Articles Posted in Intellectual Property

On May 4, 2011, United States District Judge Claude M. Hilton of the Eastern District of Virginia issued an opinion rejecting a claim that LogMeIn Inc., a Boston-area computer-access company, had infringed a patent owned by Canadian competitor 01 Communique Laboratory Inc. Judge Hilton granted summary judgment of noninfringement for LogMeIn, finding that LogMeIn’s devices that permit a communication session between a personal computer and a remote computer cannot, as a matter of law, be construed to infringe 01’s patent, due to differences in the technology used by the competing devices.

In evaluating the patent claim, Judge Hilton reviewed the patent prosecution history and examined the way in which the Patent and Trademark Office and the inventor had previously described and understood the reach of the patent, including its limitations. The court found that LogMeIn’s product was dissimilar enough from 01’s intellectual property as to avoid any finding that infringement had occurred. Specifically, Judge Hilton found that 01’s patent, by its own admission, was to be limited to a system in which only a single device perform the multiple duties of the so-called “location facility,” including creating communication sessions, receiving a request for communication with the personal computer from the remote computer, locating the personal computer, and creating a communication channel between the remote computer and the personal computer. If several devices together performed those functions, the judge found, the patent’s claims were not implicated.

“The accused LogMeIn products do not have any ‘location facility’ that locates a personal computer and ‘itself’ creates a communication channel between a remote computer and the personal computer,” Judge Hilton wrote. “In briefing the Motion for Preliminary Injunction, 01 admitted that LogMeIn’s products function in precisely the manner that 01 told the PTO the ‘479LogMeIn Logo.jpg Patent does not cover – that is, by distributing the functions of the ‘location facility’ among different devices,” the judge added. No one component of the LogMeIn system itself performs all the needed functions of the “location facility” under the Court’s construction of the term, the judge noted.

What kind of expense amounts to a “loss” under the Computer Fraud and Abuse Act (CFAA), and did a Virginia litigation-support company incur the required minimum of $5,000 in losses when it investigated an alleged breach of its computer systems, retaining the services of both an attorney and a computer forensics company to aid with the investigation? That was the issue recently before Judge T.S. Ellis III of the Eastern District of Virginia, who held that the investigative activities could support a CFAA claim, even if the expenses were not paid in cash.

The issue was particularly important to the plaintiff, Animators at Law, a graphics and technology litigation support company, because of the 13 claims it brought against two former employees and a competitor, all but the CFAA claim were based on state law, meaning that without it, there would be no basis for federal-court jurisdiction.

The CFAA provides for a civil action against anyone who intentionally gains access to a computer without authorization and obtains information from it. The CFAA has a minimum jurisdictional requirement of $5,000 in losses. Animators at Law claimed screen.jpgthat its former employees conspired with a competitor to leave Animators’ employment and join the competitor, taking with them confidential and proprietary information about Animators’ services, projects, and clients.

A new line of women’s footwear now being sold by Yves Saint-Laurent has high-end French shoe designer Christian Louboutin seeing red. Louboutin’s companies, asserting that a new line of red Yves Saint-Laurent shoes violates their U.S. trademark, recently filed a trademark infringement suit in federal court in Manhattan against YSL. The lawsuit raises the interesting question: can a color be trademarked?

Louboutin’s trademark lawyers explain that the issue isn’t about ownership of a color so much as whether a shoe designer can have a proprietary interest in the use of distinctive red soles. According to the complaint, Louboutin first thought of the idea of painting the outer soles of his shoes red in 1992. Ever since then–for nearly two decades–every shoe in his collection has had that distinctive stylistic feature.

“Louboutin Footwear is instantly recognizable as a result of Plaintiffs’ trademark red outsole,” the complaint declares. “The location of the bright color on the outsole of a woman’s pump is said to provide an alluring ‘flash of red’ when a woman walks down the street, or on the red carpet of a special event.” The complaint provides a long list of louboutin_sole.jpgcelebrities who have worn the shoes and even includes two photos of the Carrie Bradshaw character on Sex and the City, played by Sarah Jessica Parker, wearing the shoes with the “alluring flash of red.”

Lacoste Alligator, S.A., which sells tennis shirts and other apparel with the distinctive green crocodile logo in high-end stores like Nordstrom and Saks Fifth Avenue, will get a chance to find out, through discovery in a lawsuit, which of its distributors (if any) have been selling its products to Costco and other warehouse stores without its express permission, in violation of its trademark rights and in breach of contract.

Lacoste, a Swiss company, is attempting to prevent its clothing from being sold in big-box and other unauthorized retail locations. The first problem facing Lacoste, however, was that although it believed that some distributor was making sales to those stores, it didn’t know who it was. Accordingly, it filed a “John Doe” complaint in Arlington County Circuit Court on trademark-infringement, breach of contract, and other grounds, hoping to use discovery in the case to ferret out the identity of the distributor responsible for the unauthorized sales. After filing the “John Doe” suit, Lacoste promptly served a subpoena on Costco Wholesale Corp., trying to ascertain the source from which it was receiving Lacoste products for resale in its stores. Costco objected to handing over any documents, and Lacoste filed a motion to compel compliance with the subpoena.

