Toddle Inn Franchising, LLC v. KPJ Associates, LLC et al. (D. ME. 18-cv-00293).

Toddle Inn, a franchisor of educational and day care service, sued former franchisee KPJ Associates in 2018, asserting breach of contract, Lanham Act unfair competition and trade secret misappropriation in connection with KPJ’s continuing use of the Toddle Inn marks and materials.  The parties were ordered to arbitration pursuant to the franchise agreement.  On March 31, 2020, following completion of the arbitration process, Judge Levy confirmed the arbitration award and deemed it a final judgment.  A writ of execution to enforce the judgment was entered on May 7, 2020, followed a day later by KPJ’s filing of an emergency motion to quash the writ and asserting that the judgment was not yet final, in that the time to appeal had not yet passed.  Judge Levy granted KPJ’s motion.  He determined that General Order 2020-2, which the Court had issued on March 18th in response to the COVID-19 pandemic and which extended all deadlines in civil cases by thirty days, applied to deadlines for appeals to the First Circuit.  This pushed the deadline for KPJ to appeal from the original April 30, 2020 date to May 30th, making the writ premature.  He rejected Toddle Inn’s contention that any extension of the deadline for appeal must originate from the First Circuit, noting that Fed. R. App. P 4, which governs the time for appeal, expressly permits district courts to extend the deadline.  Further, under that Rule, if a party moves to extend the deadline for appeal within 30 days of its passing and demonstrates excusable neglect or good cause, the deadline can be extended regardless of whether General Order 2020-2 automatically did so.  KPJ orally requested extension at a May 12th videoconference hearing, within 30 days of the initial April 30th deadline, and demonstrated good cause in that the plain wording of the General Order supported KPJ’s belief that the deadline had been extended.   Thus, either way, KPJ’s motion to quash the writ of execution would be granted.

Note – While this blog has thus far focused exclusively on intellectual property in the United States District Court for the District of Massachusetts, I am expanding the scope to cover northern New England (Vermont, New Hampshire and Maine) as well.  The name of the blog will remain the same.

Supreme Court weighs in on disgorgement of profits for trademark infringement and appealability of IPR institutions.

The Supreme Court has resolved a Circuit split and held that willfulness is not a prerequisite to disgorgement of defendant’s profits in a trademark infringement case.  Willfulness remains a factor to consider, but is no longer a threshold to obtaining profits.  You can read my summary of the case on the L&A website here.

This was not the Supreme Court’s only recent foray into the IP world.  Earlier this week, the Supreme Court determined that the decision of the Patent Office on the timeliness of a petition for inter partes review is  not appealable.  An IPR petition must be filed within one year of the service of a complaint alleging patent infringement of the subject patent.  Should the PTO accept a petition that the patent holder considers to have been untimely, the patent holder has no recourse through the courts as a result of this ruling.  My colleagues Craig Smith and  Peter Evangelatos provide more detail here.  

 

Also, a reminder that we at Lando & Anastasi are tracking the impact of COVID on the USPTO, prominent foreign patent offices, and the Copyright Office, as well as the impact on civil litigation in the Federal Courts of New England and the state courts of Massachusetts.  You can find this information, updated as new information becomes available, here.  

Larson v. Perry et al. (19-cv-10203).

Sonya Larson sued Dawn Dorland Perry, seeking a declaratory judgment that a story written by Larson did not infringe Perry’s copyright in a similar story, and sued Perry, her attorney and his law firm for defamation and tortious interference with contractual relationships when Larson’s publisher was threatened with a lawsuit if they continued to publish Larson’s story. Perry’s lawyer, Jeffrey Cohen, and his California firm, Cohen Business Law Group, moved to dismiss for lack of personal jurisdiction, which Judge Talwani denied. She noted that Cohen Law had sent letters to BFF in Cambridge, MA, alleging that Larson’s story plagiarized Perry’s letter and that publication would infringe on Perry’s rights, and threatened statutory damages of up to $150,000 should BFF publish. Larson alleges that this letter knowingly misrepresented both the facts and the law such that it constituted an unfair or deceptive trade practice under Massachusetts law and was designed to interfere with her agreement with BFF. As this behavior was targeted to a Massachusetts company for the purpose of affecting BFF’s business decision. This therefore is sufficient to establish specific personal jurisdiction.

Cohen and his firm also moved for dismissal on the grounds that, as a matter of law, their alleged conduct is shielded by Massachusetts’ litigation privilege. An attorney’s statements in the Commonwealth are absolutely privileged where such statements are made by an attorney engaged in his function as an attorney whether in the institution or conduct of litigation or in conferences and other communications preliminary to litigation. Where the communication is to a prospective defendant, however, the anticipated litigation must be contemplated in good faith, and does not allow a lawyer the freedom to act with impunity. While lawyers cannot be held liable for the contents of their speech, that speech can be used as evidence of misconduct, with the line between the two determined on a case by case basis. In this case, the complaint asserts that the Cohen letter was used to effectuate unlawful ends, rather than looking to establish liability based on the content standing alone, and Judge Talwani determined that the good faith of the Cohen firm could not be determined on the pleadings. Accordingly, she refused to dismiss based on litigation privilege.

Judge Talwani denied Perry’s moved to dismiss on the grounds that defamation was not properly pled and that Larson failed to plead actual malice, a requirement under Massachusetts defamation law when the plaintiff is a limited purpose public figure. The complaint identified instances in which Perry is alleged to have told several writing organizations, Larson’s employer, and a writing organization where Larson sought a fellowship that Larson plagarized her work, providing Perry with enough specificity to mount a defense. Regarding the “limited public figure” issue, Judge Talwani noted that while the issue is one of law, it is inherently fact-specific such that it cannot be determined on the pleadings.

Judge Talwani granted Perry’s motion to dismiss the tortious interference counts. The complaint alleged that, as a result of Perry’s conduct, two publishers decided to pull Larson’s story from their website earlier than call for by the contracts between Larson and the two. Ordinarily, this would be sufficient to survive a motion to dismiss. Here, however, the two contracts were included as exhibits to the complaint and could thus be fairly considered in determining the motion. In reviewing the contracts, neither included the promises alleged in the complaint that the story actually be published or remain on available for any particular length of time.

As a note, Judge Talwani denied Perry’s request for a hearing on her motion, finding that the coronavirus crisis combined with the Court’s determination that it could properly adjudicate the issue on the papers weighed against a hearing.

COVID’s Effects on IP – Further Update.

My firm has compiled and summarized the steps that various courts and governmental agencies in the Intellectual Property area have taken to try to minimize the spread of COVID-19.  I have posted about the things the Massachusetts courts have done, but please click here to see what the other New England Federal Courts, the USPTO, Copyright Office, and some of the international IP agencies are doing in light of the epidemic.