I often review decisions that detail an overzealous Plaintiff that claims certain intellectual property rights only to be rebuked by a court of law, thus ending up with UnIP and possibly even labeled as a bully. A relatively highly publicized case involving Facebook raises the question as to whether Facebook is (1) being overzealous with enforcement of its trademark (i.e. a trademark bully) or (2) acting as a trademark owner should in order to avoid a likelihood of consumer confusion, dilution, or other harm to its mark. Let me be clear, to date, there has been no decision that invalidates the FACEBOOK trademark and such a result is not possible in the context of the present dispute. However, whether Facebook is a trademark bully or an active and legitimate trademark enforcer is the question to be answered in a dispute involving a pet-themed social network called Facepets, who has applied for a federal trademark. You can learn more about the case from WIPR.
Let the debate begin…
Trademark Litigator Alert!!!
A recent case out of the U.S. District Court for the E.D. of Tennessee discussed an issue that should be of interest to any trademark litigator – the licensee estoppel doctrine. The Court, entertaining motions in limine, held that “equities weigh in favor of applying the doctrine of licensee estoppel with respect to the “invisible fencing” mark. Fido’s Fences must only rely upon post-termination evidence in demonstrating that IFI’s mark is generic.” Put another way, the Court found that it is not fair for a trademark licensee to be able to attack the trademark rights of the trademark licensor prior to or during the term of the trademark license. However, the Court did limit the doctrine and allow the trademark licensee to challenge the trademark licensor’s trademark after the termination of the licensee, just as any third party (with standing) can attach the genericness of a trademark. See below the most relevant language from the decision below:
The doctrine or theory of licensee estoppel provides that a licensee should be, in many cases, “estopped from claiming any rights against the licensor which are inconsistent with the terms of the license.” Westco Group, Inc. v. K.B & Associates, Inc., 128 F.Supp.2d 1082, 1091 (N.D.Ohio 2001). For instance, after obtaining the benefit of a trademark license but breaching the terms thereof, a licensee should not be able to “benefit from its own malfeasance” by “challeng[ing] a licensor’s ownership of a trademark.” Id at 1086–89; see also Big Boy Restaurants v. Cadillac Coffee Co., 238 F.Supp.2d 866, 873–74 (E.D.Mich.2002).The Supreme Court of the United States has done away with licensee estoppel in the patent context, but the doctrine remains part of trademark jurisprudence. Lear, Inc. v. Adkins, 395 U.S. 653, 674, 89 S.Ct. 1902, 23 L.Ed.2d 610 (1969); But see, Beer Nuts, Inc. v. King Nut Co., 477 F.2d 326, 328–29 (6th Cir.1973) (distinguishing Lear ).
The following from McCarthy on Trademarks is instructive:
Many courts have adopted a view of trademark license estoppel under which a former licensee may challenge the licensor’s title, but only on facts which arose after the license contract has expired. That is, the estoppel covers only facts which occurred during the time frame of the license. As to facts which occur thereafter, the exlicensee is in the same position as any other challenger of the validity of the mark. For example, the Trademark Board applied the licensee estoppel rule to prevent a former licensee of the REALTOR mark from challenging the mark as being a generic name for real estate agents. The facts on which the genericness challenge was based arose prior to and during the challenger’s 20 years as a dues-paying member of the REALTOR association.
Although this case did not result in a finding that the claimed copyright, an architectural design for a building, was not protectable as a whole, it is particularly enlightening because it drives home several important concepts for any copyright litigator, including:
1. Architectural works are entitled to “specific copyright protection,” which does have limitations, as set forth in the Copyright Circular for Copyright Claims in Architectural Works and discussed by this Federal District Court in Miami:
Architectural works, and other compilations, have “specific copyright protection” in that the copyright protects the exact work itself; only subsequent works which copy the work’s specific expressions and designs will infringe upon that protection. The precise expression in the plan which was submitted to the United States Copyright Office is the work which is protected. However, certain standard elements which do not comprise the expression are not protectable. For example, the Eleventh Circuit has held that there are a finite number of ways buildings such as condominiums, homes, and offices can be arranged and such arrangements are not protectable. See Intervest, 554 F.3d 914; Howard v. Sterchi, 974 F.2d 1272, 1276 (11th Cir.1992). This must be the case because, to borrow a phrase used by the Ninth Circuit in a photography case, “the range of protectable expression” is limited by the fact that the work is architectural. Ets–Hokin v. Skyy Spirits, Inc., 323 F.3d 763, 766 (9th Cir.2003).
