Crane Security Technologies, Inc. et al. v. Rolling Optics AB (14-cv-12428).

Crane sued Rolling Optics, asserting infringement of five patents relating to micro-optics systems that project synthetically magnified images. They accuse Rolling Optics of infringing directly and inducing infringement through sales of micro-optic foils that are formed into 3-D holographic-style labels.  The patents cover planar arrays of image icons and focusing elements, with an optical spacer or substrate therebetween.  Judge Sorokin ruled in Crane’s behalf on a series of summary judgment motions filed by the parties.  He denied Rolling Optics’ argument that two claim terms were indefinite, finding that the claims, specification and prosecution history provided enough specificity to survive.  Instead, he sua sponte granted summary judgment that the terms are definite, despite Crane not having so moved, noting that the briefing provided adequate notice to Rolling Optics, there was ample discovery on the issue, and there were no factual disputes relevant to the issue.  Judge Sorokin denied summary judgment of invalidity over prior art, in part because assumptions of Rolling Optics’ expert regarding spacing of critical elements taken from figures in the prior art were disregarded because the prior art figures were not drawn to scale.  While finding the patents in suit were not entitled to claim priority to a provisional application that was not specifically referenced in the patent applications, Judge Sorokin denied summary judgment of invalidity due to the on-sale bar due to the existence of fact issues relating to whether potentially prior uses were experimental or were on-sale bars.  Summary judgment of infringement was granted as to certain products that Rolling Optics failed to provide evidence of non-infringement due to the low volume of potentially infringing sales, and as to other products on which Rolling Optics’ claim construction arguments did not prevail.  Rolling Optics’ motion for summary judgment was denied with respect to induced infringement, because the evidence laid forth a factual dispute over whether Rolling Optics knew that labels it sold were being applied to products sold in the United States.  Finally, Judge Sorokin found factual issues in dispute regarding the language of an early notice letter regarding the patents and denied Rolling Optics’ motion for summary judgment with respect to notice and damages.

Sophos Inc. v. RPost Holdings, Inc. et al. (13-cv-12856).

Sophos brought suit in 2013, seeking summary judgment that it did not infringe certain of RPost’s patents and that the patents were invalid. Only one patent remained in issue following last year’s claim construction decision in the case, U.S. 8,504,628.  The ‘628 patent covers third party verification of the content and delivery of electronic messages.  Following a hearing on December 7th, Judge Casper issued a decision on the 8th, finding the asserted claims invalid.  Sophos challenged the standing of RPost to pursue infringement claims because co-defendant RPost Communications Ltd. (RComm), RPost’s parent corporation, is the patent owner and no written license between RComm and RPost was produced and RComm’s corporate designee was unable to say with any certainty that RComm directly sold any software services in the United States.  Judge Caper denied the motion on standing, finding that the corporate designee’s deposition testimony that RPost was an exclusive licensee must be credited at the summary judgment stage, thus creating an issue of material fact.  As to validity, Sophos had asserted that the earliest priority date for the ‘628 patent was July 27, 2000, based on responses of RPost and RComm to an interrogatory.  While not finding RPost and RComm estopped from asserting a priority date back to 1999, based on provisional applications, she determined that Sophos’ argument had “introduced sufficient evidence” to put anticipation at issue, at which point the defendants had the burden of coming forward with evidence and argument to the contrary.  Because the defendants had put nothing in the record to show that the claims were entitled to rely on the provisional applications for priority, the July 2000 date was deemed to be the priority date.  The claims were then found to be anticipated by two patents that predated the July 2000 date but fell after the provisional filings.

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.

The Hilsinger Company v. Kleen Concepts, LLC (14-cv-14714).

Kleen Concepts was accused of infringing Hilsinger’s SHIELD mark by using the brand SHIELDME for its screen and lens cleaning products.  Hilsinger uses the SHIELD mark for lens cleaning products.  Kleen Concepts was also accused of misusing the phrase “Made in USA,” with Hilsinger contending that “significant components” of the products were manufactured abroad.  Kleen Concept’s motion for summary judgment of non-infringement as to its screen-cleaning products was denied, because the similarity of the marks and the products, combined with disputes of material fact as to the channels of trade and targeted customers, left material facts in dispute.  Judge Saylor further struck the portion of Kleen Concept’s reply brief that argued for the first time that products that had been re-branded with the (unaccused) mark KLEENME did not infringe, despite the continued existence of the SHIELDME mark on the interior of the packaging, refusing to allow new arguments not raised in the opening brief.  Judge Saylor also denied Kleen Concept’s motion for summary judgment on the false designation of origin claims, finding that (disputed) facts had been introduced that Hilsinger was actually harmed due to sales losses that coincided with buyer Wal-Mart’s initiative to increase sales of domestically-made products and evidence that a Wal-Mart buyer believed Kleen Concepts’ products were made in the USA.  Finally, Judge Saylor struck the portion of Kleen Concepts’ expert report that asked survey respondents to identify their “primary purchasing consideration,” because Kleen Concepts could not point to any evidence that the expert’s methods for determining this had been tested, subject to peer review, or otherwise scientifically validated.