Nike, Inc. v. Puma North America, Inc. (18-cv-10876).

Nike sued Puma for infringement of seven Nike patents covering shoes having knitted upper, and alleged that after it notified Puma about the patents prior to filing suit, Puma not only failed to cease making and selling the accused products, Puma also introduced new shoes to the market that infringed the patents. Puma moved to dismiss the claims with respect to two of the patents as directed to non-patentable subject matter, asserting that one was directed to the abstract idea of forming an outline pattern on a textile and does not disclose an inventive step towards achieving the outline pattern, and that the second is directed to the abstract idea of generating a visual pattern on a textile, which is nothing more than a non-patentable work of art. Judge Sorokin disagreed, finding that the claims, which were directed to tangible manufactured items (i.e., shoes) or to physical components thereof or methods of manufacturing the same, they passed muster under the first prong of the Mayo test as being directed to a statutorily provided category of patent-eligible subject matter. He further noted that, even if they did not, Puma had not met its burden of demonstrating by clear and convincing evidence that the claims lacked an inventive step that would meet the second prong of the Mayo test. Judge Sorokin also denied Puma’s motion to dismiss the willfulness charges, finding Puma’s suggestion that more must be pled than knowledge of the patent and continued infringement remained an open question (albeit one that other Massachusetts judges had found incorrect), but that Nike had sufficiently pled additional facts that would support a finding of willfulness.

Global Protection Corp. et al. v. Arthur et al. (18-cv-10966).

Global accused Eric Arthur and Marketing Sales Concepts of infringing its “ONE” mark and a design patent for condom packaging, and the Defendants moved to dismiss for lack of personal jurisdiction and improper venue, contending that they do no business in Massachusetts and never marketed or sold the accused condoms in the Commonwealth. Global responded that the defendants’ websites and social media presence, accessible in Massachusetts, supported jurisdiction and that the patent claim could be brought in Massachusetts under the “pendent venue” doctrine. Judge Stearns found that under TC Heartland, pendant venue cannot be applied to patent infringement claims (but note that at least one other Court has found that pendent venue is applicable to patent infringement claims); he decided, however, to transfer the entire matter to the Western District of Arkansas rather than to dismiss the complaint outright.

Oxford Global Resources, LLC v. Hernandez (SJC-12439).

Oxford, a Massachusetts LLC with places of business throughout the country, hired Jeremy Hernandez to work as an account manager in its Campbell, California office. Hernandez signed an employee Confidentiality, Non-Solicitation and Non-Competition Agreement that included an agreement that any disputes arising thereunder would be governed by Massachusetts law and that any lawsuit would be brought in a Massachusetts court. As a part of his employment, Hernandez was given access to the “Oxford Database,” a secure database of client information. After Hernandez left his employment, Oxford became aware that Hernandez was soliciting Oxford customers and allegedly had brought confidential information of Oxford to his new employers. After Oxford filed suit in Massachusetts state court, Hernandez moved to dismiss or transfer under the doctrine of forum non conveniens. The SJC first determined that California and not Massachusetts, law should apply despite the language of the agreement. Where a choice of law provision is executed, Massachusetts will uphold the provision unless it is contrary to public policy, which will be found where the application of Massachusetts law would be contrary to a fundamental policy of a state having a materially greater interest in the issue than Massachusetts and would be the law that applied in the absence of the choice of law provision. California has a settled policy in favor of open competition and employee mobility that, among other things, prohibits non-solicitation clauses and provides a statutory remedy to employees where an employer tries to enforce a non-competition or non-solicitation clause. Applying Massachusetts law would run contrary to this policy, and with the exception of Oxford’s place of incorporation, all relevant events occurred in California – Hernandez applied for the job, executed the agreement, worked for Oxford, and allegedly breached the agreement in California. Accordingly, applying Massachusetts substantive law would run afoul of a fundamental policy of California, and the SJC determined that the choice of law provision was unenforceable and California law would apply. Having so determined, the SJC next addressed the non conveniens argument, and held that an agreement to have suit brought in Massachusetts cannot preclude a non conveniens challenge as a matter of law. Noting that all relevant witnesses were in California and could not be compelled to appear in Massachusetts for trial , and that the case would involve interpretation of recently-passed California laws relating to employee agreements, the SJC decided that the California court would be in the best position to address the factual issues and consider the evolution of the interpretation of the new law, and dismissed the Massachusetts complaint so that it could be brought in California.

This case creates a new concern for multi-state corporations seeking to impose restrictions on employees in other states that, while acceptable in Massachusetts, might run afoul of the laws of the states in which the employees work.  Businesses should review the employment laws of states in which they employ people and consider whether a choice of law clause will be upheld in light of the SJC’s decision.

Maquet Cardiovascular LLC v. Abiomed, Inc. et al. (17-cv-12311).