A plaintiff cannot use copyright to control the right to unoriginal arrangements, and so the protection afforded architectural works must be specific. An architectural copyright is not “minimal” or “thin” because the copyright does protect what it was issued to protect, i.e. the plan submitted to the Copyright Office. A copyright of an architectural work is a full-fledged copyright which protects the specific expression embodied in the plan which was issued a copyright by the Copyright Office
2. The question of substantial similarity is ripe for decision at the Motion to Dismiss stage, and does not have to wait until Summary Judgment.
[T]he “substantial-similarity” test is more often correctly administered by a judge rather than a jury—even one provided proper instruction. The reason for this is plain—the ability to separate protectable expression from non-protectable expression is, in reality, a question of law or, at the very least, a mixed question of law and fact.
3. Although the entire expression of an architectural design may be protected as a copyright, “the number of condominium units per floor, the height of the building, and the height of the ceilings are not features over which Plaintiff, or anyone, could claim a valid copyright.”
4. Detail, detail, detail. What I mean by this is best evidenced by the analysis in this opinion. Simply put, even if the concept is the same, the expression is what counts, and how that expression is achieved is considered.
I love this decision because it is detailed and well-reasoned. It does, however, sound a bit unfair to the Plaintiff if indeed this was not a case of independent creation, but the facts are the facts. Architects, designers, and others would be well-served to understand the scope of their copyright rights, and this opinion provides a roadmap.
Sieger Suarez Architectural P’ship, Inc. v. Arquitectonica Int’l Corp., 13-21928-CIV, 2014 WL 585883 (S.D. Fla. Feb. 14, 2014).
UnIntellectual Property (UnIP): Trademark for “Web Celeb”
The United States Court of Appeals for the 9th Circuit affirmed a district court’s grant of summary judgment to defendants Procter & Gamble Co., Microsoft Corp., and BermanBraun, LLC, on plaintiff Webceleb, Inc.’s claims for trademark infringement under the Lanham Act and unfair competition under California Business & Professions Code section 17200. The thresshold issue was whether use of “web celeb” by the defendants infringed plaintiff’s registered trademark for WEBCELEB.
UnIntellectual Property (UnIP): Software Trade Secret
The United States District Court for the Northern District of Georgia struck plaintiff software developer’s action against competitor for misappropriation of the software developer’s trade secrets, and in doing so granted Rule 11 sanctions. As always, these trade secret cases are fact intensive. “Both develop customer-relationship management software and license it to companies in the home care or hospice industry. Homecare and PlayMaker each have a core software product and an add-on program that allows customers to access even more information. Homecare’s core product is “HomecareCRM,” and its add-on software is called “Harvest.” PlayMaker’s core product is “PlayMaker CRM,” and its add-on software is called “TargetWatch.” The programs, among other things, allow the parties’ respective customers to access and filter medical claims data in order to find potential clients. The parties’ current clash involves Harvest and TargetWatch.” Plaintiff’s position, as set forth in its Complaint, was that defendant “misappropriate[ed] significant portions of [Homecare's] proprietary software solutions, including the manner in which [Homecare's] software analyzes, compiles, presents and displays data on home health care referral sources, and using that information to design and develop competing software solutions.”
The Court applied Rule 11 and analyzed whether the trade secret misappropriation claim “(1) has no reasonable factual basis; (2) is based on a legal theory that has no reasonable chance of success and that cannot be advanced as a reasonable argument to change existing law; and (3) is filed in bad faith for an improper purpose.” The Court focused on documents within Plaintiff’s own possession, which showed that “Homecare accessed PlayMaker’s software in March 2012, several months before it filed this action, and used its access to put together a matrix that compared the features of HomecareCRM and Harvest with the features of PlayMaker CRM and TargetWatch. The final matrix was completed on April 12, 2012 and contains a section that compares only Harvest and TargetWatch. At the end of this section, there is a paragraph entitled “Intellectual Property Concerns” which concludes that Homecare had “no intellectual property concerns” about TargetWatch. Understandably, PlayMaker is baffled that Homecare then alleged in its complaint two months later that TargetWatch suggests or shows that PlayMaker misappropriated Harvest.”
Put simply, the fact that plaintiff’s own documentation had previously shown their knowledge of, analysis of, and determination that there was no legal issue was sufficient to warrant sanctions.
