Justia Commercial Law Opinion Summaries

uPI and Richtek design and sell DC-DC controllers that convert direct current from one voltage to another, and are embodied in chips for downstream devices such as computer motherboards. uPI was founded by former Richtek employees; its chips are imported into the U.S. either directly or as incorporated in downstream devices. Richtek complained to the International Trade Commission that uPI misappropriated Richtek’s trade secrets and infringed Richtek’s U.S. patents, in violation of the Tariff Act, 19 U.S.C. 1337. uPI offered to enter into a consent order and to cease importation of products produced using or containing Richtek’s trade secrets or infringing Richtek’s patents. Over Richtek’s objection, the ALJ entered the consent order substantially as drafted by uPI. The Commission terminated the investigation. A year later Richtek filed an Enforcement Complaint. An ALJ distinguished between products that were accused in the prior investigation and products allegedly developed and produced after entry of the Consent Order, finding violations as to the formerly accused products and that the post- Consent Order products infringed two patents, but were independently developed and not produced using Richtek’s trade secrets. The Commission affirmed with respect to the formerly accused products and reversed in part with respect to the post-Order products. The Federal Circuit affirmed concerning the formerly accused products, but reversed the ruling of no violation as to the post-Consent Order products.View "UPI Semiconductor Corp. v. Int'l Trade Comm'n" on Justia Law

Plaintiff is the marketer, distributor, and seller of 5-hour ENERGY (FHE), an “energy shot,” which is an energy drink sold and consumed in small portions. Plaintiff began selling FHE in 2004. FHE was not the first energy shot on the market, but was the first to achieve widespread success and was unique in being marketed FHE to adults as a replacement for an afternoon cup of coffee or a caffeinated soda. Plaintiff submitted “5-hour ENERGY” for trademark registration with the Patent and Trademark Office, which rejected the application in January 2005, deeming the mark too descriptive to be eligible for protection. Plaintiff placed FHE on the Supplemental Register in September 2005 and secured a trademark for “5-hour ENERGY” in August 2011. Plaintiff also protected its mark and market position through litigation. Defendants have marketed dietary supplements since the mid-1990s. In 2008, defendants began to market and sell “6 Hour Energy Shot,” in a bottle resembling the FHE bottle. In a suit under the Lanham Act, 15 U.S.C. 1051, the district court found infringement of plaintiff’s trademark and trade dress, then entered an order of contempt after the defendants violated a permanent injunction entered. The Sixth Circuit affirmed.View "Innovation Ventures, LLC v. N2G Distrib., Inc." on Justia Law

Cubatabaco, a Cuban entity, and General, a Delaware company, manufacture and distribute cigars using the COHIBA mark. General owns trademark registrations issued in 1981 and 1995. Cubatabaco owns the mark in Cuba and uses it worldwide. Cuban Assets Control Regulations (CACR), prohibit Cubatabaco from selling cigars in the U.S.; 31 C.F.R. 515.201(b) prohibits “transfer of property rights . . . to a Cuban entity,” but a general or specific license allows Cuban entities to engage in otherwise prohibited transactions. General licenses are available for transactions “related to the registration and renewal” of U.S. trademark. Specific licenses issue from the Office of Foreign Assets Control. Cubatabaco used a general license to attempt to register the COHIBA mark in 1997, relying on 15 U.S.C. 1126(e), which allows reliance on a foreign registration if the applicant has a bona fide intent to use the mark in commerce. Cubatabaco also sought to cancel General’s registrations, which the PTO cited as a basis for likelihood of confusion. Cubatabaco obtained a special license to sue General. The district court held that General had abandoned its registration by non-use and enjoined General’s use of the COHIBA mark, finding that Cubatabaco had acquired ownership under the famous marks doctrine. The Second Circuit reversed, holding that injunctive relief would involve a prohibited transfer under CACR because Cubatabaco would acquire ownership of the mark and later affirmed denial of General’s motion concerning cancellation of its registrations. The Board then dismissed Cubatabaco’s petition, stating that it need not address preclusion because Cubatabaco lacked standing. The Federal Circuit vacated, finding that Cubatabaco has a statutory cause of action to petition to cancel the registrations and that issue and claim preclusion do not bar that petition View "Empresa Cubana del Tabaco v. General Cigar Co., Inc." on Justia Law

