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.

The Court held that: “Defendants’ use of “web celeb” as a television show award category and a section of an entertainment website is an objectively fair use of plaintiff’s “WEBCELEB” trademark. There is no genuine dispute that defendants’ use meets the classic fair use elements: (1) the use of the mark is not a trademark use; (2) the use is fair and in good faith; and (3) the use is only descriptive. Cairns v. Franklin Mint Co., 292 F.3d 1139, 1151 (9th Cir.2002).”
In doing so, the Court drew the following conclusions:
1. defendants did not use “web celeb” as a source identifier
2. defendants used “Favorite Web Celeb” as one of more than thirty-five awards, most of which follow the “Favorite [category]” scheme
3. “web celeb” is common parlance for Internet celebrities, which is precisely what the award is intended to recognize
4. defendants’ use of “web celeb” as part of a stylized “button” and a headline on defendants’ online magazine is also not a trademark use
5. defendants’ use of “web celeb” was merely descriptive of the magazine’s content
6. “Web celeb” headlined stories about Internet celebrities and the “Favorite Web Celeb” contest, much like the stylized “AWW” button denoted cute or “aww”-inspiring content
7. the prominent presence of defendants’ own trademarks and logos alongside each use of “web celeb” is another indication of a non-trademark use
8. difference between “web celeb” and “WEBCELEB” is “pivotal,” since “web celeb” has a common meaning that defendants intended to invoke
I would have thought this case would be closer than what the district court and 9th Circuit held in their opinions with regard to whether some of the above-identified uses were purely descriptive or arguably as a source identifier.  This is undoubtedly a victory for the trademark fair use doctrine and those who wish to use descriptive words consistent with their dictionary or colloquial meaning.  This would have been a very different case had defendants used the mark in connection with those services/goods covered by plaintiff’s trademark, namely “Providing temporary use of on-line non-downloadable software to enable uploading, posting, showing, displaying, tagging, blogging, sharing, or otherwise providing electronic media or information in the field of general interest over the Internet or other communications network.”  This case goes to show that when the descriptions that may allow a trademark to be registered in the first place are actually applied to the underlying goods/services, it may not be as distinctive or strong as it appears when simply viewing the TESS record.
Webceleb, Inc. v. Procter & Gamble Co., 12-56943, 2014 WL 448648 (9th Cir. Feb. 5, 2014).
 

Software Trade Secrets and Sanctions

On February 6, 2014, in Trade Secrets, by Brian A. Hall

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.

Homecare CRM, LLC v. Adam Grp., Inc. of Middle Tennessee, 952 F. Supp. 2d 1373, 1375-76 (N.D. Ga. 2013).
 

Holy UnIP: No Copyright Protection for a Blessing

On February 5, 2014, in Copyrights, by Brian A. Hall

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.

Pers. Keepsakes, Inc. v. Personalizationmall.com, Inc., 11 C 05177, 2013 WL 5348329 (N.D. Ill. Sept. 24, 2013).

 

 

 

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.

 

Laing v. BP Exploration & Prod. Inc., 8:13-CV-1041-T-23TGW, 2014 WL 272846 (M.D. Fla. Jan. 23, 2014).
 

UnIP in Austin, Texas

On January 21, 2014, in Uncategorized, by Brian A. Hall

Y’all,

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.

Thanks,

Brian

 

Public Domain…No Shit Sherlock

On December 30, 2013, in Copyrights, by Brian A. Hall

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???

Mobius Med. Sys., LP v. Sun Nuclear Corp., 4:13-CV-3182, 2013 WL 6498981 (S.D. Tex. Dec. 10, 2013).
 

UnIntellectual Property (UnIP): Copyright for Individual Photographs in a Compilation Registration

The United States District Court for the Northern District of California decided a question which is pending before the United States Court of Appeals for the Ninth Circuit in two cases: whether compilation registrations must list the names of individual authors for the underlying works to also be copyrighted.  In deciding that, yes, the names of the individual authors of the underlying works must be listed, the Court interpreted Section 409 of the Copyright Act, which requires that a registration application include the name of the claimant, the name of the author, and the title of the work.  As such, the court agreed with Defendant’s position that the registrations relied upon by Plaintiff to cover the photographs at issue, all compilation registrations, do not not validly register the underlying works because they do not comply with Section 409.  In particular, the “Court concludes that Pearson is entitled to summary judgment on these claims because while the photographs at issue were part of registered compilations, they were not themselves registered and therefore are not copyrighted, and MPI has provided no evidence to the contrary.”

This case highlights a relatively unsettled area of law with respect to registration requirements for compilations.  In fact, this case disagrees with The Copyright Office’s position that the registration of a collective work also registers any independently copyrightable works within the collective work.  As such, copyright attorneys would be well-served to ensure that the individual authors of any individual work within a compilation is listed, at least until the Ninth Circuit or United States Supreme Court says otherwise.