This decision highlights the risk of bringing a specious trade secret claim out of hate for another party. Courts will often look at what the party knew or should have known at the time of filing a Complaint. When documents without the plantiff’s possession are contrary to the position taken in the Complaint, it is hardly surprising that sanctions were awarded. Software trade secret misappropriation matters are complex enough without allegations of frivolousness.
UnIntellectual Property (UnIP): Copyright for a Blessing
The United States District Court for the Northern District of Illinois granted defendant’s motion to dismiss for failure to state a claim stemming from plaintiff’s copyright infringement lawsuit against defendant. Plaintiff produces gift items personalized with poetry verses for special occasions and then sells them on its website, www.poetrygifts.com. Defendant sells the same types of personalized gift items on various websites, including www.giftsforyounow.com. Plaintiff alleged that the defendant unlawfully used the verse “May the strength of the Holy Spirit be with you, guiding you every day of your life” on its merchandise.
The Court disposed of the lawsuit stating: “The short verse “May the strength of the Holy Spirit be with you, guiding you every day of your life” is too common and unoriginal to receive copyright protection in itself. The excerpt is a common expression of a blessing. The expression, “May the strength of the Holy Spirit be with you,” is of a kind with the common blessings “May the strength of the Lord be with you,” “May the Lord be with you,” or “God be with You,” which are widely used and decidedly not original to PKI. Blessings invoking the strength and guidance of the Holy Spirit are simply too ubiquitous to warrant copyright protection.” In doing so, it refused to find copyright infringement or any violation of the Digital Millenium Copyright Act (DMCA).
This decision, to me, comports with black letter law: no copyright protection in a phrase. See US Copyright Circular. I love the verse and blessing, and I wish better guidance would have been with it on that particular day.
UnIntellectual Property (UnIP): Trade Secret for Oil Spill Design Idea Disclosed
The United States District Court for the Middle District of Florida, in Tampa, granted Defendant BP’s Motion to Dismiss, among other things, Plaintiff’s claim for trade secret misappropriation of his “design for capping the oil well” following the BP Deepwater Horizon oil leak in 2010 in the Gulf of Mexico. BP had welcomed proposals from the public via its website to fix the leak. Plaintiff submitted one such proposal. In addition, Plaintiff discussed the design with the Port of Tampa engineers and presented his idea to the Lieutenant Commander of the U.S. Coast Guard. In doing so, Plaintiff allowed for collection of his drawings and other documents, as well pictures of his model, which were forwarded to BP. Plaintiff also sent a video presentation of a working model. Thereafter, BP confirmed that a similar approach had been considered. When Plaintiff sent a letter demanding renumeration, BP refused noting the countless proposals. Plaintiff sued under the Florida Uniform Trade Secrets Act (FUTSA), among other causes of action.
BP took the position that Plaintiff failed to take reasonable steps to protect the secrecy of his idea, with no documents marked or request for confidentiality by Plaintiff. Although Plaintiff argued that dismissal was not warranted given the claims in the Complaint, the Court held that ““Clear authority” holds that an idea is not reasonably maintained in requisite secrecy if disclosed to a government official without an accompanying mechanism to maintain secrecy…Accordingly, by unconditionally disclosing his idea to Laurion, Kirincich, and Carroll, Laing failed to “take reasonable efforts to maintain [the] secrecy” of his idea. Similarly, Laing failed to treat the idea as a trade secret when he directed Carroll to present the idea to BP and included no statement, written or verbal, that the idea should remain confidential.” As such, the Court dismissed the FUTSA count and held no trade secret existed due to lack of reasonable efforts to protect security (although dismissed without prejudice with leave to amend arguably).
Had Plaintiff taken the simple steps of marking documents Confidential and possibly requiring a Non-Disclosure Agreement (NDA), the litigation may still be ongoing, though it would remain to be seen whether what he submitted would be deemed to be not generally know. Yet another cautionary tale regarding the affirmative steps one must take to maintain secrecy, and thus be able to sustain a trade secret misappropriation lawsuit.
I have relocated to Austin, Texas with my current firm, Traverse Legal. I am now the managing partner of our Austin law office, which operates as Hall Law (for legal ethics reasons in Texas). I will be on the lookout for UnIP, but in the meantime, feel free to pass along any interesting decisions for my review and consideration for inclusion on this blawg.
