Virginia Business Litigation Lawyer Blog

"Grandma Got Run Over by a Reindeer" is one of the most popular holiday songs around and is played on radio stations across the country every Christmas season. It is also now the subject of contentious copyright litigation after a federal judge ruled recently that litigation over an allegedly unauthorized YouTube video containing audio of the song can continue despite the absence of a co-owner of the copyright.

Elmo Shropshire owns the copyright to the song along with Patsy Trigg d/b/a Kris Publishing. The copyright was registered with the U.S. Copyright Office on December 27, 1979. The defendant posted a video on YouTube--which has since been removed due to the pending litigation--which combined Christmas-related pictures with audio of a Canadian musical group, "The Irish Rovers," singing the Grandma song. Shropshire contacted the poster and requested that he either pay the licensing fee or immediately remove the video. The poster refused.

Shropshire filed a copyright infringement suit in federal court, but his first (amended) complaint was dismissed because, among other reasons, Shropshire did not name Trigg or Kris Publishing in the lawsuit. The court gave him permission to amend, however, and the second time around, Shropshire named Kris Publishing as a defendant, but Kris Published settled out and was promptly dismissed. The defendant then filed a motion to dismiss, claiming that Patsy Trigg d/b/a Kris Publishing was a necessary and indispensable party and thus the suit could not go forward without her. The Court disagreed.

In order to determine whether a party is "necessary" to the case under Federal Rule of Civil Procedure 19, the court held, courts must follow a three-pronged analysis. "First, the Court must determine whether an absent nonparty should be 'required to be joined if feasible' under Rule 19(a). . . .The Court 'must determine whether the absent party has a legally protected interest in the suit,' and if so, whether 'that interest will be impaired or impeded by the suit.'" Next, the Court has to make a determination about the feasibility of joining the absent party. The third and final step occurs only if joining the party is not feasible. In that case, the court must determine "whether in equity and good conscience, the action should proceed among the existing parties or should be dismissed."

The court ultimately found that Kris Publishing was not an "indispensable party" and allowed the suit to continue in its absence. The purpose of the joinder rule had already been satisfied by joining it to the case, despite the fact that it was later dismissed upon settlement.

In Virginia, employment is presumed to be at-will, but that presumption can be rebutted with evidence that the employment is for a specific period of time or that it can be terminated only for just cause. Virginia law says that contracts are to be construed as written and if the terms of the contract are clear, then those terms are to be given their plain meaning. A separate writing that is referenced in a written contract is construed as part of that agreement only if it is referred to with specificity and there is some expression of an intent to incorporate its terms into the agreement. As explained in a recent opinion by Judge Bruce D. White of Fairfax, "in order to incorporate the provisions of another document into the employment contract, the plain language of the employment contract must clearly reference and incorporate the terms of the document being incorporated."

Johnson v. Versar was a lawsuit brought by William Johnson, Alexis Kayanan and Davy Jon Daniels against their former employer Versar, a government contractor based in Springfield, Virginia, for alleged breach of their employment contracts. They claimed that their employment was not at-will but was for a definite term. They based their argument on the fact that they received certain documents upon accepting employment that referenced Versar's by-laws, which provided that officers "may be removed" by a majority vote of the board of directors. Because a resolution was never passed, they claimed that they were terminated in violation of their employment agreements.

Judge White sustained Versar's demurrer with prejudice and dismissed the case. The Court found that the plaintiffs were at-will employees because the by-laws were not specifically and intentionally incorporated into the employment agreement. None of the offer letters referenced the by-laws, and the accompanying documents that did reference the by-laws did not indicate any intent to incorporate their terms as part of the employment agreement.

The Court went on to say that even if the by-laws were incorporated into the employment contract, the language of the by-laws was not strong enough to overcome the plaintiffs' at-will status. The by-laws only provided for how an officer "may" be removed. The use of that permissive word indicates that the possibilities for removal were not intended to be exhaustive. The by-laws did not provide that the employees could be removed only for just cause or that their employment was for a definite term, so their employment was deemed to be at-will.

