Permanent Injunctions for Non-Practicing Entities in Patent Cases

Many patent practitioners assume that non-practicing entities cannot obtain permanent injunctions in patent cases.  This is attributed to the belief that NPEs fail the four-factor test set out by the Supreme Court in eBay.  Given that belief, it is surprising for some to learn that a recent decision from the Northern District of California resurrected decade old case law indicating that non-practicing entities can get injunctive relief.  Practitioners having cases involving NPEs would do well to study this line of reasoning to be prepared for arguments surrounding permanent injunctions. Continue reading this entry

Insurers Must Pay Cost of Defending Case Stemming from Use of Famous Marathoner’s Name

Vibram – seller of the “FiveFinger” shoes – took an intellectual property insurance coverage dispute to the highest court of Massachusetts, and won. The Supreme Judicial Court of Massachusetts held that the insurers must pay Vibram’s cost of defending a lawsuit brought by the family of the late marathoner, Abebe Bikila.  Bikila earned his fame by winning the 1960 Olympic marathon barefoot.  The underlying lawsuit stemmed from Vibram’s use of the Bikila name for some models of its “toed” shoes.  According to the court, Vibram’s use of the Bikila name constituted use of another’s “advertising idea,” covered by the policies.

The heirs of Abebe Bikila’s estate brought the underlying action against Vibram in the United States District Court for the Western District of Washington. The family alleged a number of claims all stemming from Vibram’s use of Bikila’s name, including violation of the Washington Personality Rights and the Washington Consumer Protection Acts, false designation of origin and unfair competition under the Lanham Act, and unjust enrichment.  Vibram tendered defense of the case to its insurers.

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Challenging IPR Institutions Following Federal Court Decision in In re: Power Integrations Inc.

Practitioners should be aware that challenging the PTAB’s decision to deny institution of an IPR got even harder after a recent Federal Circuit decision.  While the Supreme Court has already made clear that challenges to denial of an institution decision can only happen in very specific circumstances, the Federal Circuit’s recent precedential decision in In re: Power Integrations, Inc., 2018-144, 2018-145, 2018-146, 2018-147 (Fed. Cir. Aug. 16, 2018) gives Cuozzo Speed Technologies, LLC v. Lee, 136 S. Ct. 2131 (2016) even more bite.

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False Food Advertising Claims Require Plausibility, Not Possibility

Earlier this year, in Is the “Food Court Closing, we reported indications of a change in the leanings of federal courts in California when viewing class action false advertising allegations regarding food and beverage products at the motion to dismiss stage.  For years, these courts were viewed as interpreting the sufficiency of the allegations in a manner favorable to plaintiffs.  During the past few years, however, these courts began viewing plaintiff’s pleadings more critically.  They have been applying a more stringent legal requirement of claim plausibility consistent with the United States Supreme Court’s. See Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007) (explaining that a pleading must “state a claim to relief that is plausible on its face”); Ashcroft v. Iqbal, 556 U.S. 662, 680 (2009) (explaining that the claim must be “across the line from conceivable to plausible” citing Twombly, 550 U.S. at 570).  Under the Twombly and Iqbal interpretation of the plausibility requirement, the false advertising plaintiff’s pleadings must make plausible that a significant number of reasonable consumers acting reasonably would be deceived by the alleged false claim. See Ebner v. Fresh, Inc., 838 F.3d 958, 965 (9th Cir. 2016) quoting Lavie v. Procter & Gamble Co., 105 Cal. App. 4th 496, 508 (2003).

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When Can a Company Be Liable for Its Vendor’s Copyright or Patent Infringement?: Hollywood Studios’ IP Headache

The case of Rearden LLC et al. v. The Walt Disney Company et al., Nos. 3:17-cv-04006, 04191 & 04192 (N.D. Cal.), has been covered more in the Hollywood Reporter than in legal publications, but it is both a “Hollywood story” and a case with intellectual property issues that cover the spectrum of patent, copyright and (to a lesser extent) trademark law. The case revolves around a technology called MOVA Contour Reality Capture technology (“MOVA Contour”) that is used to create 3D animated characters that appear more human than ever, as used in movies such as Guardians of Galaxy and many others. Some of Hollywood’s biggest studios hired a vendor, DD3, which used this 3D technology as part of the process of creating 3D characters in the movies. Rather than suing DD3 for any IP violations, however, the plaintiff, Rearden, decided to sue those Hollywood Studios for alleged copyright, patent and trademark infringement. The case thus illustrates various issues and considerations as to when a party can be liable for the acts of a vendor it hires, if the vendor is (allegedly) committing copyright and patent infringement.

For example, on the copyright side, because the Studios created CG characters and movies that were allegedly derivative works of the DD3 software’s output files, one question is whether, and under what circumstances, copyright protection of computer software can extend to the output files created using that software. Other copyright issues presented in this case include determining under what circumstances a party can be vicariously liable when it contracts with another company that infringes a copyright, or when this relationship can result in contributory copyright infringement.

With respect to patent infringement, the case raises a question as to whether a system claim can be found to be directly infringed by a party entering into a contract with a vendor, even when the vendor possesses all the elements of the claim since it owns and uses the requisite hardware and software. If only an indirect infringement claim is plausible for this situation, can knowledge of the patents and that the services constituted infringement be sufficiently pled by pointing only to general IP due diligence performed by the defendant?

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