Posts in District Courts

On October 5, 2016, a jury in Tiffany and Co. v. Costco Wholesale Corp. – litigated before Judge Swain of the Southern District Court of New York – awarded Tiffany & Co. (Tiffany) $8.25 million in punitive damages for willful and bad faith infringement of their trademark by defendant Costco Wholesale Corp. (Costco). This award, in combination with an earlier award of $5.5 million in profits and statutory damages, brings the total damages owed by Costco to $13.75 million. The case is particularly notable for several reasons, but specifically because punitive damages were awarded.

On Thursday, December 15th, a subsidiary of Kenilworth, NJ-based pharmaceutical developer Merck & Co. (NYSE:MRK) was awarded $2.54 in royalty damages in a case involving one of the most popular available treatments for combating the hepatitis C virus (HCV). A federal jury decided that Gilead Sciences Inc. (NASDAQ:GILD), an American biotech firm headquartered in Foster City, CA, owed these royalties as a result of its infringement of patents for HCV treatments held by Merck’s Cambridge, MA-based subsidiary Idenix Pharmaceuticals. According to coverage of the verdict by Bloomberg, this $2.54 billion royalties award is the largest verdict for patent infringement in the history of the United States. The case was decided by jury in the U.S. District Court for the District of Delaware (D. Del.).

Dallas-based auction house Heritage Auctions filed a copyright infringement complaint against New York City-based Christie’s, Inc. and Christie’s database subsidiary Collectrium. The suit alleges that Christie’s and Collectrium engaged in stealing copyright-protected images and lifted other private data from Heritage’s servers in order to drive its own sales… Heritage first identified this July that a crawling “spider” software program was operating on its servers accessible through HA.com, Heritage’s official website for offering online-only auctions and providing image catalogues of items available through live auctions. In its complaint, Heritage noted that the activities conducted by the spider software program, including database scraping or copying content for commercial purposes, is prohibited under terms of a Website User Agreement to which each registered user of HA.com agrees upon creating an account.

Suffice it to say that 2016 has been an interesting year. The political climate is much different than one year ago amidst a growing tide of nationalism abroad and populism here in the United States. Throw in a massive migration crisis stemming from the Middle East, a slew of unexpected celebrity passings and the fact that the Chicago Cubs are lovable losers no more, and we’re about to wind down a year which seems nearly mythological in stature… As we turn the page onward to 2017, it’s a good time to take another look at some of the major trends shaping the IP and technology landscape in the United States and abroad. From increasing competition with an Asian powerhouse to the continuation of a misleading narrative about patent system abuses, the past year leaves us with many important narratives to consider for the year ahead.

Last December, the 2015 Amendments to the Federal Rules of Civil Procedure abolished Rule 84 and the Appendix of Forms, removing any doubt that Twombly’s plausibility standard applies to claims for direct patent infringement. The elimination of Rule 84 and Form 18 raised many questions about whether pleading standards for direct infringement would change and, if so, how. Over the past year, many district courts have tried to answer these questions. Below is an overview of the different conclusions reached by district courts, but first, it would be worth reviewing Federal Circuit precedent on the issue.

According to the complaint, when the 2015 arose the defendant gave written representations that they had indeed infringed on the trademarks and trade dress of WRB, that the trademarks and trade dress were valid and enforceable, that they would cease any further use of the trademarks or trade dress, and that they promised to pay costs and attorneys’ fees in addition to any remedies available under the law. Unfortunately, the willful trademark infringement did not stop there according to WRB.

Entities owning the copyrights to music created by the late pop star Prince had filed suit against Roc Nation, the entertainment company owned by rapper Jay Z, which is affiliated with the streaming music service Tidal. Plaintiffs NPG Records and NPG Music Publishing allege that Tidal and Roc Nation have engaged in copyright infringement by adding a series of 15 unauthorized Prince albums to the Tidal catalog this June. The case is filed in the U.S. District Court for the District of Minnesota.