Does an employer have any sort of ownership interest in its employees' tweets or Twitter following? This very current social-media question may be tested in a lawsuit originally filed last July in federal court in California by PhoneDog, a South Carolina-based company that reviews mobile phones and services online, against former employee Noah Kravitz. An amended complaint in the case, filed on November 29, 2011, has attracted considerable media attention.

When Kravitz worked for PhoneDog as a product reviewer and video blogger from 2006 to 2010, he tweeted under the handle @PhoneDog_Noah and attracted some 17,000 followers for his comments and opinions on Twitter. When he left the company, he continued tweeting under the name @NoahKravitz. But he didn't create a new account with that name; instead, he kept the account (with all its followers) and just changed the Twitter handle to @NoahKravitz. Eight months later, PhoneDog sued Kravitz, alleging that his continued use of the account and his tweeting to his followers constitute a misappropriation of PhoneDog's trade secrets, intentional interference with prospective economic relationships, and conversion. Phone Dog said that it had suffered loss of advertising revenue as a result and that Kravitz "was unjustly enriched by obtaining the business of PhoneDog's Followers."

PhoneDog essentially claims ownership rights due to the fact that it directs its employees to maintain Twitter accounts and instructs them to tweet links to PhoneDog's website, thus increasing PhoneDog's page views and generating advertising revenue for PhoneDog. PhoneDog said in the complaint that since Kravitz now works for TechnoBuffalo, a competitor of PhoneDog, he is exploiting PhoneDog's confidential information on behalf of a competitor. PhoneDog is seeking $340,000 in damages -- $2.50 per month per Twitter follower for eight months. Although PhoneDog said in the complaint that "industry standards" peg the value of a Twitter follower at $2.50 per month, the company did not give a source for that estimate. Nor did PhoneDog attempt to distinguish between people who followed Kravitz because of his connection to PhoneDog and those followers who are merely friends of his or enjoy his commentary.

In my view, this would be a solid case if Kravitz was bound by a non-competition or non-solicitation agreement. The allegations are essentially that Kravitz took a list of 17,000 PhoneDog followers and is now soliciting business from them on behalf of a new company. Such conduct would normally violate a standard non-solicitation agreement. In the absence of a noncompete, the case is weaker but raises some interesting issues. It's not quite the same as the typical case involving theft of customer lists because, unlike in most of those cases, Twitter followers' identities are not private. Kravitz didn't need to assume control over the Twitter account in order to solicit business from those followers; doing so just made things easier for him. At a minimum, I think the intentional interference claim will stick. Kravitz should have started a new Twitter account and invited people to follow him there, not simply changed the name on the account. That's risky business.

In a dispute between two Virginia lawyers, a U.S. District Judge has rejected attorney Cynthia Smith's claim that another attorney, Timothy Purcell, interfered with her contract with a client and caused her to suffer nearly $4 million in financial losses.

Smith had been representing a Northern Virginia family, the Wieses, in a dispute with their neighbors. Eventually, the Wieses became dissatisfied with her representation and hired Purcell in her place. Smith sought her full $30,000 fee from the Wieses but ended up settling the fee dispute with them for $5,000. She and the Wieses signed a settlement agreement in 2009 that provided for a full release of all claims. Two years later, Smith sued Purcell over his role in representing the Wiese family, alleging that Purcell tortiously interfered with her right to receive the full payment from the client. She said that Purcell at one point promised her that he would ensure that she would be "paid in full" by the Wieses and that he reneged on this promise. She also claimed that she signed the settlement agreement under duress in that her "decision to trust God" led to a series of financial losses.

U.S. District Judge James Cacheris, in a December 9, 2011, ruling, rejected all of Smith's claims and dismissed the complaint. He turned down her motion for leave to amend her complaint, finding that any amendment would be futile because the facts before him did not state a cause of action. Judge Cacheris wrote that Smith's claims were barred by the release language in the settlement agreement that she signed in 2009 with the Wieses. In his ruling, the judge pointed out that the agreement extinguishes all claims that Smith might have not only with the Wieses but also with their attorneys. Judge Cacheris ruled further that Smith's financial distress at the time did not amount to legal "duress" that permitted her to avoid the provisions of the settlement agreement.

