In an interesting trademark infringement lawsuit, a manufacturer seeks to prevent a reseller from using its trademarks to identify products the manufacturer actually made, but made for use and sale only outside of the United States. GN Netcom is a headset manufacturer based in Lowell, MA. It sells headsets under the brand names “Jabra,” “VXi,” and “GN Netcom.” GN alleges that the Defendant is a reseller of phone systems and headsets, both through its own website and through Amazon, eBay, and other online platforms. Defendants are said to sell, without authorization, GN headsets that it purchased from international resellers, and to use GN’s trademarks (and some GN copyrighted images) in the process. These products were designed and manufactured differently than GN products intended for sale in the U.S., are said to contain “material differences” (such as language differences in the interface, battery and voltage differences) from the U.S. products, and are not subject to GN’s U.S. warranty. GN further alleges that Defendant advertise U.S. versions of the GN products it sells, but then ships the international versions. GN brings counts for trademark infringement, unfair competition and false designation of origin. The case has been assigned to Judge Sorokin.
Judge Casper denied Defendants’ motion to strike or dismiss Lexington’s second amended complaint and also denied Lexington’s motion to strike Defendants’ affirmative defenses. Lexington brought suit in 2016, alleging infringement of U.S. Patent No. 6,936,851, which covers a semiconductor light-emitting device. Lexington asserts that Defendants infringe at least one claim from the ‘851 patent through sales of LED televisions. The case had been stayed pending inter partes reviews; Defendants sought to continue the stay to allow for subsequent IPR’s, which Judge Casper denied. He also denied the request to have the direct infringement count struck under the Twombly pleading standard, which alleged that Lexington had improperly “parroted” the claim language rather than pointing out with further specificity where each limitation of the asserted claim was found in the accused products. Judge Casper declined to “wade beyond the sufficiency of the Second Amended Complaint and into an assessment of [its] substantive merits.” So long as the specific products accused of infringement and the specific claims are identified and a description of how the products infringe are present, the complaint will survive a Twombly/Iqbal motion. Motions to dismiss induced and willful infringement claims were likewise denied, with Judge Casper stating that at this early stage, a plaintiff is not required to allege more than knowledge of the patent and of infringement.
Lexington’s motion to strike the affirmative defenses was a bit more interesting. Judge Casper noted that it remains in dispute whether Twombly and Iqbal apply to affirmative defenses. An example of the affirmative defense pled was that “one or more of the asserted claims of the ‘851 patent are invalid for failing to comply with one or more provisions of Title 35 of the United States Code, including, without limitation, one or more of §§ 101, 102, 103, and/or 112.” Lexington argued that this is too broad to provide adequate notice of the basis for the defense. Judge Casper found that, by specifying the statutory provisions and by referencing the IPR’s (and the art cited therein), the defense was sufficiently specific. With respect to defenses of waiver, laches, equitable estoppel, exhaustion or license, Judge Casper refused to apply a heightened pleading standard of Rule 9(b), which applies to allegations of fraud, and refused to strike the defenses at this early stage of the proceedings, without identifying any pled facts that would support such a defense. It appears that Judge Casper believes that the Twombly/Iqbal standards do not apply to affirmative defenses.
Altova GmbH and Massachusetts-based Altova, Inc., accused Romanian partnership Syncro Soft SRL of infringing U.S. Patent No. 9,501,456, titled “Automatic Fix for Extensible Markup Language Errors.” Altova asserts that Syncro Soft’s Oxygen XML Editor’s “Quick Fix” functionality infringes the patent. Altova alleges that venue in Massachusetts is proper because Syncro Soft is not a resident of the United States (and thus may be sued in any judicial district pursuant to TC Heartland) and that Syncro Soft is subject to jurisdiction because it conducts “substantial business” in the state, including at least part of its infringing activity.
Judge Young denied Micron’s motion to dismiss for improper venue, finding Micron had waived a venue challenge by not raising it in its initial Rule 12(b)(6) motion. It is noteworthy that Harvard’s opposition was based solely on waiver, and that Harvard did not argue that venue was proper under TC Heartand. Micron asserted that its venue challenge was not available as of its initial 12(b)(6) motion, because TC Heartland had not yet issued. Judge Young noted, however, that TC Heartland merely reaffirmed a previous Supreme Court decision on venue, and that the defendant in TC Heartland had (ultimately) successfully mounted a venue challenge in the face of countervailing Federal Circuit law. Accordingly, Micron was found to have waived its venue argument by failing to raise it earlier.
Judge Saris denied Intellectual Ventures’ motion to lift a stay pending inter partes review of the three patents in suit. While not all asserted claims are subject to review, Judge Saris noted the significant overlap between the issues before the Patent Trial and Appeals Board and those in litigation. She noted that the plaintiff, a non-practicing entity, will suffer no undue hardship by the delay, and also noted that the litigation was in its infancy with no trial in sight. Intellectual Ventures did receive some solace – Judge Saris indicated that she would not stay the case for IPR’s filed by non-parties unless all defendants agree to be bound by the results of the IPR, would not wait for all IPR’s to be fully resolved, and would not stay pending appeal of the IPR’s.
