Justia Commercial Law Opinion Summaries

The 314 patent, its continuation, the 492 patent, and the 639 patent, relate to electronic commerce; products are offered and purchased through computers interconnected by a network. The patents arise from a software system called “Transact,” developed in 1996 by Open Market. In 2001 Open Market was sold, with the Transact software and patents, to Divine, which was unable to provide support for the complex product and declared bankruptcy. Soverain acquired the Transact software and patents, then sued seven online retailers for patent infringement. The defendants, except Newegg, took paid up licenses to the patents. Newegg declined to pay, stating that its system is materially different and that the patents are invalid if given the scope asserted by Soverain: similar electronic commerce systems were known before the system; the Transact software was generally abandoned; and Newegg’s system, based on the different principle of using “cookies” on the buyer’s computer to collect shopping data, is outside of the claims. The district court awarded Soverain damages and an ongoing royalty and held that the claims were not invalid as obvious. The Federal Circuit reversed in part, holding that claims in the all of the patents are invalid for obviousness. View "Soverain Software, LLC v. Newegg, Inc." on Justia Law

LE, creator of the “5-hour ENERGY” energy shot, asserted that N.V.E., creator of the “6 Hour POWER” energy shot, infringed its trademark, under the Lanham Act. 15 U.S.C. 125(a). LE distributed a “recall notice” stating that NVE’s “‘6 Hour’ energy shot” had been recalled. NVE claims that the notice constituted false advertising in violation of the Lanham Act and anti-competitive conduct in violation of the Sherman Act, 15 U.S.C. 2. The district court first found that a likelihood of confusion did not exist between “6 Hour POWER” and “5-hour ENERGY” and held that the recall notice did not constitute false advertising or a violation of the Sherman Act. The Sixth Circuit reversed with respect to trademark infringement and false advertising claims, but affirmed with respect to Sherman Act claims. The “5-hour ENERGY” mark is suggestive and protectable, but the factors concerning likelihood of confusion were closely balanced, making summary judgment in appropriate. There were also unresolved questions of fact as to whether the “recall notice” was misleading, but there was no Sherman Act violation because it was relatively simple for NVE to counter it by sending notices that “6 Hour POWER” had not been recalled. View "N.V.E., Inc. v. Innovation Ventures, LLC" on Justia Law

Lexmark manufactures printers and toner cartridges. Remanufacturers acquire used Lexmark cartridges, refill them, and sell them at a lower cost. Lexmark developed microchips for the cartridges and the printers so that Lexmark printers will reject cartridges not containing a matching microchip and patented certain aspects of the cartridges. SC began replicating the microchips and selling them to remanufacturers along with other parts for repair and resale of Lexmark toner cartridges. Lexmark sued SC for copyright violations related to its source code in making the duplicate microchips and obtained a preliminary injunction. SC counterclaimed under federal and state antitrust and false-advertising laws. While that suit was pending, SC redesigned its microchips and sued Lexmark for declaratory judgment to establish that the redesigned microchips did not infringe any copyright. Lexmark counterclaimed again for copyright violations and added patent counterclaims. The suits were consolidated. The Sixth Circuit vacated the injunction and rejected Lexmark’s copyright theories. On remand, the court dismissed all SC counterclaims. A jury held that SC did not induce patent infringement and advised that Lexmark misused its patents. The Sixth Circuit affirmed dismissal of federal antitrust claims, but reversed dismissal of SC’s claims under the Lanham Act and certain state law claims. View "Static Control Components, Inc v. Lexmark Int'l, Inc." on Justia Law

Maker's Mark sued Jose Cuervo for trademark infringement, based on Cuervo's use of red dripping wax seal on bottles of premium tequila. The district court found that the Maker's Mark trademark was valid, rejecting an argument of "functionality" under 15 U.S.C. 1065, and had been infringed. The court entered an injunction, but denied damages. The Sixth Circuit affirmed. The court traced the history of bourbon whiskey and noted that Maker's Mark and its use of a red dripping wax seal, a registered trademark since 1958, occupy a central place in the modern story of bourbon. The majority of the factors indicate a possibility of "confusion of sponsorship" trademark infringement: strength of the trademark, relatedness of the goods, similarity, and marketing channels. Whether there was actual confusion was a neutral factor. View "Maker's Mark Distillery, Inc. v. Diageo North America, Inc." on Justia Law