"There are no facts alleging that Defendant or the Wiese family exerted force, intimidation, or threats related to the offer to settle, and, in fact, there is evidence that they also offered to bring the dispute to mediation," the judge wrote. "That Plaintiff informed Defendant of her difficult financial position does not convert the offers to mediate and settle into coercion."

Judge Cacheris also ruled that even if it were not for the settlement agreement, Smith could have no claim against Purcell for interfering with her agreement with the Wieses. Purcell was their attorney and thus their agent, he pointed out - and Virginia law does not allow a claim for tortious interference by an agent with his principal's contract, since for this purpose the agent and the principal are one and the same entity. One cannot tortiously interfere with one's own contract. "Despite being an attorney, Plaintiff has remarkably missed the fact that the attorney-client relationship is one of agency," the judge wrote.

It's clear that dances composed by choreographers can be subject to copyright as creative works, just like paintings or photographs. It's also clear that no matter how creative a football player's evasive "spin move" can be, neither he nor his team can copyright it so as to prevent others from using it without paying royalties. What about a series of yoga poses? Where does that fit into the world of copyright? Three cases now pending in the U.S. District Court for the Central District of California involve that question, and although the issue remains very much in dispute, the U.S. Copyright Office has taken the view that yoga exercises are more like athletic activities or health regimens, which cannot be copyrighted, and less like dance routines, which can be.

In the lawsuits, Bikram's Yoga College of India, based in California, and its founder, Bikram Choudhury, have sued three yoga providers for copyright and trademark infringement, contending that they have unlawfully used the specific movements and poses of Choudhury's brand of yoga, known as Bikram Yoga. Bikram Yoga, performed for precisely 90 minutes in a room heated to 105 degrees Fahrenheit, has become quite popular in recent decades. Bikram Yoga includes 26 poses, two breathing exercises, and a carefully scripted dialogue.

Greg Gumucio is a defendant in one of the cases, along with the company he founded, New York City-based Yoga to the People. Gumucio is a former student of Choudhury. According to the complaint in that case, Choudhury "created an original work of authorship consisting of a series of instructions and commands that accompany, and correspond to, each poster of Bikram Yoga." This "original work is recited in a precise manner," according to the complaint, and the sequence of poses received protection from the U.S. Copyright Office on several occasions. Gumucio and the other yoga studio owners, Choudhury said, had infringed upon the copyrights.

Gumucio and his company replied that "Choudhury has no intellectual property rights in any method or posture," and that "the alleged 'Bikram methods' are utilitarian systems, incapable of copyright or trademark protection." Further, Gumucio replied, "there are no 'Bikram postures,' and each and every one of the yoga postures (or 'poses' or 'asanas') used in Bikram Yoga classes was developed and recorded hundreds, if not thousands, of years ago, and are in the public domain."

The defendants received very recent support from the Copyright Office. On December 9, 2011, Laura Lee Fischer, Acting Chief of the Performing Arts Division of the Copyright Office, wrote an email stating that "the Registration Program of the Copyright Office reviewed the legislative history relating to section 102(a) of the copyright law, and in conjunction with senior management, determined that exercises, including yoga exercises, do not constitute the subject matter that Congress intended to protect as choreography. Thus, we will not register such exercises (including yoga movements), whether described as exercises or as selections and ordering of movements."

This view represented an about-face from the office's previous position, which was that even if several yoga poses or exercises were in the public domain, the order in which they were to be executed could be copyrighted. Although the office's position is not binding on the U.S. District Court, it appears more likely now that yoga practitioners will be able to go ahead with their routines without fearing a copyright lawsuit.

The Virginia Supreme Court ruled on November 4, 2011, that membership in a Virginia limited liability company is comprised of two components--a control interest and a financial interest--and that only the financial interest is transferable by will when a member dies. Moreover, the court held that a devisee or assignee of a financial interest has no control interest in the limited liability company without becoming a member, just as a control interest in a partnership "cannot be bestowed on another by the unilateral act of a partner."

The financial interest involves only the right to share in the company's profits and losses and to receive distributions. It does not entail the right to participate in the management or control of the company's affairs.