Judge Joanne F. Alper overruled most of Costco’s objections and held that Lacoste was entitled to the discovery subject to the entry of an appropriate protective order to prevent misuse of the information.

Apple Inc. has done very well with its App Store, a service that permits users to download programs of every type for use on their iPhones, iPods, iPads, and computers. With more than 350,000 software offerings, it’s by far the largest place online for people to get hold of the programs they want for their Apple devices. Apple’s trademark lawyers are now seeking to protect and enforce a trademark in the name “App Store,” a phrase they claim exclusive rights to, by filing a lawsuit in federal court against It claims Amazon’s “Appstore” is infringing upon Apple’s trademark. Amazon’s activities, Apple alleges, are causing irreparable harm to Apple, and Apple is trying to get an injunction and damages from Amazon.

The case raises a lot of interesting issues. First, is the term “app store” even subject to trademark protection? Generic terms like “grocery store” and “shoe store” generally cannot be trademarked because they merely identify the product or service being offered. If an “app store” is merely a store that sells “apps,” which is usually viewed as a shorthand term for computer applications or software, the courts may treat the term no differently than it would a proposed trademark for a “shoe store.” In that case, Apple’s efforts would fail.

On the other hand, Apple will no doubt contend that it has used the term “app store” exclusively since 2008 and has advertised it extensively – and thus that the term has acquired a “secondary meaning” under trademark law. That means that when consumers think of an “app store,” they think of Apple’s highly popular service. So if Amazon uses the term, the argument runs, consumers will come to the incorrect conclusion that Amazon’s “app store” is identical with the Apple service, and Apple’s business will be harmed.

Boston-area illustrator Jayme Gordon has filed a copyright infringement lawsuit in federal court in Massachusetts, alleging that DreamWorks stole his idea. The intellectual property lawyers who filed the complaint against DreamWorks point out a number of striking similarities between DreamWorks’ chubby, fighting panda and a panda drawn and copyrighted years ago by the plaintiff. The attorneys write that DreamWorks’ “Kung Fu Panda” and “Secrets of the Furious Five,” a short animated direct-to-video film, both “feature characters, character depictions, character personality traits, illustrations, expression, settings, story elements, plot and sequences of events that are unlawful copies and derivatives of the copyrightable elements embodied in Gordon’s Kung Fu Panda Power Work.”

To prove copyright infringement, it’s not enough to merely show that two works are very similar. The plaintiff will need to show not only substantial similarity between the copyrighted work and the alleged infringing work, but that DreamWorks, the alleged infringer, had access to the plaintiff’s copyrighted material. In this case, Mr. Gordon specifies exactly who at DreamWorks he believes had access to his panda illustrations at the time that Kung Fu Panda was being developed, and how they may have gotten into those executives’ hands.

Kung Fu Panda, released in 2008, features an overweight, food-loving panda named Po (voiced by Jack Black) who is trained in the martial arts by a small red panda named Master Shifu (voiced by Dustin Hoffman). The film grossed more than $630 million worldwide, and a sequel is coming out in May. Mr. Gordon claims that he first came up with the idea of a rotund Kung-Fu-pandas.jpgfighting giant panda named Kidd who loves to eat Chinese food and who learns the martial arts from a small red panda named Redd. His copyright attorneys write in the complaint that Gordon had a collaborator create sketches of these characters in the 1990s and that around the same time, he put the sketches on clothing that he sold in the Boston area. Gordon also alleges that he sent a portfolio of his work featuring these characters and others to several studios, including DreamWorks, but received a letter of rejection in 1999.

Does use of the name “Blingville” by a small game developer from Harpers Ferry, West Virginia, infringe the trademark rights of Zynga, creator of FarmVille? Does Zynga have a monopoly on Facebook applications ending in “ville”? Blingville has filed a declaratory judgment action in the Northern District of West Virginia to find out.

Zynga’s games have been extremely popular – and profitable – on Facebook in the last two years. The company says it has more than 295 million monthly active users on site for its six games — CityVille, FarmVille, FishVille, FrontierVille, PetVille, and YoVille. Blingville is just getting started with commercializing its game. It says another company, Overtime Apps, registered the domain name in October 2004 and that in November 2010, it filed a trademark registration application for the use of the name. Then, according to Blingville, Overtime Apps assigned its rights in the trademark to Blingville.

When Zynga got wind of what Blingville was doing, it sent several cease-and-desist letters to Blingville, claiming trademark infringement and threatening to sue for alleged violations of the Lanham Act. “Use of the name,” Zynga’s deputy general counsel told an online magazine, “is an obvious attempt to capitalize on the Blingville.jpgfame and goodwill associated with Zynga’s family of ‘ville’ games which includes FarmVille and CityVille. We are prepared to take all necessary steps to protect our intellectual property rights.”

