September 2012

Yes, You Can Trademark the Color Red (on the sole of a shoe)

September 13, 2012

One of the thorniest issues in trademark law is whether and when trademark law will protect the use of a single color. After all, there are an infinite number of colors, and it would hardly be fair if one company could obtain a theoretically perpetual right to exclude others from using a color. So, the law makes it difficult to achieve this. Cases involving color marks are rare, but the Second Circuit released an important decision last week in Christian Louboutin S.A. v. Yves Saint Laurent Am., Inc., (2nd Cir. 2012). The court held that Louboutin’s trademark, consisting of a red, lacquered outsole on a high fashion woman’s shoe (the “Red Sole Mark”), has acquired limited “secondary meaning” as a distinctive symbol that identifies the Louboutin brand, but (oddly) only where the red outsole contrasts with the color of the remainder of the shoe. The heart of the decision is the court’s functionality analysis. Trademark law recognizes two types of functionality, “utilitarian” functionality, and “aesthetic” functionality. Utilitarian functionality occurs when a product feature is essential to the use or purpose of the article, or if it affects the cost or quality of the article. The court had no difficulty finding that the red outsole was not precluded from trademark protection by reason of utilitarian functionality, since the color serves no utilitarian purpose. However, that did not end the inquiry. The court had to determine whether Louboutin’s Red Sole…

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After Judge Zobel Slams Tenenbaum, Eighth Circuit Whacks Thomas-Rasset

September 12, 2012

In late August Massachusetts U.S. District Court Judge Rya Zobel refused to remit $675,000 in statutory copyright damages that a jury awarded (long ago, pre-appeal) against Joel Tenenbaum, and held that the award did not violate Tenenbaum’s constitutional rights under the Due Process Clause.  (Blog post on Tenenbaum here). Yesterday, in a case involving essentially identical issues, the 8th Circuit affirmed a $220,000 jury verdict against Jamie Thomas-Rasset. Ms. Thomas-Rasset has had a rough six years since she was first sued for downloading 24 copyrighted songs. She has been through three jury trials, resulting in verdicts of $220,000, $1.92 million and $1.5 million. The federal district court trial judge in Minneapolis seemed to be sympathetic to her plight, setting-aside or reducing the verdict each time. However, the recording companies persisted, and it appears that her luck may have finally run out. The Eighth Circuit Court of Appeals ordered the trial judge to enter judgment against Ms. Thomas-Rasset in the amount of the original, $220,000 verdict (as requested by the record companies). Importantly, the court rejected Thomas-Rasset’s claim that a statutory damages award of $9,166 per song violated the Due Process Clause. Just as importantly, the court declined to be the first federal circuit court to rule on whether making sound recordings available for distribution on a peer-to-peer network (as Ms. Thomas-Rasset did) violates a copyright owners’ exclusive “distribution” right under section 106(3) of the…

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TomTom Unable to Preempt Suit In Texas By Seeking Declaratory Judgment in Massachusetts

September 11, 2012

As I’ve written before, getting sued for patent infringement in Texas (often the Eastern District, or “EdTX”) is generally viewed as undesirable by corporate America. Apparently seeking to avoid this unpleasantness, TomTom, Inc. filed a suit in Massachusetts, asking the court to declare that it did not infringe several patents held by Norman IP Holdings, Inc., over which Norman had already sued TomTom in EdTX. As its name suggets, and as best I can determine, Norman is a non-practicing entity that has been active in the courts of EdTX. However, TomTom’s strategy of avoiding Texas appears to have failed. Massachusetts U.S. District Court Judge Saylor has upheld a decision by Magistrate Judge Judith Dein concluding that the Massachusetts court did not have jurisdiction over Norman, and therefore could not force Norman to confront it over these issues in Massachusetts. It appears that Texas is where TomTom will have to defend itself against Norman. I will quote, not for the first or last time, the words of General Phillip Sheridan: “if I owned Texas and Hell, I’d rent out Texas and live in Hell.” Words that ring true for Texas patent defendants. TomTom, Inc. v. Norman IP Holdings, LLC (D. Mass. September 4, 2012)  

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Why Can’t We All Get Along? CAFC Fractures Over Divided Infringement