In 1991, the Virginia legislature enacted the Limited Liability Company Act, creating the limited liability company as a hybrid entity, similar in some respects to a partnership and in other respects to a corporation. The statute provides that the transferability of a member's interest in an LLC should be similar to the transferability of a partner's interest in a partnership. Under the Uniform Partnership Act, the transfer of a partner's interest in a partnership entitles the transferee only to the financial rights, not the control rights.

The case arose after Admiral Dewey Monroe Jr. died in 2004. He and his wife, Lou Ann Monroe, had formed a Virginia LLC in which Dewey held an 80 percent interest and Lou Ann a 20 percent interest. The operating agreement provided that upon Dewey's death, Lou Ann would become managing member and Joseph Monroe would become the successor managing member. When Dewey died, it was discovered that his will bequeathed his entire estate to his daughter, Janet Ott. Janet asserted that this bequest transferred his membership in the company to her, including the right to control the company with the 80 percent interest. Acting on that assumption, she promptly called a meeting of the Company and proceeded to putatively remove Lou Ann and Joseph from their positions and elect herself as the Company's new managing member.

She then filed a declaratory judgment suit in Stafford County Circuit Court seeking judicial confirmation that her actions were legitimate. The court rejected her arguments, deciding that Dewey was "dissociated" from the LLC under Virginia law as soon as he died and that he had no authority to transfer the LLC control rights to her. The Virginia Supreme Court agreed with the court below, finding that Ms. Ott lacked authority to remove the LLC's managing member and successor managing member. "It was not within Dewey's power under the Agreement unilaterally to convey to Janet his control interest and make her a member of the Company upon his death because the Agreement could not confer that power on him," the court ruled.

Chanel, Inc., which like many other luxury-goods companies has been constantly plagued by counterfeiters, has taken its legal fight against unauthorized knock-offs to a whole new level. On November 14, 2011, acting at Chanel's request, U.S. District Judge Kent Dawson of the District of Nevada signed an order that not only prohibits hundreds of alleged trademark infringers from manufacturing or selling fake Chanel handbags, wallets, shoes, and the like - but also orders the defendants' domain names seized and transferred to the Web hosting company GoDaddy, which would direct them to a page describing the seizure. The temporary restraining order also orders that the counterfeiters' domain names be "de-indexed" by Google, Bing, Yahoo, and all social media websites, specifically mentioning Facebook, Twitter, and Google+.

Chanel, Inc. had filed suit against several websites for selling counterfeit versions of its merchandise. Chanel hired an investigative firm to purchase several items from three of the websites named as defendants in the lawsuit. The investigators then sent those items to a Chanel consultant who determined that the merchandise was not genuine Chanel. The consultant also examined other merchandise offered for sale on these websites and determined that none of the items offered were authentic Chanel products. The defendant websites were not authorized dealers of Chanel products and therefore were in direct violation of Chanel's trademark rights.

Chanel's trademark lawyers obtained this injunctive relief by, among other things, pointing out that counterfeiters use search engine optimization (SEO) just as legitimate companies do, and that it was necessary for the court to shut down their ability to use the Web to compete unfairly with Chanel. "Chanel does contend that it has the right to fairly compete for such search engine results space unfettered by unfair competition stemming from an illegal use of Chanel's trademarks," Chanel's lawyers wrote in the underlying motion.

But did the court even have the authority to cast such a wide net with its ruling? Facebook and Twitter, for example, have been ordered to de-index the infringing sites, but they were not even parties to the lawsuit. As the Ars Technica tech blog argues: "Missing from the ruling is any discussion of the Internet's global nature; the judge shows no awareness that the domains in question might not even be registered in this country, for instance, and his ban on search engine and social media indexing apparently extends to the entire world."

The court came down hard on the copycats and resorted to the extreme measure of attempting to have their existence scrubbed from the World Wide Web. The question now becomes whether it is the responsibility of the search engines and the social media sites to ensure that the offending websites do not show up as search results.

If a blog is successful and gains name recognition among the public, with whom is the brand associated in the minds of readers, the publisher or the primary author of the blog? Apparently not a lot of thought has gone into this interesting question, as the New York Times did not apply for a trademark for its popular "Motherlode" parenting blog until its primary author, Lisa Belkin, left the Times to create "Parentlode" at The Huffington Post. Now it will be up to the courts to determine whether the Times has exclusive trademark rights to the "Motherlode" name and similar-sounding derivatives.