Muench Photography, Inc. v. Pearson Educ., Inc., 12-CV-01927-WHO, 2013 WL 6185200 (N.D. Cal. Nov. 19, 2013).
 

UnIntellectual Property (UnIP): Trade Secret for Customer List

The Supreme Court of Nebraska has clarified the difference between the Uniform Trade Secrets Act (UTSA) and Nebraska’s Trade Secrets Act (which interestingly enough was modeled off of UTSA but clearly not identical).  In this case, Plaintiff, a crop insurance agency, sued its former insurance salesperson and the competing insurance agency to which she went to work for, among other things, misappropriation of trade secrets.  In particular, the alleged trade secret was a customer list.

Defendant argued that the customer list was not a trade secret because it was “nothing more than each crop insurance client’s own insurance information, which was and is ascertainable by proper means and could never constitute a trade secret as a matter of law.” Plaintiff argued that the information was proprietary and valuable and that it was a trade secret. The Court held that because the customers’ identities and contact information were ascertainable from public sources, and because the other information on the list was also ascertainable by proper means, the customer list was not a trade secret.  In so holding, the Court heavily relied upon language not present in Nebraska’s Trade Secrets Act’s definition of a trade secret.  Under UTSA, a trade secret is something that derives independent economic value “ ‘from not being [generally] known to, and not being [readily] ascertainable by proper means by, other persons….’ ”  Nebraska’s, however, deleted the qualifiers “generally” and “readily” from the statutory definition, and in doing so narrowed the definition of a trade secret.  The Court recognized commentary that “[U]nder the literal terms of the … language, if an alleged trade secret is ascertainable at all by any means that are not ‘improper,’ the would-be secret is peremptorily excluded from coverage under the [Act].”  Thus, the Court analyzed whether the information on the customer list was ascertainable by proper means.

The evidence showed that simple Internet searches could identify which farmers farmed what land and could provide contact information for those farmers.  In addition, the Defendant also demonstrated that she could recite most of her customers’ information from memory.  Finally, the rest of the information on the list essentially reflected the farmers’ previous insurance coverage on their crops. “It is undisputed that the individual farmers had all of that information and that Arlene could have obtained the information from them through a simple telephone call.  Also, once a customer changed agencies, all of the customer’s prior insurance information became available from the insurance carrier’s Web site. Though the exact information required to transfer a customer is a bit unclear, the record shows that, at most, all that is required is the customer’s name, address, type of crops, and signature, all of which are ascertainable by proper means.”
Although reversing the lower court and finding in favor of Defendants as it relates to the misappropriation of trade secrets claim, and thus reducing the damages by $140,000, Plaintiffs still prevailed on its breach of contract claim to the tune of over $360,000.
First Express Servs. Grp., Inc. v. Easter, 286 Neb. 912 (2013).
 

A recent decision out of the United States District Court for the Eastern District of Pennsylvania highlighted an issue that is often confusing to clients, and possibly non-IP attorneys – the difference between a trade name and trademark.  It is generally understood that a trade name represents the name a company uses for business purposes and a trademark is the distinctive identifier of the source of particular goods or services.  However, can the identification of one versus the other affect a trademark infringement matter?  The short answer is yes.

This case involved the, Plaintiff, the owner of a registered trademark for EVERLINA LAURICE and common law trademark LAURICE in connection with fragrances generally, suing Defendants over its use of “Laurice & Co.” (Saks Fifth Avenue was a named defendant having sold the product).  The Court considered the likelihood of confusion factors in granting Defendant’s Motion for Summary Judgment.  In doing so, it included, in a footnote, that there is indeed a distinction between a trade name and a trademark which shall be considered as part of the overall likelihood of confusion analysis in a trademark infringement matter:

“Defendants assert that they are entitled to summary judgment pursuant to Rule 56 because the undisputed factual record shows that “Laurice & Co.” has only been utilized as a trade or business name, not a trademark, and thus negates the likelihood of confusion element required in Plaintiff’s various trademark infringement and unfair competition claims. See Defs.’ Mem. in Support of Mot. Summ. J., 6–8, ECF No. 83–1. The court agrees that the use of “Laurice & Co.” as a trade name rather than a trademark is a relevant consideration when evaluating likelihood of confusion, but rejects the suggestion that such a distinction is dispositive. While the use of Laurice & Co. in the context of a trade name may suggest that consumer confusion between the parties’ products is less likely, the inquiry does not end there.”

Ultimately, this Court questioned the strength of the Plaintiff’s marks since they corresponded to the personal names of the Plaintiff.  Combined with the fact that Defendant’s name was Laurice and questionable signs of actual confusion since Defendant’s use began over a decade earlier, the Court held that there was no cause of action here.  As such, Defendants prevailed and its use of the Laurice & Co., including as part of a domain name, was not actionable.

Harp v. Rahme, CIV.A. 12-02401, 2013 WL 6169561 (E.D. Pa. Nov. 25, 2013).