into the United States; that Perrigo’s threatened acts constitute infringement of the three patents; that FDA approval of Perrigo’s generic drug be effective no sooner than the expiration date of the patent that expires last; that this is an exceptional case; and for costs and attorneys’ fees.

Practice Tip: 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 issues with respect to the period of exclusivity. For an interesting look at some of these issues, see here.
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June 10, 2013

Patent Trolls – A Growing Problem Receives National Attention

By Overhauser Law Offices, LLC

Litigation by patent-assertion entities (“PAEs,” commonly known as “patent trolls”) has skyrocketed in the last two years. A chart released by the White House in a June 2013 report entitled “Patent Assertion and U.S. Innovation” demonstrates that such trolls now file over 60% of all patent-infringement lawsuits. (The red portion of the bars shows patent lawsuits brought by PAEs.)

The patent-trolling business model includes no productive operations. Instead, investors’ money is used to purchase patents for the sole purpose of alleging infringement and extracting payment under the threat of litigation. Because litigation can be very costly, the patent trolls’ targets face a difficult decision: settle (typically by buying a license from the troll) or pay significant litigation expenses — and face the potential of losing at trial, which is somewhat unlikely but where damages can be enormous. In contrast, the trolls often use contingency-fee attorneys and, thus, have little more at stake in any given lawsuit than a few hundred dollars for a court-filing fee.

Many view this type of litigation with suspicion, if not outright derision. At least four patent-reform bills are pending in Congress and the Obama Administration recently released a harsh indictment detailing the damage to innovation and the economy caused by the “abusive practices in litigation” committed by patent trolls. Various measures to curb frivolous patent litigation have been suggested, including increasing transparency of patent ownership and establishing a website through the U.S. Patent and Trademark Office to inform patent-troll victims of their rights.

June 7, 2013

CordaRoy’s Originals Sues Lovesac for Infringement of Patented Bag-Bed Assembly

By Overhauser Law Offices, LLC

Evansville, Ind. — CordaRoy’s Originals, Inc. of Gainesville, Fla. (“CordaRoy’s”) has sued The Lovesac Corporation of Stamford, Conn. (“Lovesac”) alleging infringement of Patent No. 7,131,157, “Bag Bed Assembly,” (the “‘157 Patent”) which has been issued by the U.S. Patent Office.

Patent lawyers for CordaRoy’s filed a patent infringement suit alleging that Lovesac has been and continues to infringe on CordaRoy’s ‘157 Patent for a bag-bed assembly by using, selling, offering to sell, and/or importing a “knock-off” bag-bed assembly which embodies the patented invention. It is also alleged that Lovesac has induced others to do likewise. CordaRoy’s asserts that the claimed infringement has been, and continues to be, intentional, willful and deliberate.

In its complaint, CordaRoy’s asks for a judgment that the ‘157 Patent has been infringed; that Lovesac be required to account for all of its profits and advantages realized from the alleged infringement of the ‘157 Patent; for an award of lost profits and a reasonable royalty; for an award of treble damages upon a finding of willful, intentional, and deliberate infringement; for an injunction against further actions of infringement; for pre-judgment interest; and for costs and attorney’s fees.

A jury trial has been demanded.

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.

June 6, 2013

Southern District of Indiana Dismisses Declaratory Judgment Suit

By Overhauser Law Offices, LLC

Indianapolis, Ind. — The Southern District of Indiana has dismissed a declaratory judgment suit filed by ZPS America, LLC of Marion County, Ind. (“ZPS”) holding that it was an impermissible attempt to secure its preferred forum in anticipation of litigation that Hammond Enterprises, Inc. of Pittsburg, Calif. (“Hammond”) had promised to initiate imminently.

ZPS manufactures the Mori-Say TMZ 642 CNC machine (“TMZ machine”), a high-precision lathe that can be configured to manufacture various precision parts. In early 2009, after discussing its requirements, Hammond purchased two TMZ machines from ZPS. Accounts vary regarding whether the TMZ machines ever performed as had been promised. Attempts were made by the parties and their attorneys to resolve the issues with the machines but settlement discussions broke down in June 2012.

On June 4, 2012, Hammond’s lawyer sent ZPS a letter stating that the machines had been misrepresented and that Hammond was only interested in “hearing back from you…that ZPS is prepared to make arrangements to accept the return of both machines. If we do not hear from you by Friday, June 15 [2012], that you are prepared to accept their return, we have been authorized to file a lawsuit against ZPS and will proceed to do so.”

On June 14, 2012, one day before the deadline in Hammond’s letter, ZPS filed suit against Hammond in Marion Circuit Court, an Indiana state court. Its complaint was for damages and declaratory judgment. It asked that the court declare that Hammond had accepted the machines and was not entitled to revoke that acceptance; its damages claim arose from nonpayment by Hammond of amounts due for filter systems that had been purchased for the TMZ machines. Notice of that suit was served on June 26, 2012.

