Microsoft Corp. v. Teratech Corp. d/b/a Terason et al. (17-cv-12038).

Microsoft sued Terason and its president, Alice Chiang, for copyright and trademark infringement, false designation of origin, and unfair competition related to allegedly pirated versions of Microsoft software being advertised and distributed by Terason. Microsoft alleges that Terason customers purchase the software without being aware that it is not legally licensed by Microsoft.  Terason manufactures color portable ultrasound equipment, and (according to the complaint) thousands of activations and attempted activations of Windows 10 and Windows 7 software occurred over the past six years from an IP address assigned to Terason.  The product keys for these activations were either used more times than authorized by the applicable license or were used to activate software outside of the region for which they were authorized.  Microsoft alleges that Chiang personally participated in or had the right to direct and control these activities and received a direct financial benefit from these activities, justifying personal liability either directly or under principles of secondary liability such as respondeat superior, vicarious liability and contributory infringement. The case is before Judge Gorton.

INBLF Annual Meeting

I am in San Francisco for the next few days, at the International Network of Boutique and International Law Firms (INBLF) Annual Meeting.  This is a vetted network of boutique law firms that together provide a full range of legal services, while providing the focus on client service that comes with a smaller firm that focuses on a particular area of law.  My firm, Lando & Anastasi, is the intellectual property firm of the Boston chapter of the INBLF.  I will be posting on IP events in D. Mass. while I am here, but the posts may go up later in the day than is typical.

Hybrid Audio, LLC v. ASUS Computer International, Inc. et al. (16-cv-10643).

Judge Zobel allowed Hybrid Audio’s motion to transfer this case to the Northern District of California and denied ASUS’ motion to dismiss.  The ASUS defendants are a Taiwanese corporation and its U.S. subsidiary, which is incorporated in and resides in California.  The parties agreed that venue in Massachusetts is no longer proper, pursuant to TC Heartland; the real action in this issue was ASUS’ desire that the case be dismissed, forcing Hybrid Audio to refile in California – as the asserted patent expired prior to the filing of the lawsuit, and ASUS’ first notice of infringement was on January 5, 2011, refiling would eliminate ten months of damages that were available pursuant to the six-year limit on damages set forth in 35 U.S.C. § 286.  Hybrid Audio sought to have the case transferred “in the interest of justice.”  Judge Zobel endorsed Hybrid’s motion, rather than authoring an opinion of her own.

Amax, Inc. v. ACCO Brands Corporation (16-cv-10695).

Judge Gorton issued a claim construction order in a case involving allegations that ACCO’s Swingline Quick Touch Full Strip and Quick Touch Compact staplers.

Swingline Stapler

In virtually each instance, Judge Gorton refused to read limitations into the claims and sided with Amax.  Of particular interest, Judge Gorton declined to consider whether the claims were indefinite at the claim construction phase of the litigation; as a part of this, it appears that Judge Gorton laid out an outdated legal standard for proving indefiniteness.  Under the Supreme Court’s 2014 Nautilis decision, indefiniteness exists if a patent’s claims, “read in light of the specification delineating the patent, and the prosecution history, fail to inform, with reasonable certainty, those skilled in the art about the scope of the invention.”  Judge Gorton’s analysis, however, asserted that ACCO must show that a “skilled artisan could not discern the bounds of the claim,” and that to be found indefinite, “the claim must be ‘insolubly ambiguous,’” citing to the Federal Circuit’s pre-Nautilis 2008 Halliburton Energy decision.  It should be interesting to see how this issue progresses.

True Value Company v. TrueValue POS, Inc. (17-cv-40135).

Hardware giant True Value Company (“TVC”) sued TrueValue POS (“TV POS”) for federal and common law trademark infringement, dilution and unfair competition. TVC is a member-owned cooperative made up of 4500 independently-owned and operated retail stores, thousands of which are known as TRUE VALUE stores.  TVC has registered TRUE VALUE for a variety of goods and services, including certain retail store services, indicia of membership in an association of retail hardware stores, provision of advertising services, wholesale purchasing services, and credit card services.  They have been using the TRUE VALUE mark since 1954, and assert that the mark is famous.  TVC asserts that TV POS began using the mark in 2013 or 2014 in its domain name (www.truevaluepos.com) in connection with Point Of Sale software and systems for restaurant, retail and credit card services.  TVC seeks injunctive, monetary damages and attorneys’ fees, as well as a finding that the case is exceptional pursuant to 15 U.S.C. § 1117, which allows for statutory and treble damages.

Small Justice LLC v. Xcentric Ventures, LLC (1st Cir. Oct. 11, 2017).