The New York Times Co. sued the Huffington Post and AOL, its parent company, on November 4, 2011, in U.S. District Court in Manhattan, seeking both injunctive relief and damages. NYT's trademark lawyers argue in the complaint that the mark "Parentlode" is "clearly derived" from the Times' established "Motherlode" trademark and that it was "intended to create an association with Ms. Belkin's prior work" at the Times. According to the complaint, there is evidence that confusion already exists in readers' minds between the "Motherlode" blog, which the Times is continuing to publish, and the new "Parentlode" blog at the Huffington Post. On Twitter, for example, someone wrote (incorrectly, the Times argues) that "The NYT's Motherlode becomes HuffPo's Parentlode."

In her first "Parentlode" blog entry, Belkin referred to "Parentlode" as a "new name" that in a nonsexist manner includes fathers as well as mothers. The Times seized upon this statement and wrote that Belkin "clearly intended to create an association in the minds of readers between the two competing blogs, and further, [Belkin's] reference to the 'new name' was a deliberate attempt to mislead readers into mistakenly believing it was the same blog, albeit with a slightly different name and location."

Clearly, the Times has a strong argument that "motherlode" is a real word that has come to be associated with the widely read parenting blog published on its website. "Parentlode" does not exist in the English language and certainly seems to have been selected as a play on the Motherlode name. But if there is a trademark in the Motherlode name, who owns it? Trademark law is designed to permit consumers to identify the source of goods or services. The source of most of the articles on Motherlode was Ms. Belkin, and consumers may associate the name more with Ms. Belkin than the NYT. Still, the blog was published on the NYT's website and NYT alleges it came up with the Motherlode name and paid Ms. Belkin to write the content. From where I'm sitting, it appears the Times has a legitimate complaint.

Oleg Cassini was a French-born American fashion designer who created a wardrobe for Jacqueline Kennedy. Now, the company that he founded, Oleg Cassini Inc., finds itself embroiled in trademark litigation with Serta, Inc., over Serta's decision to name a particular mattress model the "Cassini."

The dispute arose when Serta unveiled a line of mattresses, to be sold exclusively at J.C. Penney stores, with names that were related to outer space. Among them were Gemini, Eclipse, Taurus, Moonscape, Nebula - and Cassini. Serta claimed that the name was inspired by Giovanni Domenico Cassini (1625-1712), an Italian-French astronomer and mathematician who was the first person to observe four of Saturn's moons. When the Oleg Cassini company found out about the existence of products such as the "Serta Perfect Day Cassini Firm Twin Mattress Set," it sent a cease-and-desist letter to the Serta company, declaring that it was "amazed" to see the Cassini name on the J.C. Penney website and stating that the mattress company does not have the right to use the "Cassini or Oleg Cassini" trademarks.

Serta responded by discontinuing the model immediately, but this was not enough for Cassini, the complaint contends. Cassini proceeded to demand that J.C. Penney ensure that no floor models (including close-outs) be sold under the Cassini name. In addition, Cassini threatened to sue for infringement if it did not receive "a reasonable offer of damages and a detailed plan for correcting the improper usage of the Cassini mark." Instead of offering to pay damages, Serta filed a declaratory judgment complaint in the Northern District of Illinois seeking a judicial ruling of non-infringement.

Serta's attorneys argue that Cassini "has no federal or common law trademark rights in the name "Cassini" in connection with mattress and/or bedding products" and that "there simply is no evidence that consumers were or would be confused as to the source, origin, affiliation or sponsorship of the Serta PERFECT DAY Cassini mattress model or that consumers would believe there was some connection with Oleg Cassini or his clothing or perfume line."

The online coupon industry, led by companies such as Groupon Inc., is growing rapidly, and it's still not clear which company or companies will end up the winners. With so much money potentially at stake, it's not surprising that firms are going to court to battle over their trade secrets. On October 24, 2011, Groupon filed a lawsuit in Illinois state court in Chicago, accusing two former sales managers of taking confidential trade secrets with them when they left Groupon for Google Offers, a website that competes with Groupon. Google developed the competing website after Groupon rejected its $6 billion merger offer last year.