On July 10, 2012, Hammond filed a lawsuit against ZPS in the Northern District of California, seeking damages based on claims for negligent misrepresentation, revocation of acceptance, breach of contract, breach of express warranty, and breach of implied warranty. On July 12, 2012, Hammond served ZPS with a summons and complaint. On that same day, Hammond removed the action filed by ZPS in state court to the Southern District of Indiana, asserting diversity jurisdiction.

Hammond argued to the Indiana federal court that it should exercise its discretion to dismiss the complaint on the grounds that ZPS “raced to the courthouse” to deprive Hammond, the “natural plaintiff,” of the forum of its choosing.

The Indiana federal court held that ZPS’ declaratory judgment action was impermissible, as it had been filed in anticipation of litigation, beating Hammond to the courthouse by filing the day before the deadline to settle that had been set by Hammond. The court further held that the additional state-law claim for breach of contract that ZPS had asserted did not secure a place for it in the Indiana court.

The court cited three reasons for its decision: (1) the fact that a plaintiff filed a declaratory judgment action first does not give it a right to choose the forum; (2) the plaintiff’s additional claims for affirmative or coercive relief may be filed as counterclaims in the second-filed action; and (3) the plaintiff should not be rewarded for filing a declaratory judgment action as a pre-emptive strike. The court declined to exercise jurisdiction over the matter and dismissed the case without prejudice.

Practice Tip:

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.

The Declaratory Judgment Act provides that “any court of the United States, upon the filing of an appropriate pleading, may declare the rights and other legal relations of any interested party seeking such declaration, whether or not further relief is or could be sought.” A federal district court may, in its discretion, decline to hear a case brought under the Act, even if the court has subject matter jurisdiction.

In general, if two actions are pending in two different courts that concern the same general claims, the case filed first takes priority. However, the Seventh Circuit has never adhered to a rigid first-to-file rule. In addition, courts generally give priority to the coercive action (such as an action for damages or an injunction) over the declaratory judgment action, regardless of which case was filed first.

Courts also depart from the first-to-file rule if, as was true in this case, the declaratory judgment action is filed in anticipation of litigation by the other party. Here, rather than responding to Hammond regarding its letter, which contained a plain declaration of intent to file suit with a deadline for a response, ZPS filed suit. Only after securing a favorable forum did ZPS offer to negotiate a settlement. It was this conduct that the court held justified a dismissal of the declaratory judgment action as an improper anticipatory filing.

June 4, 2013

169 Trademark Registrations Issued to Indiana Companies in May, 2013

By Overhauser Law Offices, LLC

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

	Reg. Number	Mark	Click to View
1	4332704	IRIS	View
2	4342755	INTERACTION MOBILIZER	View
3	4344545	IDREADER	View
4	4342700	JOIN THE ASSASSIN NATION	View
5	4342671	RALSTON’S DRAFTHOUSE	View
6	4342670		View
7	4342628	WHERE DATA MEETS DESIGN	View
8	4342547		View
9	4342402	AIR DRIVE	View
10	4342246	ROCKREVOLT	View

June 3, 2013

Patent Office Issues 121 Patents To Indiana Citizens in May, 2013

By Overhauser Law Offices, LLC

The US Patent Office issued the following 121 patent registrations to persons and businesses in Indiana in May, 2013, based on applications filed by Indiana Patent Attorneys:

	PAT. NO.	Title
1	D683,434	Faucet body
2	D683,432	Faucet
3	D683,431	Faucet
4	D683,430	Faucet
5	D683,429	Faucet cover
6	D683,428	Faucet
7	D683,350	Necklace web key
8	8,452,953	Insulin pump programming software for selectively modifying configuration data
9	8,452,570	Systems and apparatuses for testing blood glucose measurement engines
10	8,452,545	Method and system for determining the difference between pre-prandial and post-prandial blood glucose values

May 29, 2013

Dan’s Comp Sues Ian Smith for Trademark Infringement in Facebook Advertisement

By Overhauser Law Offices, LLC

Evansville, Ind. — Trademark lawyers for XP Innovation, LLC d/b/a Dan’s Comp (“Dan’s Comp”) of Mt. Vernon, Ind. sued Ian Smith (“Smith”) of Massillon, Ohio alleging that he infringed various trademarks owned by Dan’s Comp, Registration Nos. 2,176,911, 2,176,580, 2,607,447, 3,853,112, 3,940,083, 3,957,948, 4,074,705 and 4,101,708, which have been registered with the U.S. Trademark Office.

