In a series of consolidated cases (discussed further here and here), a large number of Boston-area cab companies accuse Uber, as well as Uber founders Travis Kalanick and Garrett Camp, of unfair competition in violation of Massachusetts state and common law, and some of the plaintiffs further allege that Uber violated state and federal antitrust law, interfered with advantageous business relationships, engaged in civil conspiracy and aided and abetted unfair competition. Kalanick and Camp both moved to dismiss the claims against them as individuals. Judge Gorton granted this motion, finding that the plaintiffs had failed to allege specific facts demonstrating either general or specific jurisdiction – the complaint alleged only that the two formed Uber while in California and that Uber had undertaken activities in Massachusetts, but failed to identify any activities the individuals, as opposed to the company, had directed towards this forum.
As to the claims against Uber, Massachusetts passed a law in August 2016, the “TNC Act,” that pre-empts local municipalities from regulating ride-sharing companies like Uber, and the plaintiffs agree that this precludes Uber’s post-enactment activity. With respect to the pre-enactment activity, Judge Gorton found that, absent the TNC Act, Uber’s activities fell within the Boston municipal taxi regulations. Accordingly, allegations that Uber did not comply with the taxi regulations or incur the concomitant costs to gain an unfair advantage and cause economic injury sufficiently stated a cause of action for the statutory and common-law unfair competition claims. The court likewise denied the motion to dismiss with respect to claims that Uber conspired with its independent contractor drivers to violate the taxi rules. Judge Gorton allowed Uber’s motion to dismiss claims that Uber and its drivers, as an employer and employees (as opposed to independent contractors – it is not yet clear what status the drivers will ultimately be deemed to have held), conspired to violate the taxi regulations, because with the individual founders having been dismissed, this would effectively allege that Uber conspired with itself to do so, a claim that is untenable. Judge Gorton dismissed claims for interference with advantageous business relationships because the complaint did not allege interference with any specific anticipated business relationship, and the plaintiffs’ allegations regarding interference with people seeking for-hire ride services generally was not sufficiently specific. Finally, Judge Gorton also dismissed the antitrust claims. Those claims were based on a predatory pricing theory whereby a company sells products or services below its costs, hoping to drive competitors out of the market, at which point the company can raise its prices due to its monopoly position. The complaint did allege that Uber had lost “billions of dollars” (which seems to be accurate), but this was found to lack the particularity required of the antitrust laws.
Alamite Ventures, owners of a Russian-language internet video streaming service known as “TUA.tv,” filed an interesting lawsuit in the District of Massachusetts against a competitor Russian-language video streaming service, “eTVnet.” According to the complaint, eTVnet is populated with pirated copyrighted videos for which no license fees were paid, and advertises the service as legal and fully-licensed. Because of this, eTVnet can both offer content that the copyright owners do not license out, making the content unavailable to companies operating legitimately, and to offer lower prices as a result of not paying license fees. The complaint names eTVnet’s two owners and operators as co-defendants with the company, and use the multiplicity of defendants to assert claims of civil conspiracy, along with unfair business practices and false designation of origin/false or misleading representations of fact under the Lanham Act. It will be interesting to see if this complaint, which effectively argues for redress of harm resulting from infringement of third-party, non-plaintiff’s copyrights, can survive a preemption challenge under 17 U.S.C. § 301.
A class action complaint was filed against Eversource Energy and Avangrid, Inc., accusing the companies of manipulating the flow, and thus price, of natural gas into New England, with a resulting increase in the price of electricity. Both companies are accused of systematically over-ordering natural gas from the Algonquin gas pipeline, the biggest supply line into the region, and then cancelling a portion of the order at the last minute, making it unavailable for other electricity generators. Eversource and Avidgrid own companies that operate as Local Distribution Companies that allow them, through legacy contracts, to adjust orders of natural gas throughout the day without penalty; it is this possibility that enables them to order more gas than they expect to use and cancel portions of the order when the gas cannot be purchased and put to use elsewhere. The two companies are alleged to be the only two companies to operate large-scale natural gas and electric companies in the area, giving them unique capabilities for this type of behavior. The complaint alleges that this practice resulted in customers paying a minimum of 20% more for electricity than they should have, costing consumers $3.6 billion over a three-year period from 2013-2016. Plaintiffs bring antitrust claims as well as unjust enrichment and unfair competition under New England states’ consumer protection laws.