Rapid-prototyping “additive technology” creates parts by building layer upon layer of plastics, metals, or ceramics. Subtractive technology starts with a block and cuts away layers. Additive technology include SL, fused deposition modeling, laser sintering, 3D printing, direct metal laser sintering, and digital light processing. 3DS is the sole U.S. supplier of SL machines, which use an ultraviolet laser to trace a cross section of an object on a vat of liquid polymer resin. The laser solidifies the resin it touches, while untouched, areas remain liquid. After one cross-section has solidified, the newly formed layer is lowered below the surface of the resin. The process is repeated until the object is completed. Users of SL machines often own many machines with varying sizes, speeds, and accuracy levels. 3DS began equipping some of its SL machines with wireless technology that allows a receiver to communicate with a transmitter on the cap of a resin bottle. A software-based lockout feature shuts the machine off upon detection of a resin not approved by 3DD. 3DS has approved two of Desotech’s resins and entered into negotiations for approval of additional resins. After negotiations broke down, Desotech sued, alleging tying, unreasonable restraint of trade, and attempted monopolization under the Sherman Act; tying under the Clayton Act; patent infringement; and violations of the Illinois Antitrust and Uniform Deceptive Trade Practices Acts. The district court granted 3DS summary judgment on the antitrust claims and certain state-law claims. The parties stipulated to dismissal of the remaining claims. The Federal Circuit affirmed. View "DSM Desotech Inc. v. 3D Sys. Corp." on Justia Law

Kraft sued Cracker Barrel Old Country Store for trademark infringement, Lanham Act, 15 U.S.C. 1051, and obtained a preliminary injunction against the sale of food products to grocery stores under the name Cracker Barrel, which is a registered trademark of Kraft. Kraft has been selling cheese in grocery stores under that name for more than 50 years. Kraft did not challenge CBOCS’s right to sell the products under the name Cracker Barrel in CBOCS’s restaurants, in its “country stores” that adjoin the restaurants, or by mail order or online. The Seventh Circuit affirmed, noting the similarity of the logos, the products, and of the channels of distribution. View "Kraft Foods Grp. Brands LLC v. Cracker Barrel Old Country Store, Inc." on Justia Law

Lexmark sells the only type of toner cartridges that work with its laser printers; remanufacturers acquire and refurbish used Lexmark cartridges to sell in competition with Lexmark’s new and refurbished cartridges. Lexmark’s “Prebate” program gives customers a discount on new cartridges if they agree to return empty cartridges to the company. Every Prebate cartridge has a microchip that disables the empty cartridge unless Lexmark replaces the chip. Static Control makes and sells components for cartridge remanufacture and developed a microchip that mimicked Lexmark’s. Lexmark sued for copyright infringement. Static Control counterclaimed that Lexmark engaged in false or misleading advertising under the Lanham Act, 15 U.S.C. 1125(a), and caused Static Control lost sales and damage to its business reputation. The district court held that Static Control lacked “prudential standing,” applying a multifactor balancing test. The Sixth Circuit reversed, applying a “reasonable interest” test. A unanimous Supreme Court affirmed. The Court stated that the issue was not “prudential standing.” Whether a plaintiff comes within a statute’s zone of interests requires traditional statutory interpretation. The Lanham Act includes in its statement of purposes, “protect[ing] persons engaged in [commerce within the control of Congress] against unfair competition.” “Unfair competition” is concerned with injuries to business reputation and sales. A section 1125(a) plaintiff must show that its injury flows directly from the deception caused by the defendant’s advertising; that occurs when deception causes consumers to withhold trade from the plaintiff. The zone-of-interests test and the proximate-cause requirement identify who may sue under section 1125(a) and provide better guidance than the multi-factor balancing test, the direct-competitor test, or the reasonable-interest test. Static Control comes within the class of plaintiffs authorized to sue under section 1125(a). Its alleged injuries fall within the zone of interests protected by the Act, and it sufficiently alleged that its injuries were proximately caused by Lexmark’s misrepresentations. View "Lexmark Int’l, Inc. v. Static Control Components, Inc." on Justia Law