Recovering damages for copyright infringement may be difficult in situations where the infringing party is “dummy” or “shell” corporation with no assets that can be used to satisfy a judgment. Sometimes, however, there may be a parent corporation or other entity that may be held liable on a theory of “vicarious liability.” As demonstrated by a recent decision of Judge Cacheris of the District Court for the Eastern District of Virginia, this doctrine may be utilized to pursue a contractor for the infringing activities of its subcontractor, even if the contractor knows nothing about the alleged infringement.

In Softech Worldwide, LLC v. Internet Technology Broadcasting Corp., Fedstore Corporation entered into a contract with the United States Department of Veterans Affairs (the “VA”) to develop various software, including software relating to the Digital-Media-Architecture (“DMA”) Pilot Project–a platform for scaling electronic media to various electronic devices. Fedstore subcontracted the work to Internet Technology Broadcasting Corporation (“ITBC”), who in turn hired the Plaintiff, Softech Worldwide, LLC, to perform various software services under the VA contract. Softech claims it performed these services from 2002 until early 2010, and that in early 2010, ITBC stopped making regular payments. Shortly thereafter, Softech claims it delivered the DMA source code and other proprietary information to ITBC at its request, and that ITBC refused to return the materials while continuing to use, maintain, and update Softech’s products.

Softech sued both ITBC and Fedstore for copyright infringement and violation of Virginia’s Uniform Trade Secrets Act. Fedstore moved to dismiss the case for failure to state a claim. Fedstore’s position was essentially that the claims pertained to actions allegedly taken by ITBC, not by Fedstore. Softech responded that Fedstore should be held responsible under theories of contributory liability and vicarious liability.

What is a trade secret? In Virginia, 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. (The full definition is provided in the Virginia Uniform Trade Secrets Act itself, found at Va. Code § 59.1-336). Judge Bellows of Fairfax County Circuit Court recently had the occasion to consider the extent to which vendor and customer lists may qualify as protectible trade secrets.

Tryco, Inc. v. U.S. Medical Source, LLC involved a dispute chiefly between Tryco, a small business authorized to sell medical and dental equipment to the United States government, and former employee Brian Thomas, who had left Tryco to join U.S. Medical Source, LLC (“USMS”), a competing firm founded by his sister-in-law. Prior to leaving, Mr. Thomas cleaned out his desk and copied his personal files onto a flash drive. In the process, however, he also (inadvertently, the court found) copied two Tryco documents, one containing a list of buyer contact information and other providing certain information regarding Tryco’s vendors. When accused by Tryco of stealing confidential information for the purpose of benefiting a competitor, Mr. Thomas promptly returned the entire flash drive, explaining that the copying was inadvertent and stating that he never copied the drive, never showed it to anyone at USMS, and never used it.

Tryco sued both Mr. Thomas and USMS for misappropriation of trade secrets. Tryco also brought claims for civil conspiracy under Virginia’s business conspiracy statute, breach of fiduciary duty, and tortious interference. After four days of trial testimony, the defendants moved to strike Tryco’s evidence as insufficient to state a claim. Judge Bellows agreed with the trade_secret.jpgdefendants the Tryco had failed to prove theft of trade secrets within the meaning of the Virginia Uniform Trade Secrets Act, and found in favor of the defendants on all counts.

Lawyers around the country have come to learn of the Eastern District of Virginia’s legendary “rocket docket.” With divisions located in Alexandria, Norfolk, Richmond, and Newport News, Virginia’s federal court is known as the most efficient in the country for handling intellectual property cases and complex business litigation. Also known for being friendly to business, trademark owners around the country often look for ways to establish venue in Virginia instead of a location closer to home where cases move at a slower pace. In the context of protecting trademark rights, one such opportunity can be found in the Anticybersquatting Consumer Protection Act.

The ACPA provides for a cause of action against those who register or use a domain name confusingly similar to, or dilutive of, the trademark of another. Enacted in 1999, the ACPA was designed to address the practice of “cybersquatting,” which generally involves the practice of registering a domain name containing somebody else’s name or trademark with the intention of either profiting from the resulting confusion or of selling the domain name to the less-Internet-savvy trademark owner. You could sue the individual in the jurisdiction of his residence, but what if that person lives in the District of Minnesota, one of the slowest federal courts in the country? Or what if the registrant took steps to shield his identity when registering the domain name and you can’t determine whom to sue?

One option available to you is to sue the domain name itself. And because VeriSign–the world’s largest registry and operator of the .com and .net top-level domains–is located in Dulles, Virginia, which falls within the jurisdiction of the Eastern District of Virginia, there is a good chance you can bring that action in the Rocket Docket, regardless of where the actual registrant resides. 49702_holding_a_dot_com_iii.jpg

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