Chatham v. Canterbury Ventures, LLC (17-cv-11473).

Ex-Patriot Matt Chatham and his wife sued their former builder Daniel Lewis and his company, Canterbury Ventures in 2017, accusing Lewis of seeking to sell a house built using Chatham’s copyrighted custom architectural plans to a third party after failing to complete construction for the Chathams and then unilaterally terminating their agreement. Prior to the close of discovery, the Defendants moved for summary judgment on the copyright, breach of contract, and breach of the implied covenant of good faith and fair dealing claims, and further that specific performance was not available. The motion was argued before Magistrate Judge Cabell, who yesterday recommended denial the Defendants’ motion in its entirety. Defendants had argued that the copyright claim should fail because Chatham never reserved his copyrights when giving the plans to Lewis, and therefore could no longer claim copyright protection. Judge Cabell, noting that copyright vests at the time of creation, found this argument to have no legal consequences, because silence does not affect the validity of an existing copyright. He found that the First Sale Doctrine does not apply, because while the Chathams may have provided a copy of the plans and authorized the use to build the Chatham’s home, they did not sell the copyrighted article. Finally he determined that, while the Chathams’ Purchase and Sale Agreement licensed Canterbury to use the plans to construct the house, there was a factual dispute as to whether the scope of the license permitted construction of the house for sale to anyone other than the Chathams. On the contract issue, Judge Cabell determined that there was a factual dispute as to whether the P&S Agreement terminated as of the last closing date identified in the Agreement or whether there was an oral agreement to extend the Agreement to allow the home to be completed and sold to the Chathams. He noted that correspondence from counsel for the Defendants following the purported termination stating that “Canterbury continues to perform construction on the Property in good faith and in accordance with the P&S” and the fact that Canterbury continued working on the house in consultation with the Chathams following the purported termination date provided “strong if not dispositive evidence” that the parties had agreed to extend. Finally, he denied the motion with respect to the covenant of good faith and fair dealing and specific performance as they were reliant on success in the copyright and contract parts of the motion.

I and others at my firm, along with Paul Mordarski and Jordan Carroll of Morrissey, Hawkins & Lynch, represent the Chathams in this matter, and naturally, we are quite pleased with the result.

Intellectual Ventures I, LLC et al. v. Lenovo Group Ltd. et al. (16-cv-10860).

Judge Cabell granted in part Defendants’ motion to supplement the existing protective order to permit the designation of documents as subject to a patent acquisition bar. This designation would mean that any party or attorney with access to such a document would be prohibited for acquiring patents or applications relating to the same subject matter as the patents in suit, or advising client regarding the same, for a period of two years following the conclusion of the litigation. The motion was allowed as relates to defendant EMC Corporation, but denied as to Lenovo and NetApp. Judge Cabell identified Intellectual Ventures as being in the business of “monetizing patents through litigation and licensing campaigns,” and noted that the business had acquired close to 100,000 patents in its lifetime. After deciding that Federal Circuit law governed the issue, Judge Cabell rejected the majority approach, which required the moving party to first show an unacceptable risk of inadvertent disclosure of confidential information, on a counsel-by-counsel basis, if no bar is put in place, finding that this placed an unrealistic burden on the moving party and contradicted Federal Circuit case law. Instead, he determined that the burden of demonstrating the existence or absence of risk should be on the party who possesses that information, such that once a bar is in place, it is up to the non-moving party to seek exemptions from the bar on a counsel-by-counsel basis. Applying this standard, Judge Cabell found the risk that Intellectual Ventures’ counsel would be unable to compartmentalize the confidential information of EMC when subsequently advising their client on future patent acquisition and litigation. Judge Cabell limited the information that could qualify for this designation to confidential technical information, such as source code and schematics, and excluded confidential financial information from this protection. As to the Lenovo and NetApp defendants, Judge Cabell determined that they had failed to show good cause or a significant risk of inadvertent disclosure of their confidential information, and he denied them the use of the designation.