Plaintiffs Richard Goren, a Massachusetts attorney, his company Small Justice LLC, and Christian DuPont had sued defendants Xcentric Ventures, LLC and Ripoff Report.com for copyright infringement, libel, interference with a contract, and violation of Massachusetts’ unfair competition statute. Goren had represented DuPont in an unrelated matter; DuPont had subsequently authored two reports critical of Goren and posted them to Ripoff Report, a “consumer protection” website owned by Xcentric that allows users to post complaints about companies or individuals.  As part of the posting process, the user grants Ripoff Report an irrevocable exclusive license to the copyright, and further warns users that, once posted, the post will not be taken down even at the request of the poster.  When DuPont failed to appear in the libel suit that resulted, Goren was granted an injunction prohibiting DuPont from publishing the reports, and was awarded ownership of the copyright of the reports. He then filed the suit that is the subject of this appeal, seeking the enjoin Ripoff Report from continuing to post the complaints and to require them to take all actions necessary to have cached versions and links removed from Bing, Google, and Yahoo.

Xcentric moved to dismiss the complaint, which Judge Casper granted in part. Specifically, Judge Casper dismissed the libel, tortious interference, and parts of the unfair competition counts as blocked by the Communications Decency Act, 47 U.S.C. § 230, which shields interactive computer service providers from liability for information provided by another content provider.  The court rejected Goren’s argument that, by holding itself out as the copyright holder and by having “directed” internet search engines to list the postings, Ripoff Report itself became the information provider.  Following discovery, Judge Casper granted Xcentric summary judgment on the remaining copyright and Ch. 93A claims, finding the “browsewrap” license conclusive on the copyright claims.  Judge Casper modified the judgment to find that the browsewrap license failed to meet the requirements of transferring an exclusive copyright license, and that only an irrevocable non-exclusive license had been granted; this distinction did not, however, change the outcome.  Finally, Judge Casper awarded $124,000 in fees and costs to Xcentric pursuant to 17 U.S.C. § 505.

The First Circuit Court of Appeals reviewed the dismissal of the libel and tortious interference claims de novo and affirmed.  The § 230 immunity is to be liberally construed, to prevent deterrence of on-line speech; so construed, Xcentric could not be considered to be “responsible … for the creation” of the information, and immunity would apply.  Continuing to apply de novo review, the Court affirmed the copyright decision, rejecting Goren’s argument that the license “contract” failed because no consideration was given to DuPont – while consideration is necessary to support an irrevocable license, actually posting the complaints was sufficient consideration under the circumstances.  Notably, the Court determined that it need not decide whether a browsewrap agreement can satisfy the exclusive license writing requirement of 17 U.S.C. § 204, leaving this issue open in the First Circuit.

The Court reviewed the fee award for abuse of discretion. After quickly dismissing Goren’s contentions that Xcentric was not a prevailing party or that its fee motion was untimely, the Court looked to the Supreme Court’s Fogerty factors in analyzing the decision to award fees – “frivolousness, motivation, objective unreasonableness [both factual and legal] and the need in the particular circumstances to advance considerations of compensation and deterrence.”  Characterizing review of the application of these factors as “extremely deferential,”

The Court found no fault with Judge Casper’s characterization of the legal and factual basis for plaintiffs’ claims as “at best questionable,” with its noting that Xcentric fought the case for more than two years without the prospect of a damage award, or with its determination that Xcentric prevailed on all counts. Finally, the Court noted that a showing of bad faith on the plaintiffs’ part is not a requirement for a fee award pursuant to the statute.  The fee award was thus affirmed as well.

Philpot v. Kinder et al. (17-cv-11991).

Larry Philpot, a professional concert and event photographer from Indiana, sued Encore Unlimited, Inc., Printed Guitar Picks Limited, and numerous individuals for copyright infringement. Philpot alleges the defendants uploaded photographs he had taken of Carlos Santana, Neil Young, and Kid Rock, printing them on guitar picks, and advertising and selling them through their own websites as well as on Ebay.  He seeks liability for reproduction and public display, as well as for unfair and deceptive trade practices under M.G.L. Ch. 93A.  Philpot further alleges that the copyright infringement was willful, based (solely, it appears) on his allegation that the defendants tried to hide their identities by registering their domains under aliases.  A review of one of the defendant’s websites (www.printedguitarpicks.com) reveals that the company allows customers to upload pictures to be printed on guitar picks, while also offering stock pictures of various artists; it is unclear from the complaint whether the former or the latter are the subject of the suit.  For the latter, the website indicates that all customers submitting photographs warrant that they obtained permission from the copyright holder; it will be interesting to see whether this clause affects the willfulness decision.