The two men, Michael Nolan and Brian Hanna, both left in September 2011 to join Google. "In their new positions with Google Offers and/or Google, Hanna and Nolan will provide the same or similar services as they provided at Groupon," the complaint said. The two would "employ confidential and proprietary information that they learned while employed at Groupon," according to the complaint.

Trade secrets generally consist of commercial information that (1) derives independent economic value from not being generally known to, and not being readily ascertainable by proper means by, other businesses which would benefit from its disclosure; and (2) is the subject of reasonable efforts by the business to be kept secret. As examples of the "confidential and proprietary information" that the two allegedly took with them to Google, the complaint cites Groupon's deal history with merchants, the way in which Groupon structured such deals, the way in which Groupon identified merchants to participate in the deals, and Groupon's in-house sales Wiki that provided information regarding Groupon's sales practices and strategies.

Nolan and Hanna are likely to downplay the value of the information they took with them to Google. They might argue, for example, that it is not difficult or complex to learn how to target specific merchants or types of merchants with coupon deals, or that Google already has sufficient knowledge of online markets to figure out on its own how to target merchants.

In Virginia, "non-compete" agreements are enforceable if they are narrowly drawn to protect the employer's legitimate business interests, are not unduly burdensome on the employee's ability to earn a living, and are not against public policy. While Virginia courts have recognized that from a public policy perspective, businesses should be able to protect their client base from ex-employees who may leave their employ but continue in the same line of business, what is less clear is exactly which post-employment activities can be restricted before a non-compete becomes overly broad and therefore unenforceable.

The Virginia Supreme Court shed a little more light on the answer to this question yesterday, when it disagreed with itself and overruled Paramount Termite Control Co. v. Rector, 238 Va. 171 (1989). Relying on the precedent set by that case, Home Paramount Pest Control Companies, Inc. (the successor-in-interest to Paramount Termite Control) sued a former employee for breaching the same non-compete provision that was upheld in the earlier case. This time, however, the court struck it down.

The provision at issue stated as follows:

"The Employee will not engage directly or indirectly or concern himself/herself in any manner whatsoever in the carrying on or conducting the business of exterminating, pest control, termite control and/or fumigation services as an owner, agent, servant, representative, or employee, and/or as a member of a partnership and/or as an officer, director or stockholder of any corporation, or in any manner whatsoever, in any city, cities, county or counties in the state(s) in which the Employee works and/or in which the Employee was assigned during the two (2) years next preceding the termination of the Employment Agreement and for a period of two (2) years from and after the date upon which he/she shall cease for any reason whatsoever to be an employee of [Home Paramount]."

The court's main objection to these terms was with respect to the breadth of the activities being restricted, and that fact that it extended to activities that had nothing to do with the activity actually engaged in by the former employer. While the geographic scope and duration of the restriction and were reasonable, the clear overbreadth of the function element outweighed those elements and rendered the entire clause unenforceable.

The non-compete barred the former employee from "engaging even indirectly, or concerning himself in any manner whatsoever, in the pest control business, even as a passive stockholder of a publicly traded international conglomerate with a pest control subsidiary," noted the Court. Home Paramount did not have a legitimate business interest in preventing its former employees from owning stock in such corporations, so the provision was deemed overly broad.

Non-compete law in Virginia has evolved over the years. Blanket prohibitions against working for a competitor will not be upheld automatically, and often will be found overly broad. When a former employer seeks to prohibit its former employees from working for its competitors in any capacity, it must prove a legitimate business interest for doing so. In most cases, an employer is not going to be able to restrict its former employee from finding new employment with a competitor if the new job duties are unrelated to the tasks performed in the previous job.

A Lincoln-Mercury dealer in the Virginia Beach area has settled a lawsuit filed earlier this year by a former employee who claimed that she was subjected to a campaign of sexual harassment by the dealership's general manager.