DR Media Holdings and its wholly-owned subsidiary, DealerRater.com, LLC, sued Saskatchewan resident Dan Robinson, alleged to be the founder and operator of Dealeradar, Inc., for trademark infringement. DR Media’s website, www.dealerrater.com, is asserted to be a leader in the field of automotive consumer reviews on dealers and service centers, while its subsidiary, DealerRater.com, offers online reputation management and monitoring services for automotive dealers. DR media alleges that the defendant also offers reputation management and social media services for automobile dealers under the DEALERADAR name at its website, www/radaresults.com/automotive, and that it also owns the domain name www.dealeradar.com, which Mr. Robinson previously used for the business and which, since being notified of DR Media’s rights, redirects users to the current site. DR Media further alleges that Mr. Robinson falsely uses the trademark registration symbol ® in association with the DEALERADAR mark, despite not having a registration. Aside from trademark infringement, DR Media brings claims for false designation of origin, unfair competition, and violation of the Massachusetts Consumer Protection Act (Ch. 93A).
Global Protection, a condom and reproductive health aid manufacturer, sued Sooka for declaratory relief relating to ownership of intellectual property connected with prophylactic dams. According to the complaint, Global purchased the assets of Glyde Health Pty. Ltd. in 2015, including the rights to Australia’s Glyde Health’s prophylactic dams, the associated trademarks and goodwill, and associated 510(k) Premarket Notification FDA submissions and supporting documentation. The FDA’s Premarket Notifications had been issued in the name of Glyde Health’s former U.S. distributer, Glyde USA, Inc., who is alleged to have transferred them to Glyde Health in 2014. Sooka, a customer of Glyde USA who resold Glyde products, entered into an agreement with Glyde Health to distribute condoms, but not prophylactic dams. Over the course of several months in 2015, Sooka sought to purchase rights to the FDA Premarket Notifications from Glyde Health as part of a bid to obtain North American rights to the product; the negotiations fell through, however, and Global purchased U.S. rights to the product in October 2015. At that point, Sooka claimed that it had acquired the rights to the product directly from Glyde USA prior to the transfer to Glyde Health. Both parties filed for trademark protection on SHEER GLYDE DAMS, with Sooka receiving the registration. The suit was filed after Global received a cease and desist letter from Sooka. Global seeks a declaration that it is the sole owner of the Premarket Notification, that it received the legal rights to the SHEER GLYDE DAM mark, and that it has not infringed any valid Sooka mark, as well as findings of unfair competition, unjust enrichment, and conversion.
Headset manufacturer GN Netcom accuses electronics reseller Online King of infringing its JABRA and VXI trademarks. GN’s factual allegations are similar to those of its September lawsuit against TelQuest International; here, GN alleges that Online King buys actual GN products manufactured and sold to the international market that were not intended for sale in the United States and that are materially different than GN products intended to be sold in this country. As a general rule, the resale of genuine trademarked goods is not infringement, under an “exhaustion” theory; this does not apply, however, when the accused party is selling goods that materially differ from those sold by the trademark owner. The importation of “gray-market” goods, foreign manufactured goods that bear a valid U.S. trademark but that are imported into the country without the trademark owner’s consent, fall within this exception; it is not immediately clear whether goods actually manufactured in America, and GN’s complaint does not make clear where its goods intended for foreign sale are actually made.
Asigra hired Atlantis to develop and provide software to Asigra, a project that was initially expected to take about a year. After agreeing to the terms for this work, Asigra sought to accelerate the completion of the project. Asigra indicated that it could only do so by incorporating code from Atlantis’ own appliance product. The parties orally agreed to Asigra receiving a limited right to use this code, with the parties disputing the consideration due Atlantis for this right. After completion of the project, when a dispute arose over payment, Atlantis “unilaterally revoked the nonexclusive license” and sued Asigra for breach of contract, trade secret misappropriation, and copyright infringement, among other things. Asigra moved for judgment on the pleadings on all counts. Judge Hennessy granted Asigra’s motion with respect to the copyright claims, while denying it with respect to the other claims. He determined that Atlantis had granted a nonexclusive license to the code by the parties’ oral agreement, which became irrevocable upon the payment of consideration by Asigra. The reasoning is that, upon payment of consideration (regardless of whether it was complete consideration under the agreement) a contract has been formed, and the remedy for the aggrieved party is through contract law, not copyright.
Also of interest, Judge Hennessy determined that Asigra waived its argument that the allegedly misappropriated trade secrets were not adequately identified by raising it only in a footnote; First Circuit case law holds that arguments raised perfunctorily or solely by footnote are waived. He also denied judgment on the pleadings with respect to Asigra’s Ch. 93A claim, finding that one party’s breach of contract for the purpose of gaining leverage over the non-breaching party has been deemed an unfair business practice in Massachusetts.