Dan’s Comp owns and operates one of the world’s largest BMX bicycle stores. It also owns related trademarks registered in connection with sales of bicycles and bicycle-related goods. These marks include “Dan’s,” “Dan’s Competition,” “Dan’s BMX” and “high speed mail order.” Dan’s Comp also owns trademarks to “Dan’s Comp” with a lightning-bolt graphic and to the same lightning-bolt graphic and a similar lightning-bolt graphic as separate marks.

In its complaint, Dan’s Comp alleged that it uses its marks in connection with bicycles and bicycle-related goods and services in all fifty states, the District of Columbia, and throughout the world. It further claimed that it spends tens of thousands of dollars each year to advertise and promote the Dan’s Comp marks and the associated goods and services in the United States and throughout the world. It asserts that, as a result of its use of the Dan’s Comp marks, the marks have developed significant goodwill in the market.

This lawsuit pertains to an advertisement that Dan’s Comp claims that Smith placed on Facebook.com. The advertisement read “Free Bike From Dans [sic] Comp.” Users who clicked on the advertisement were redirected to a survey website, which was alleged to have been designed to appear as if it were affiliated with Dan’s Comp through the unauthorized use of the Dan’s Comp marks. Users were prompted to answer survey questions regarding their buying habits in relation to Dan’s Comp goods and services.

At the conclusion of the survey, users were prompted to enter their email addresses and mobile phone numbers. Immediately afterward, a text message containing an “offer” was sent to each user’s mobile number. Various offers included an “Amazing Facts Mobile Alert” for $9.99 per month and a membership to the “Mobile Tunez Club,” also for $9.99 per month. The text message also included a PIN number that was to be entered on the website addressed “http://surveysallday.com/bmx/winner.php” in a box on a page entitled “SCORE YOUR BIKE.” Apparently, entry of the four-digit pin would register the user for the service described in the text message. It is further claimed that no free bicycles were provided to any users. Allegedly, thousands of individuals entered their personal information on the survey website.

May 28, 2013

Patent Office Finalizes “After Consideration” Pilot Rules

By Overhauser Law Offices, LLC

Washington, D.C. — Indiana inventors can now take advantage of new Patent Office procedure by having their patent attorneys file the appropriate paperwork. The USPTO launched the After Final Consideration Pilot 2.0 (AFCP 2.0) on May 19, 2013. Designed to be more efficient and effective than the AFCP, AFCP 2.0 is part of the USPTO’s on-going efforts towards compact prosecution and increased collaboration between examiners and stakeholders.

“Compact prosecution remains one of our top goals,” said Teresa Stanek Rea, Acting Under Secretary of Commerce for Intellectual Property and Acting Director of the USPTO. “As with the original AFCP pilot, the new AFCP 2.0 pilot allows additional flexibility for applicants and examiners to work together and provides even greater opportunity for communication after final than the original pilot.”

Like AFCP, AFCP 2.0 authorizes additional time for examiners to search and/or consider responses after final rejection. Under AFCP 2.0, examiners will also use the additional time to schedule and conduct an interview to discuss the results of their search and/or consideration with you, if your response does not place the application in condition for allowance. In this way, you will benefit from the additional search and consideration afforded by the pilot, even when the results do not lead to allowance.

In addition, the procedure for obtaining consideration under AFCP 2.0 has been revised. The revised procedure focuses the pilot on review of proposed claim amendments and allows the USPTO to better evaluate the pilot.

To be eligible for consideration under AFCP 2.0, Indiana patent applicants must file a response under 37 CFR §1.116, which includes a request for consideration under the pilot (Form PTO/SB/434) and an amendment to at least one independent claim that does not broaden the scope of the independent claim in any aspect. A notice published in the Federal Register at 78 Fed. Reg. 29117 has a complete description of how to request consideration under AFCP 2.0. As was the case with the AFCP, examiners will continue to use their professional judgment to decide whether the response can be fully considered under AFCP 2.0. This will include determining whether any additional search is required and can be completed within the allotted time, in order to determine whether the application can be allowed.

May 24, 2013

Automated Products Sues Norco for Infringement of Patented Roof-Support Rafters

By Overhauser Law Offices, LLC

South Bend, Ind. – Patent lawyers for Automated Products International, LLC (“API”) of LaGrange, Ind. sued alleging that Norco Industries, Inc. (“Norco”) of Elkhart, Ind. infringed Patent No. 7,134,711 (the “‘711 Patent”) which has been issued by the U.S. Patent Office.

The ‘711 Patent is directed to recreational-vehicle roof-support rafters. API alleges that Norco has been and is currently infringing the patent. API also asserts that through continuous marking of its products, it has provided “constructive notice of [Norco’s] infringement.”

API seeks a judgment declaring that Norco has infringed the ‘711 Patent; damages equal to at least a reasonable royalty; treble damages upon a finding of willful and deliberate infringement; attorneys’ fees upon a finding that the case is exceptional; and an injunction.

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.”
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