Judge Young is known in this district for keeping his cases moving. He lived up to that reputation last week, issuing an order denying a motion to continue a bench trial regarding claims of patent infringement based on the filing of an Abbreviated New Drug Application (ANDA). Three days of trial had occurred in March, at which point the Abhai discovered that certain of the tests, the results it had produced in discovery, had been incorrectly performed. Abhai moved to amend its pretrial memorandum to include eight additional exhibits related to the faulty nature of the testing; Judge Young granted the motion but suspended the trial to permit discovery on this new evidence. Shire LLC v. Abhai LLC (15-cv-13909). With trial set to resume in early September, Shire moved for a further continuance of the trial to permit the discovery of new evidence that Shire asserted was relevant to the issue of infringement. One week prior to Shire’s motion, the FDA refused to approve Abhai’s ANDA and directed Abhai to redo all bioequivalence testing on newly created batches of product. Shire contended that the prior product, on which all existing evidence at trial was based, might not be representative of the product that ultimately is approved for sale. Judge Young denied the motion, citing the profound public policy reasons favoring expeditious adjudication of claims brought under the Hatch-Waxman Act (although he declined to identify any in his order).
Silkeen LLC filed suit in the District of Massachusetts yesterday, alleging that Zoll infringes U.S. Patent No. 7,944,469, titled “System and Method for Using Self-Learning Rules to Enable Adaptive Security Monitoring. Silkeen identifies itself as a Texas limited liability company with a principal place of business in Plano, Texas, a common location for non-practicing entities, leading me to believe that in years past, this suit would have been filed in the Eastern District of Texas. Silkeen alleges that Zoll infringes the ‘469 patent through its making and selling of monitor defibrillators, specifically Zoll’s “R Series Monitor Defibrillators.” Many of the allegations relating to specific limitations being found in the Zoll product are “on information and belief,” suggesting that Silkeen has not thoroughly analyzed the accused product.
Silkeen appears to be a non-practicing entity whose business consists solely of bringing infringement lawsuits. An internet search turns up no information on the company other than a series of infringement suits involving the same patent against twenty-six other entities. All twenty-two of Silkeen’s filings prior to 2017 (and thus prior to TC Heartland’s limiting of venue in patent lawsuits) were filed in the Eastern District of Texas. I further note that Silkeen is represented by Ferraiuoli LLC, the same Puerto Rican law firm that sued FitnessKeeper on behalf of Venus Locations LLC, another Plano Texas non-practicing entity, on August 17th.
Stellar Records, LLC sued David Pantano for copyright infringement related to the manufacture and sale of music and karaoke recordings. According to the complaint, Stellar Records obtains the rights to a large number of songs, which it then re-records without lead vocals and connects to video files containing the lyrics. Stellar then compiles these karaoke versions of songs into packages, which it sells to karaoke disc jockeys. Stellar alleges that Pantano copied several of these packages and sold them via Craigslist. Both direct and contributory copyright infringement are alleged.
Judge Zobel issued a preliminary injunction and seizure order preventing bootleg sales of concert merchandise. The concert promoter for Coldplay filed suit prior to Coldplay’s August 4th concert at Gillette Stadium in an attempt to deter counterfeiting related to merchandise bearing various “COLDPLAY” registered marks. Judge Zobel noted that numerous defendants had been served with the complaint at the Gillette show but had failed to appear for the hearing on the motion for preliminary injunction. The order prohibits the defendants from using the band’s trademarks on any merchandise or from aiding or inducing others from using them, and further orders the U.S. Marshal for any district in which the Plaintiff seeks to enforce the order to seize and impound all infringing merchandise being offered for sale in within ten miles of any Coldplay concert for a period of time from six hours prior to the concert to six hours after the show ends. While the injunction came too late to help the band (and the concert promoter Plaintiff) in Foxboro, it should serve to protect them on the remainder of their shows in America.
It is interesting to note that Coldplay is no stranger to intellectual property lawsuits, having itself been sued by guitarist Joe Satriani for infringing the copyright in his instrumental song “If I Could Fly” through Coldplay’s hit “Viva la Vida” (a comparison of the two songs can be found here). That case settled out of court in 2009.
In an August 24 order, Magistrate Judge Dein recommended partially granting plaintiff’s motion for default judgment of willful copyright infringement because the well-pled factual allegations of the complaint supported summary judgment, and the defendant’s absence, after having answered the complaint and knowing of the allegations, could be construed as acknowledging the truth of the allegations. The case involves a verbal agreement between two inmates to make a documentary film, titled “Word From The Joint,” designed to influence youths to avoid gang life. The agreement provided that the two would work together to make the film, and that the defendant, who was to be released before the plaintiff, would take the plaintiff’s instructions regarding distribution of the film. Once out, the defendant published the film on YouTube without having been told to do so, and then ignored Pope’s request to take it down. Regarding damages, Judge Dein denied the $50,000 award sought and instead recommended statutory damages of $5,000. This recommendation was because, even upon obtaining default judgment, the plaintiff is still required to prove actual damages, and Pope was unable to provide evidence of $50,000 in actual damages. The amount awarded was based on a review of the sales and rental prices that the film had obtained, and the limited number of times the film had been viewed on YouTube. Finally, Judge Dein recommended the Court enter a permanent injunction preventing the defendant from further distributing the film and requiring all steps be taken to remove it from YouTube. (Update – as of August 30, 2017, it no longer appears on YouTube).