On Monday, November 21st, a judge in the U.S. District Court for the Southern District of New York (S.D.N.Y.) issued a decision allowing a copyright case involving the well-known spiritual song and 20th century civil rights anthem “We Shall Overcome” to go forward. At the center of this case is the question of whether or not “We Shall Overcome” is part of the public domain in the United States, and the recent decision by S.D.N.Y. Judge Denise Cote indicates that the song could in fact be public domain material. “Resolution of the issues of originality and ownership will require discovery and a more developed record,” Cote’s decision reads.

Olaplex argues that L’Oreal is profiting from technology it first came into contact with in 2015, when L’Oreal discussed a possible takeover with Olaplex. After seeing Olaplex’s proprietary technology, including an unpublished patent application and Olaplex’s marketing strategy, Olaplex alleges that L’Oreal ceased with its acquisition efforts after signing a non-disclosure agreement with Olaplex. About a year later, L’Oreal began selling a series of three hair treatment products infringing upon Olaplex’s intellectual property related to bond builders, according to reports.

After Halo, courts appear to be breathing new life into claims for willful patent infringement and enhanced damages claims. In fact, since Halo’s new standard took effect a few months ago, juries found willful infringement in three out of four cases where they returned a verdict of infringement. However, as discussed below, there are steps a defendant can take to protect itself against a finding of willful infringement.

Joseph and Adriana Shayota were recently found guilty of manufacturing and selling millions of counterfeit bottles 5-hour ENERGY. They were kingpins in a criminal ring of 11 people charged with the counterfeiting. Eight of the conspirators have already plead guilty and one is a fugitive. Their clandestine factory was located in San Diego, and employed more than 50 workers working two shifts per day. They manufactured about 4.3 million counterfeits, all of which were either consumed or seized by 2012.

The Review the Rule Act of 2016 was introduced into the U.S. Senate by Sen. Chris Coons (D-DE), which would delay amendments to Federal Rule of Criminal Procedure 41 set to go into effect on December 1st… The proposed changes to Federal Rule of Criminal Procedure 41, which governs the process for legal searches and seizures of criminal evidence, contraband and criminal suspects, were proposed to both houses of Congress this April by the U.S. Supreme Court in a letter to both houses of Congress from Chief Justice John Roberts. The changes to Rule 41 would give a magistrate judge in a district where activities related to a crime may have occurred the authority to issue a warrant to remotely access electronic storage media to copy electronic records even if the electronic storage media may be outside of the judge’s district.

On November 1st, the U.S. Court of Appeals for the Eighth Circuit (8th Cir.) issued a decision in a case brought by motion picture entertainment company Warner Bros. and appealed by a group of defendants who licensed images culled from publicity material for some of Warner’s most famous entertainment properties. A panel from the 8th Cir. found in favor of Warner Bros. and affirmed an earlier verdict, which has helped to define whether publicity material for films and animated shows are available in the public domain. This decision is the second time that 8th Cir. has issued a judgment in this case.

Ohio State alleges that CafePress offers 1,100 Ohio State Buckeyes designs available on a total of 67,300 products. These products infringe upon trademarks held by Ohio State protecting its use of a buckeye flower design on decals and stickers, a large stylized “O”, a similar stylized “O” with the wording “OHIO STATE” running through the center and an illustration of four figurines forming the letters “O-H-I-O” with their arms above their heads. Ohio State also alleges trademark infringement on CafePress merchandise reflecting the persona of Urban Meyer, who has assigned the rights to his name, voice, signature and other rights of persona to the university.

The Federal Circuit recently issued a non-precedential decision in a patent infringement action involving American pop music stars Justin Timberlake and Britney Spears and their production companies. The Federal Circuit’s decision vacated an earlier award of attorneys’ fees to Timberlake, Spears and the other defendants based on a finding that the case was exceptional within the meaning of 35 U.S.C. 285. The per curiam decision from the panel made up of Judges Moore, Linn and O’Malley explained that certain of the factors relied upon by the district court to find this case to be exceptional were entitled to no weight under § 285. Thus, the attorneys’ fee order of the district court was vacated and the case remanded for further proceedings.