September 9, 2012

“. . . the intolerable wrestle with words and meanings . . .” East Coker, by T.S. Eliot __________ Congress enacts laws.  The courts interpret and apply them in cases. Often, there is disagreement over what the words mean, and judges debate the meaning in published decisions. Judges on the same court may agree, disagree, dissent, concur, and form shifting majorities and minorities. Occasionally, congress will take notice and attempt to clarify a law by amendment. Sometimes, this only adds to the confusion. The eleven active judges on the Court of Appeals for the Federal Circuit, the patent appeals court, exemplify this dynamic in their August 31, 2012 en banc decision in two cases consolidated on appeal, Akamai v. Limelight and McKesson v. Epic Systems (link). The decision, totaling over 100 pages, is comprised of three opinions, each with dramatically different views of a fundamental issue in patent law. The core issue the judges on the CAFC were unable to agree upon on is this: does patent infringement occur when separate entities perform the steps of a patented method? To take a simple example, assume that a patent claim involves just two steps: first, delivering a web page to a customer’s server, second, the some form of manipulation of the page by the customer (e.g., tagging or data hashing).* In fact, this is, in highly simplified form, analagous to some of…

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First Circuit: Company’s Vague Contract Insufficient to Prevent Supplier From Competing

September 5, 2012

A contract between a company and its supplier states that the supplier shall not “develop any other product derived from or based on” the company’s product.  Can the company enforce this provision against the supplier when the supplier develops a product that does not appropriate any trade secrets or novel features of the company’s product? Not according to a decision of the First Circuit issued on September 4th. Where the features of the product are well known in the art, and there has been no appropriation of novel features of the product, such a contract provision cannot be used to enjoin sales of the “derived” product: “a private contract may restrict copying of an idea that was not in the public domain at the time of contracting, but may not withdraw any idea from the public domain.” Contour Design, Inc. v. Chance Mold Steel Co., Ltd. (1st Cir., Sept. 4, 2012)

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Oracle and SAP Avoid a Retrial, Go Directly to Appeal, in the Other “Tech Trial of the Century”

September 4, 2012

Now that the patent trial of the century is on pause for a bit (Apple v. Samsung), it’s time to catch up on the other tech trial of the century, Oracle v. SAP.  Yes, it’s difficult to keep track of all these tech trials of the century.  I hope that 80 years from now the world remembers that we had the tech trials of the century back in 2010 and 2012.* *Oh, I almost forgot the other (the third) tech trial of the century, the copyright/patent trial between Oracle and Google earlier this year.  There may even be other tech trials of the century I have forgotten that were tried back in the early years of the century. My memory for this type of thing cuts out after a few years. Seriously, for those who may have forgotten, in 2010 Oracle won a $1.3 billion copyright infringement judgment against SAP, reportedly the largest copyright judgment ever.  There was much hullaballo over the size of this verdict, until the trial judge threw a wet towel over the case, ordering remittitur, reducing the judgment by over $1 billion, and giving Oracle the choice of accepting a paltry $272 million or retrying its case.  Oracle elected to retry the case, and the second trial was scheduled to begin in late August. However, neither side really wanted to retry the case, and they figured out a…

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Apple v. Samsung Jury Verdict Form. Huh?

September 3, 2012

I’ve been meaning to post a link to the jury verdict form in the Apple v. Samsung patent case. Here it is, linked at the bottom of the post. And no, that’s not some weird crossword puzzle on the left, it’s a tiny section of the verdict form. If this isn’t the most complex jury verdict form in American legal history, I can’t imagine what is. The Verge did a nice job of dissecting the jury verdict form pre-verdict, and concluded that a decision on the approximately 700 decision points would “not go quickly.” Turns out The Verge was mistaken; the jury was able to wrap things up in just over two days, awarding over $1 billion to Apple. They did this with the help of a jury foreman who had applied for and obtained a patent – the only juror who had even the slightest familiarity with patents before this trial. Do you think his (presumably) pro-patent views influenced the outcome in this case? Did Apple get really, really lucky? Could make a person wonder …. Jury verdict in Apple v. Samsung (on Groklaw)

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Noncompete Unenforceable Where Employer Changed Terms of Employment

September 2, 2012

A recent Massachusetts Superior Court decision holds, on summary judgment, that a company may not enforce a noncompete/non-solicitation agreement against a former employee when the former employer had materially breached the agreement by changing the terms of  employment. Specifically, the employer changed the employee’s job responsibilities and title, and cut his annual salary by $40,000. There’s nothing particularly surprising about this ruling, which is a reminder to employers that they can sacrifice the enforceability of a noncompete by materially changing the terms of an employment agreement. This can be avoided by entering into a new agreement containing the modified terms, something the employer in this case failed to do. Protege Software v. Colameta (Sup. Ct. Middlesex, July 16, 2012) ( Kirpalani, J.)

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