Triumph publishes books and software to prepare teachers and students for standardized tests. In 2004, Triumph filed use-based applications for the COACH word mark, a stylized COACH mark, and a COACH mark and design. CSI sells handbags, luggage, clothing, watches, eye glasses, and wallets and has used the COACH mark since at least 1961. CSI owns 16 incontestable registrations for the COACH mark: all but one issued before Triumph's application. CSI filed Notice of Opposition on grounds of likelihood of confusion (15 U.S.C. 1052(d)) and dilution (15 U.S.C. 1125(c)). The Trademark Trial and Appeal Board dismissed. The Federal Circuit affirmed findings that there was no likelihood of confusion between the marks and that CSI failed to prove likelihood of dilution. Because of evidentiary errors, the court vacated and remanded a finding that, although Triumph's marks are merely descriptive, they have acquired secondary meaning, and were entitled to registration. View "Coach Serv., Inc. v. Triumph Learning, LLC" on Justia Law

Defendant, a domestic manufacturer of cast steel railway wheels, owns two secret processes for manufacturing such wheel. It uses one process at three of its domestic foundries and has licensed the other to firms with foundries in China. Unsuccessful in obtaining a license for plaintiff's process, defendant hired employees that had been trained in plaintiffs' processes and began manufacturing wheels in China for sale in the U.S. The International Trade Commission found violation of the Tariff Act of 1930, 19 U.S.C. § 1337, finding that found that the wheels were manufactured using a process developed in the U.S., protected under domestic trade secret law, and misappropriated abroad. The Federal Circuit affirmed, holding that the wheel imports threaten to destroy or substantially injure an industry in the U.S., in violation of section 337, which covers "[u]nfair methods of competition and unfair acts in the importation of articles . . . into the United States." The Commission has authority to investigate and grant relief based in part on extraterritorial conduct insofar as it is necessary to protect domestic industries from injuries arising out of unfair competition in the domestic marketplace. View "Tianrui Grp. Co., Ltd. v. Int'l Trade Comm'n" on Justia Law

A manufacturer of cable connectors that are used to connect coaxial cables to electronic devices filed a complaint with the International Trade Commission asserting that the importation, sale for importation, and sale after importation of certain coaxial cable connectors infringed four of its patents and therefore violated 19 U.S.C. 1337. Its 539 design patent patent issued in 2001 and describes an ornamental design for a coaxial cable connector. The Commission ruled that the company failed to satisfy the requirement of showing that a "domestic industry" exists or was being established. The Federal Circuit affirmed. The company's enforcement litigation expenses did not constitute "substantial investment in exploitation" of the 539 patent. Those costs were not sufficiently related to licensing. The company has no formal licensing program and the litigation opponent was its only licensee. View "John Mezzalingua Assocs., Inc. v. Int'l Trade Comm'n" on Justia Law

The jury found that Amazon's 1-click purchasing system infringes plaintiff's 710 patent, entitled "Object-Based On-Line Transaction Infrastructure," which covers an online purchasing system, but that all of the claims of the patent were invalid, and that Amazon did not infringe any of the other patents at issue. The judge granted a plaintiff's post-verdict motion and ruled that the 710 patent claims were not invalid. The Federal Circuit reversed the post-verdict ruling and held that each asserted claim of the 710 Patent is invalid as anticipated and the asserted claims of the other patents remain valid and not infringed.

The holder of patents on an FDA-approved product that promotes eyelash growth claimed patent infringement and violation of California Business & Professions Code 17200 unfair competition provisions against companies marketing similar products. The district court dismissed the state law claims for lack of standing under an amendment to that law, enacted by the voters as Proposition 64. The Federal Circuit reversed and remanded. The complaint adequately alleged economic injury caused by defendants' unfair business practices; it is not necessary that the plaintiff had direct business dealings with the defendants.

For many years the owners of the original bridal shop allowed family members to operate similar businesses under the same name. The owners sold one of their own shops and the buyer agreed to pay $75,000 per year for the use of the name and marks. When the agreement expired in 2002, the buyer continued to use the name and marks, without paying. The district court dismissed a 2007 claim under the Lanham Act, 15 U.S.C. 1117, 1125. The Seventh Circuit affirmed, holding that the owners abandoned their mark by engaging in "naked licensing:" allowing others to use the mark without exercising reasonable control over the nature and quality of the goods, services, or business on which the mark is used. It was not enough that the owners had confidence in the high quality of the buyer's operation; they retained no control.