On March 4, 2011, Carla Mercado, who worked as a car saleswoman until she was fired in March 2009, sued Lynnhaven Lincoln-Mercury Inc. for sexual harassment, discrimination and retaliation, asserting that Juan Lewis, the general manager, repeatedly groped her and made unwanted sexual advances and suggestions. On October 21, 2011, U.S. District Judge Raymond A. Jackson denied Lynnhaven's motion for summary judgment and its partial motion to dismiss the complaint. Faced with having a jury decide the merits of Ms. Mercado's claims, the parties mutually decided to settle the case on the courthouse steps, the day the trial was scheduled to begin.

According to the complaint, Lewis repeatedly made remarks of a sexual nature to Mercado on the job and asked her to have oral sex with him. On one occasion, according to the complaint, he told her that the only way she would get a promotion is if she performed that sexual act on him. At one time, the complaint reads, he forcibly kissed her. These comments and actions, the complaint says, "were an integral part of Juan Lewis's custom, business practice, and course of dealing with certain women at Lincoln-Mercury, while fulfilling his role as General Manager at the dealership."

Then, the complaint alleges, when Mercado rebuffed Lewis's advances, he and other employees of the dealership "commenced a campaign of retaliatory action" against her, including increasing her Sunday hours, rejecting her "deals" for vehicles and diverting them to other salespeople, and refusing to engage her in conversation. Ultimately, according to the complaint, she was terminated in retaliation for failing to comply with Lewis's sexual demands.

Mercado sued for hostile work environment sexual harassment, quid pro quo discrimination, retaliation, intentional infliction of emotional distress, assault, battery, and wrongful termination in violation of public policy. She sought damages of up to $5 million.

The dealership responded that Mercado was actually fired for not coming to work on Sundays and that it has a policy of treating unexcused absences as equivalent to a resignation. It also responded that at no point did the harassment affect a "tangible employment action" and that it was not sufficiently severe or pervasive to satisfy the law's requirements.

Timelines, Inc., a small Chicago-based Internet company, has lost the first round of its legal efforts to obtain a court finding that Facebook infringed on its "Timelines" trademark when it announced its much-ballyhooed new feature, "Timeline."

On Sept. 22, 2011, Facebook announced the "Timeline" feature, which will allow users to store and share their life events in chronological order on the site. Timelines, Inc., quickly filed a trademark infringement suit against Facebook, noting that it already has a registered trademark for the term "Timelines." This mark refers, among other things, to a website that allows users to record and share events and contribute descriptions, photos, videos, geographic locations, and links related to events and people.

Arguing that there was a significant likelihood of confusion between its existing online product and the one just announced by Facebook, Timelines filed its lawsuit in order to avoid, in the words of the complaint, "being rolled over and quite possibly eliminated by the unlawful action of the world's largest and most powerful social media company."

Timelines sought a temporary restraining order against Facebook's use of the term "Timelines," but on September 30, 2011, U.S. District Judge Edmond E. Chang denied the request. "Even assuming that Timelines has some likelihood of success, based on the present state of the record,...that likelihood is modest, and the other factors warrant denying the motion," Judge Chang wrote. "One question on the likelihood of success is the strength of the Timelines mark."

The judge ruled that even though Timelines had indeed been granted a federal trademark, that trademark is likely a "descriptive" one, since it simply "describes the service provided by Timelines' website, that is the creation on a website of a timeline for an event." Such "descriptive" trademarks are generally considered weak and do not enjoy the same protection as arbitrary or "fanciful" trademarks. The judge noted that if Timelines were to succeed in the litigation, it "would have to show that the term 'Timelines' has acquired a secondary meaning to customers such that they uniquely associate the term with the Plaintiff. On the current record, it is not at all clear that Timelines can make that showing."

Timelines may still be able to prove infringement, however, by focusing on the similarity between Timelines' website and Facebook's Timeline service. Consumers may be confused if the two services have the same name and do essentially the same thing.

A Swedish law firm has failed in its effort to sue a director of a former client for "misrepresentation" in Virginia federal court after the court ruled the claim was barred by Virginia's two-year statute of limitations applicable to negligence claims. The law firm had conceded that it would be unable to maintain a cause of action for fraud under the laws of Virginia, and the court opted to analyze the viability of the claim as a negligence action.