After being sued for patent infringement by Maquet, Abiomed filed non-infringement counterclaims against Maquet its corporate parent, Swedish company Getinge AB. Judge Saylor granted Getinge’s motion to dismiss, agreeing that Getinge lacks standing to sue Abiomed and determining that this insulates Getinge from the declaratory judgment counterclaim. Judge Saylor noted that the counterclaim does not allege that a written agreement exists by which Getinge was given any rights in the subject patent, and absent a written transfer of rights, Getinge can have no rights in the patent. He refused to extend the doctrine of equitable title, stating that there is nothing inherently unfair or inequitable in a corporate subsidiary owning all rights in a patent or in the parent then exercising substantial control over the subsidiary that would require bringing the parent into the controversy. Accordingly, the counterclaim was dismissed as applied to Getinge (although it remains in place against Maquet).

Monsarrat v. Zaiger (17-cv-10356).

Jonathan Monsarrat filed suit in March 2017, alleging copyright infringement through Zaiger’s use of a photograph of Monsarrat that had been altered to suggest Monsarrat was a pedophile. The original claim was dismissed (twice)as time barred, as the complaint made clear that Monsarrat knew about the posting of the photograph as early as 2012. The proposed amended complaint sought to add defamation claims resulting from a republishing of the photograph along with a report that Monsarrat had been arrested for serving underage teens alcohol during a party at his apartment. Monsarrat alleged that this posting caused a potential investor in his video game company to withdraw. Unfortunately for Monsarrat, while no charges were ultimately filed, he actually had been arrested for serving alcohol minors, meaning that the statement was true. While a true statement can serve as the basis for a defamation claim if actual malice can be proven, if the maker of the statement subjectively believed the statement to be true, no claim can be had. Here, the story of Monsarrat’s arrest was published in the Boston Globe, providing reason for Zaiger to believe the story (which, of course, was technically true). Because of this, and because the proposed amended pleading did not resolve the statute of limitations issue, Magistrate Judge Bowler recommended that Monsarrat’s motion to amend his pleading be denied as futile. Judge Bowler granted Monsarrat’s motion for judgment on the pleadings and dismissed Zaiger’s counterclaim for misrepresentation of a copyright claim under 17 U.S.C. § 512(f). Zaiger’s counsel had previously withdrawn in light of Zaiger’s non-responsiveness to communications; Zaiger had since failed to show for a hearing or respond to an order to show cause why judgment on the pleadings should not be granted, which demonstrated a disregard of the court and the litigation.

Hillside Plastics, Inc. v. Dominion & Grimm USA, Inc. et al. (17-cv-30037).

Hillside owns a trademark registration for the design of its “Sugarhill Jug” plastic maple syrup jugs, and accuses Dominion of violating that trade dress. Dominion moved for judgment on the pleadings, on the grounds that the trade dress was invalid as functional.

Sugarhill Jug

The trademark application had, in fact, initially been refused because of functionality concerns, but Hillside was able to overcome the refusal with evidence of the many alternative designs for syrup jugs. Dominion, once a Hillside distributor, began offering the accused jugs in 2016. Magistrate Judge Robertson recommended denial of Dominion’s motion. She noted that, as the trade dress is registered and incontestable, Dominion bears the burden of demonstrating functionality. Further, functionality is a question of fact, and Dominion was unable to demonstrate through the pleadings that the designs were factually functional. Judge Robertson did grant Dominion’s motion to stay discovery pending appeal of her recommendation to the District Court judge.

Trust Safe Pay, LLC v. Dynamic Diet, LLC et al. (17-cv-10166).

Trust Safe alleges that the defendants misappropriated proprietary information relating to its diet product business and opened a competing company, Dynamic Diet, and that they copied portions of Trust Safe’s website without authorization. Trust Safe’s original complaint was dismissed without prejudice after Magistrate Judge Kelley determined that it failed to meet the Twombly pleading standards, laying out specific deficiencies in the pleadings and allowing Trust Safe the opportunity to amend its complaint. The new complaint again failed to properly plead ownership and pre-registration of a copyright registration as required by Federal copyright law. Instead, Trust Safe again failed to plead that it had submitted a complete application, along with the fees and deposit copy, to the Copyright Office, and failed to plead that it took any action prior to the filing of the lawsuit. While under First Circuit law an application is deemed to meet the preregistration requirement when it is received by the Copyright Office, an incomplete application cannot satisfy the preregistration requirement. Here, not only was the completeness of the deposit pled, the documents attached to the complaint suggested that the deposit was not complete as of the filing of the original complaint. I would note without comment that among the documents submitted there was reference to submitting the copyright applications via Legal Zoom, a dubious proposition where litigation is anticipated. Judge Kelley also found that the complaint failed to allege which elements of the website were actually subject to copyright protection, making it impossible to analyze whether the defendants copied protected material. Given that this was the second failed attempt to properly plead infringement, Judge Kelley dismissed the copyright claim with prejudice. She further dismissed the claims for trade secret misappropriation, fraud, and unfair and deceptive business practices without prejudice, declining to exercise supplemental jurisdiction over the state law claims with the sole federal claim having been dismissed.