Posts in Circuit Courts of Appeal

In mag Fasteners, Inc. v. Fossil, Inc., Romag sued Fossil for patent and trademark infringement and a violation of the Connecticut Unfair Trade Practices Act (“CUTPA”) after one batch of Fossil’s handbags appeared to have counterfeit magnetic snaps. The jury found Fossil liable for patent and trademark infringement and for violating the CUTPA. The Federal Circuit affirmed the patent and trademark infringement verdicts. After that appeal, Romag sought attorney’s fees under the Patent Act, Lanham Act, and the CUTPA. The district court awarded attorney’s fees under all but the Lanham Act… The Supreme Court’s “objectively unreasonable” standard for attorney’s fees set forth in Octane applies to infringement cases under the Lanham Act and the Patent Act. In attorney’s fee disputes, courts must consider the totality of the circumstances, including the conduct of both parties.

The Ninth Circuit clarified the requirements for pleading and establishing a trademark infringement claim under a reverse confusion theory in Marketquest Group v. BIC, Case No. 15-55755 (9th Cir. July 7, 2017). The court relieved plaintiffs from having to specifically plead reverse confusion if it is compatible with the theory of infringement alleged in the complaint, and supported a more malleable standard for proving intent in reverse confusion cases. The court also held that good faith is an element—not just a factor—of a fair use defense, and that the fair use defense may only be raised after a likelihood of confusion is established. Marketquest further reinforces courts’ reluctance to decide trademark cases on summary judgment, and makes it more difficult for defendants to dispose of reverse confusion claims through pretrial motions. 

As Stone Creek deepens the divide among circuits, the issue of whether willfulness is required for disgorgement of a defendant’s profits in trademark cases is ripe for Supreme Court review… The Stone Creek decision solidifies the Ninth Circuit’s position that willfulness is required for a recovery of profits in trademark cases. This approach is consistent with equitable principles because disgorgement is generally used to deter culpable behavior and deterrence would not be necessary, and would not work, for an innocent infringer. Depending on the facts of a case, trademark law provides sufficient remedies to prevent a likelihood of confusion and compensate a plaintiff for its losses—beyond a defendant’s profits—like an injunction, actual damages and/or corrective advertising. An award of profits can be reserved for willful infringers, without depriving a plaintiff of remedies for non-willful infringement.

In mid-June, this case was overturned on appeal after a federal judge in the U.S. District Court for the District of Nevada (D. Nev.), entered a finding of judgement as a matter of law in favor of defendant DeVito’s fair use defense. As the judge noted, at most 145 creative words from the biography, constituting about 0.2 percent of the 68,500 words comprising that work, was the plaintiff’s basis for copyright infringement. “This factor strongly weighs in favor of a finding of fair use, at least where the ‘heart’ of the Work was not infringed,” the order reads. Further, the biographical nature of the work meant that uncopyrightable facts about DeVito’s life, and not the author’s writing style, comprised the heart of that work. As well, the 12 similarities between the biography and the musical accounted for 0.4 percent of the musical’s script and 0.2 percent of the running time, according to the recent court order.

The Ninth Circuit Court of Appeals ruled on May 16, 2017 that Google has not become a victim of its own success – that is, its Google trademark is still an enforceable brand for an online search engine and has not become generic.

Jenner & Block represented Parallel Networks for 18 months and then lost one of the cases on summary judgment of non-infringement. Four weeks after losing summary judgement, Jenner & Block decided the cases were no longer economically viable, refused to handle the appeal of the adverse summary judgment and advised Parallel Networks that it was terminating its representation in both cases. Parallel Networks retained new legal counsel for the appeal and these new lawyers undid Jenner & Block’s loss when the Federal Circuit vacated the summary judgement order of non-infringement and remanded the case back to Delaware. Parallel Networks eventually settled both cases, including an eight-figure settlement in one of those cases. Incredibly, more than two and a half years after Jenner & Block determined that these cases weren’t economically viable and then decided to abandon its client, Jenner & Block sent a demand letter to Parallel Networks claiming it was entitled to payment of $10.2 million in hourly fees based on the successful outcomes of the cases achieved by a different law firm.