The law firm, Andersson Gustafsson Advokatbyra KB, sued eSCRUB Systems, Inc., a Virginia company, and three people associated with the company, claiming that eSCRUB had failed to pay the firm's legal bills after it hired the law firm in 2007 to help it resolve a dispute. The law firm alleged that John Packard, a former director of eSCRUB, committed fraud in that he breached a "continuing obligation to notify Andersson of the risks of non-payment it ran in performing services for eSCRUB." The allegation was essentially that Packard was part of a scheme to induce the law firm to provide legal services to eSCRUB with the full knowledge that the company would never pay the firm's legal fees.

In Virginia, negligence claims carry a two-year statute of limitations. Virginia follows the general rule that the event that starts the limitations clock ticking is the negligent act itself. There is no "discovery exception" that starts the clock at a later date, such as the date the plaintiff actually discovers that the alleged negligence occurred or that he has been damaged. Statutes of limitation can expire before a potential plaintiff even learns of the grounds for a lawsuit.

The judge found that the alleged injury occurred in December 2007, when the law firm's invoices first came due and eSCRUB refused to pay. The law firm contended that the injury occurred even earlier, in November 2007, when the law firm first started working for eSCRUB. The judge said that an alternative date would be May 8, 2008, when the law firm terminated its services to eSCRUB. But any of those dates are more than two years before the lawsuit was filed on June 8, 2010, so the claim was deemed time-barred and the court entered summary judgment for the defendant.

United States District Judge John A. Gibney, Jr., sitting in Richmond, Virginia thought so little of the well-publicized shakedown tactics of the new wave of "copyright troll" lawyers--in this case practiced by Richmond lawyer Wayne O'Bryan--that he took it upon himself (without any Defendant asking for it) to issue a show-cause order against the lawyer demanding that he explain why his conduct should not be punished with Rule 11 sanctions.

The subject of the lawsuit at issue is Gangbang Virgins, a pornographic film allegedly downloaded by 85 unnamed "John Doe" defendants using popular peer-to-peer network BitTorrent. The Court initially granted the plaintiff permission to issue subpoenas to Internet Service Providers to learn the identities of the people behind the accused I.P. addresses. Later, however, Judge Gibney was apparently moved by some of the letters he received from the John Doe defendants. Several of the defendants, for example, notified the Court that the plaintiff made harassing telephone calls to them as soon as their identities were revealed, asking for a payment of $2,900 to end the litigation.

What the Court found particularly troubling was the lawyer's behavior after certain defendants filed motions challenging their inclusion in the case. Rather than proceed to argue the merits of the motions in court, he routinely dismissed them, apparently to ensure the Court did not actually rule on any of the motions so that he could continue to threaten others. That, the Court found, amounted to nothing more than a "shake down" and an abuse of the Court's resources.

"The plaintiffs have used the offices of the Court as a means to gain the Doe defendants' personal information and coerce payment from them," the judge wrote. "The plaintiffs seemingly have no interest in actually litigating the cases, but rather simply have used the Court and its subpoena powers to obtain sufficient information to shake down the John Does."

Accordingly, the judge issued an order asking the plaintiffs' lawyer to show cause why his behavior did not violate Rule 11 of the Federal Rules of Civil Procedure, which specifies that anyone filing a complaint in federal court certifies that the complaint "is not being presented for any improper purpose, such as to harass."

Judge Gibney also rejected the plaintiff's attempt to join 85 unrelated defendants to a single piece of litigation. Rule 20 of the Federal Rules of Civil Procedure permits a plaintiff to sue multiple defendants in a single proceeding if their behavior arises out of the same transaction, occurrence, or series of transactions or occurrences. Here, the only thing that the 85 had in common was that they all had allegedly downloaded the same movie using the same peer-to-peer network and the same protocol. Accordingly, Judge Gibney ordered that only the first defendant remain in this case, while all others be severed.

"The mere allegation that the defendants have used the same peer-to-peer network to copy and reproduce the Work - which occurred on different days and times over a span of three months - is insufficient to meet the standards of joinder set forth in Rule 20," the judge found.