Lexmark sells the only type of toner cartridges that work with its laser printers; remanufacturers acquire and refurbish used Lexmark cartridges to sell in competition with Lexmark’s new and refurbished cartridges. Lexmark’s “Prebate” program gives customers a discount on new cartridges if they agree to return empty cartridges to the company. Every Prebate cartridge has a microchip that disables the empty cartridge unless Lexmark replaces the chip. Static Control makes and sells components for cartridge remanufacture and developed a microchip that mimicked Lexmark’s. Lexmark sued for copyright infringement. Static Control counterclaimed that Lexmark engaged in false or misleading advertising under the Lanham Act, 15 U.S.C. 1125(a), and caused Static Control lost sales and damage to its business reputation. The district court held that Static Control lacked “prudential standing,” applying a multifactor balancing test. The Sixth Circuit reversed, applying a “reasonable interest” test. A unanimous Supreme Court affirmed. The Court stated that the issue was not “prudential standing.” Whether a plaintiff comes within a statute’s zone of interests requires traditional statutory interpretation. The Lanham Act includes in its statement of purposes, “protect[ing] persons engaged in [commerce within the control of Congress] against unfair competition.” “Unfair competition” is concerned with injuries to business reputation and sales. A section 1125(a) plaintiff must show that its injury flows directly from the deception caused by the defendant’s advertising; that occurs when deception causes consumers to withhold trade from the plaintiff. The zone-of-interests test and the proximate-cause requirement identify who may sue under section 1125(a) and provide better guidance than the multi-factor balancing test, the direct-competitor test, or the reasonable-interest test. Static Control comes within the class of plaintiffs authorized to sue under section 1125(a). Its alleged injuries fall within the zone of interests protected by the Act, and it sufficiently alleged that its injuries were proximately caused by Lexmark’s misrepresentations. View "Lexmark Int'l, Inc. v. Static Control Components, Inc." on Justia Law

Klein-Becker USA and Klein-Becker IP Holdings sued Patrick Englert and Mr. Finest, Inc., for trademark infringement, copyright infringement, false advertising, and unfair competition under the Lanham Act; false advertising under the Utah Truth in Advertising Act; unfair competition under the Utah Unfair Practices Act; fraud; civil conspiracy; and intentional interference with existing and prospective business relations. The action arose from Englert's unauthorized selling of "StriVectin" skin care products: he posed as a General Nutrition Center (GNC) store to purchase the products at below wholesale rates. Englert then sold the products through eBay and other commercial web platforms, including his own, "mrfinest.com." Englert was sanctioned several times for failing to comply with court orders and discovery schedules. The third and final sanction resulted in the entry of default judgment for Klein-Becker on all remaining claims. Englert appealed the district court's entry of default judgment against him, determination of his personal liability and the amount of damages owed, grant of a permanent injunction, denial of a jury trial, and refusal to allow him to call a certain witness. Upon review, the Tenth Circuit found no fault in the district court's analysis or judgment and affirmed. View "Klein-Becker USA v. Englert" on Justia Law

Plaintiff, an active genealogist and animal rights activist, claimed that her name had commercial value and that search engines generated revenue as a result of internet searches of her name. She specifically alleges that various features of Google’s search engine violate her right of publicity by using her name to trigger sponsored links, ads, and related searches to medications, including Levitra, Cialis, and Viagra, all of which are trademarks of nationally advertised oral treatments for male erectile dysfunction. The district court dismissed her suit alleging common law misappropriation and violation of the state right-of-privacy law, Wis. Stat. 995.50(2)(b). The Seventh Circuit affirmed, citing the public interest and incidental use exceptions. View "Stayart v. Google Inc." on Justia Law

Wyko sold parts to tire manufacturers, but in the U.S., provided parts for steel tire-assembly machines only for Goodyear. Wyko contracted with HaoHua, owned by the Chinese government, to supply parts unlike any it had previously built. Goodyear used machines like those Wyko needed. Goodyear asked Wyko to repair tire-assembly machines. Wyko sent engineers. Before their visit, both signed agreements that they might have access to trade secrets or other confidential information and that they would not disclose that information. A security guard reminded them that no cameras were allowed inside the factory. Unescorted for a few minutes, one engineer used his cell-phone camera to take photos that were forwarded to the design team. Wyko’s IT manager forwarded the e-mail to Goodyear. Goodyear notified the FBI. Convicted of theft of trade secrets (18 U.S.C. 1832(a)) and wire fraud (18 U.S.C. 1343, 1349), the engineers were sentenced to four months of home confinement, community service, and probation. The Sixth Circuit affirmed the convictions, rejecting an argument that the photographs did not meet the statutory definition because Goodyear did not take “reasonable measures” to protect secrecy. The court reversed the sentences because the court had not adequately explained its calculation of loss. View "United States v. Howley" on Justia Law