The relationship between PTAB proceedings and parallel district court litigation may be altered significantly. The arguments in Wi-Fi One vs. Broadcom this week may change a lot about PTAB. In fact, the U.S. Court of Appeals for the Federal Circuit has announced that it will hear the question of whether certain decisions of the PTAB that are entered at the beginning of America Invents Act (AIA) trials.

On March 27th, 1997, the 9th Cir. decided to affirm a preliminary injunction prohibiting the publication and distribution of The Cat NOT in the Hat!, a parody of the O.J. Simpson murder trial told in the style of Dr. Seuss… Geisel had passed in 1991 but Dr. Seuss Enterprises filed a copyright and trademark infringement suit against Penguin and Dove seeking the injunction before the work was published. Seuss alleged that The Cat NOT in the Hat! misappropriated protected elements of copyrighted works, infringed upon six unregistered trademarks and one registered trademark and diluted the distinctive quality of the Seuss marks. On March 21st, 1996, the injunction sought by Seuss was granted in district court, enjoining the distribution of 12,000 books, which were published at a cost of $35,000.

The ruling has wide implications for both the fashion apparel and home furnishings industry, both of which rely on distinctive, eye-catching designs to sell products. The upshot for clothing and furniture companies is that the Varsity Brands ruling gives product manufacturers an additional tool to combat knock-off designs. With that in mind, manufacturers should review their product line to ensure their copyright-eligible products are protected under this new standard.

Google tries to strike a “patent peace” with a new cross-licensing initiative for Android developers. The Federal Circuit is petitioned for review of a judgment in a patent case on the grounds that arbitration flouted public policy. A couple of Texas academic institutions square off in a patent battle over cancer treatments. Also, a House bill moves forward which would make the Register of Copyrights a Presidential appointee.

The Supreme Court hears oral arguments in a case that could create venue limitations on patent infringement actions. A major Korean consumer tech firm files its first patent infringement suits it has ever filed in the U.S. Chinese courts overturn a ban on a major American-designed smartphone. President Trump taps Jared Kushner to lead a new innovation office within the White House. And Marvel wins a partial summary judgment in a copyright dispute relating to Iron Man and whether the company stole the familiar Iron Man suit from another comic book character.

On March 15th, an appeal filed in the U.S. Court of Appeals for the Ninth Circuit (9th Cir.) gave new life to a copyright battle that has been waged over arguably the most popular rock song of all time. Counsel representing Randy Wolfe, guitarist for the rock band Spirit, appealed an earlier decision from California district court, charging that the…

A growing Chinese consumer electronics firm acquires a patent portfolio that makes them the fourth global producer of smartphones with the capacity to develop semiconductors in-house. The Supreme Court denies writ in a case, leaving in place a lower court’s decision on plaintiff standing in asserting foreign trademarks in the U.S. The Federal Circuit upholds patent invalidations levied against IP monetization firm Intellectual Ventures. Also, songwriter industry groups lobby the Copyright Office to adjust royalty fee structures in light of the growth of online streaming media.

On the menu this week for Other Barks & Bites, the Supreme Court hears oral arguments in a case challenging the Lanham Act’s disparagement provision, a six-figure damages verdict goes in favor of former USPTO Deputy Director Russell Slifer, a TTAB petition is filed to challenge the trademark application for an NFL franchise currently in the relocation process, an announcement by a Japanese academic-industry research project that claims to have doubled the effectiveness of solar cell panel conversion rates, the FTC takes action against a pharmaceutical company and much more.

Trademark injunctions must take into account both online promotion and future expansion plans. A narrowly-tailored geographically limited injunction can be particularly damaging to growing businesses if the business is forced to accept trademark confusion in the event of future expansion. The geographic scope of a trademark injunction should, therefore, carefully take into consideration the total services, activities, and growth plans of the successful plaintiff’s business endeavors.