UnIntellectual Property (UnIP): Copyright
Sherlock Holmes is now in the public domain and not protected by US copyright law, according to this Order from the United States District Court for the Northern District of Illinois. Plaintiff sought declaratory judgment that the characters, character traits, and other story elements from Sir Arthur Conan Doyle’s Sherlock Holmes stories are free for the public to copy. In granting Plaintiff’s motion for summary judgment, the Court held that pre-1923 story elements are in the public domain. More from The New York Times.
Klinger v. Conan Doyle Estate, Ltd., Case: 1:13-cv-01226 (N.D. Ill. Dec. 23, 2013).
UnIntellectual Property (UnIP): Trade Secret for Images in User Interface
The United States District Court for the Southern District of Texas has granted Plaintiff’s motion for preliminary injunction with respect to a claim for trade secret misappropriation. Plaintiff Mobius is a developer of software used in the field of radiation oncology, with its most commercially successful software product known as DoseLab. DoseLab provides quality assurance (QA) for all types of radiation oncology linear accelerators used in the treatment and imaging of cancer patients so as to enable those administering radiation treatments to ensure that the machine is operating properly and that the correct dosage is being delivered to the patient. The industry standards for the QA of medical linear accelerators are outlined in a report published by the American Association of Physicists in Medicine known as the Task Group 142 Report (“TG–142 Report”). TG-142 Report is the de facto standard for medical linear accelerator QA. Plaintiff Mobius entered into an exclusive software distribution agreement with Defendant Sun Nuclear, a privately held corporation and leader in the development manufacture, and sale of radiation measurement instrumentation and software. On September 10, 2013, Sun Nuclear released its own TG–142 solution software product. This lawsuit followed.
As is typical in software trade secret disputes, Plaintiff claims that Defendant has misappropriated its formulas, algorithms, reference images, example images, and configurations files. To illustrate how these trade secrets were misappropriated, Mobius presented testimony and evidence on the following features of DoseLab which it says that ImagePro copied: kV/MV imaging QA, multi-leaf collimator QA, MLC strip test, cone beam CT imaging, and starshot imaging. Sun Nuclear claims that many of these features are outlined in the TG–142 Report, “and their display is common to all similar software products that include TG–142 functionality.” In addition, Sun Nuclear points out that some of these features are merely “aesthetic elements and data displayed as part of DoseLab’s user interface.” Since a program’s user interface is publically visible, it cannot possibly constitute a trade secret, according to Sun Nuclear. Thus, again, according to Sun Nuclear, both the TG–142 Report and other third-party products which pre-date DoseLab provide these same features.
The Court, did not apply the new Texas Trade Secrets Act (TUTSA) but instead analyzed the six fact-intensive common law factors: (1) the extent to which the information is known outside of the business; (2) the extent to which it is known by employees and others involved in the business; (3) the extent of the measures taken to guard the secrecy of the information; (4) the value of the information to the business and to its competitors; (5) the amount of effort or money expended in developing the information; (6) the ease or difficulty with which the information could be properly acquired or duplicated by others.” Id. (citing In re Bass, 113 S.W.3d 735, 739 (Tex.2003)). It did so recognizing that “Mobius has stated repeatedly that it does not claim any trade secret protection in the user interface of DoseLab, but that DoseLab’s “algorithms, visualization techniques, example files, configurations and parameters for its kV/MV imaging functionality, MLC log functionality, MLC strip test functionality, cone beam CT functionality, flatness and symmetry functionality, and starshot imaging” qualify as trade secrets.” Tellingly, it did not find that the images in the user interface qualified as a trade secret, but was able to distinguish that from the algorithm and formulas, which it held could qualify as a trade secret. Ultimately, the Court held that the evidence “clearly reveals that Mobius’s proprietary information is entitled to trade secret protection until a determination on the merits.”
So, although the images in the software user interface may not be a trade secret, the algorithm and formulas may be, and were deemed sufficient for granting a preliminary injunction. Having litigated software trade secret cases, these are always fact intensive matters. I do not disagree with the order. Since I will soon be practicing primarily in Texas (Austin, Texas to be exact), I am happy to see quality analysis in what are always difficult cases. My gut tells me the fact that there was an underlying agreement between the parties did not hurt Plaintiff’s case at this early stage, even if the alleged trade secrets may ultimately be deemed not to be trade secrets and instead public domain. Perhaps a compilation trade secret position will be the Plaintiff’s strongest position in the end, regardless???