Monthly Archives: November 2011

Bits and Bytes

Posted on November 25, 2011 | Leave a comment

Check out this nice distillation of the New York Times Notable Book List by Flavorwire. While I have to admit I’ve only read a couple of these, it gives me something on which to use my Amazon gift cards and provides some much needed Christmas ideas.

Activate Your Entrepreneurial Spirit.

Getting a bunch of “likes” on your Business’ Facebook page doesn’t do all that much for you. You want to get in your customer’s News Feed. Facebook has some new metrics and analytics that show you what’s working and what’s not.

The back story on the big box stores you’ll be hanging out in during the holidays.

How to set up a Google+ Brand page.

Better stay away from that cookie store in the food court….Your mall may be using your cell-phone to track your every move.

Thankfulness: 50 Free Apps for which we are truly thankful.

How to fix your computer so that the Holidays will go more smoothly.

The Toy Industry picks the best toys of 2011.

Microsoft files patent on system that tracks employees work habits via internet usage, emails, and phone calls.

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Posted in Bits and Bytes

In Patent Cases, Only Enforcement and Defense Activities Directed Toward The Forum State Count in the Personal Jurisdiction Analysis

Posted on November 25, 2011 | Leave a comment

This case involved a dispute between Radio Systems, a pet-related product manufacturer in Knoxville Tennessee, and Accession, located in Hamilton, New Jersey. Radio Systems manufactures several pet-related products, including a patented electronic pet access door (the “SmartDoor”), which unlocks in response to a transmitter worn by the pet. Accession’s sole employee is its president, Thomas Sullivan. Mr. Sullivan is the named inventor of U.S. Patent No. 7,207,141 (“the ‘141 patent”), issued on April 24, 2007, and assigned to Accession. The ‘141 patent is directed to a portable pet access door (the “Wedgit”) that can be inserted into sliding glass doors.

There were several communications between these parties regarding a possible business alliance and then, later, a dispute eventually ensued as to whether Accession should be added as a co-inventor of Radio Systems patent. Radio Systems filed a declaratory judgment action, seeking a judgment of non-infringement and invalidity of Accession’s ‘141 Patent. Accession moved to dismiss for lack of personal jurisdiction or, in the alternative, to transfer. The district court granted the motion and Radio Systems appealed to the Federal Circuit.

Holding: Sending cease and desist letters into the forum state will not be enough to confer jurisdiction over the defendant. Likewise, activities that are directed at commercializing the patent are not sufficient. It is only those enforcement or defense activities specifically directed towards that forum state that count in the personal jurisdiction analysis. Because the communications between the parties before August 2009 were targeted towards creating a mutually beneficial business arrangement, rather than defense and enforcement, they would not be sufficient to confer jurisdiction. Calls that Accession made to the USPTO in Virginia about Radio Systems’ patents were also not sufficient to establish personal jurisdiction in Tennessee because enforcement and defense activities outside the forum state don’t count either. And finally, even though the parties had entered into a non-disclosure agreement that had a forum selection clause naming Tennessee as the forum for disputes arising out of the NDA, the forum selection clause had no effect on the personal jurisdiction analysis, because the litigation did not arise out of that agreement. The district judge’s dismissal for lack of personal jurisdiction was affirmed.

R. Bradford Brittian, Pitts & Brittian, P.C., of Knoxville, TN, argued for the plaintiff-appellant. With him on the brief were Robert E. Pitts, Paul A. Forsyth and Matthew J. Stark.

Robert J. Basil, Collier & Basil, PC, of New York, NY, argued for the defendant-appellee.

Before BRYSON, LINN, and DYK, Circuit Judges.

Radio Systems Corp. v. Accession, Inc., 638 F.3d 785, 98 U.S.P.Q.2d 1485 (Fed.Cir. 2011).

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Posted in Litigation, Patent

Tennessee Does Not Recognize Unfair Competition as a Separate and Distinct Cause of Action

Posted on November 25, 2011 | Leave a comment
 Plaintiffs entered into an agreement (“Agreement”)  to pursue the development of a solid waste transfer station for use by Defendants in Davidson County, Tennessee. Plaintiffs were responsible for locating and obtaining an option to purchase a property for the proposed transfer station for assigning the option to Defendants as directed. Plaintiffs were also responsible for obtaining in Defendants’ name all permits necessary to construct the transfer station.After allegedly successful efforts on Plaintiffs’ parts to secure the option and the required permits, Defendants terminated the Agreement. Defendants ended up not purchasing the property even though Plaintiffs secured and assigned the option. Plaintiffs brought claims of breach of contract, unjust enrichment; quantum meruit; violation of the Tennessee Consumer Protection Act (“TCPA”); violation of the Tennessee Trade Practices Act (“TTPA”); unfair competition; and  violation of the Tennessee Uniform Trade Secrets Act (“UTSA”).  In response, Defendants filed a 12(b)6 Motion to Dismiss for Failure to State a Claim. For various reasons, all but the breach of contract claim as to Defendant RST, unjust enrichment, violations of the TCPA, and claims of unfair competition were resolved prior to this decision. Consequently, these were the only claims addressed.Holding: The Motion to Dismiss was denied as the breach of contract claim against one of the defendants. The Motion to Dismiss the unjust enrichment claim was granted as to one defendant and denied as to the other.Plaintiffs could not proceed under the TCPA because they were sellers, not buyers. A plaintiff cannot state a claim under the TCPA unless it  is on the consumer end of the transaction. Plaintiffs cannot allege a claim for “unfair competition” because Tennessee does not recognize unfair competition as a separate and independent cause of action. (Doc. No. 25 at 3–4, citing B & L Corp. v. Thomas & Thorngren, Inc., 917 S.W.2d 674, 681 (Tenn.Ct.App.1995)

Withco, LLC v. Republic Services of Tennessee, LLC, Slip Copy, 2011 WL 1099905 (M.D.Tenn. March 23, 2011).

Lawyers in the Case:

G. Kline Preston, IV, Kline Preston Law Group, PC, Nashville, TN, for Plaintiffs.

Jonathan Jacob Cole, William A. Lewis, Gary C. Shockley, Baker, Donelson, Bearman, Caldwell & Berkowitz, PC, Nashville, TN, Douglas C. Northup, Fennemore Craig, P.C., Phoenix, AZ, for Defendants.

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Posted in Unfair Trade Practices

Using §337 of the 1930 Tariff Act to Prevent the Import of Products Made with Stolen IP

Posted on November 24, 2011 | Leave a comment
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American companies are getting some assistance from the ITC in preventing foreign companies that disregard U.S. intellectual property rights from importing the offending goods to the United States. US manufacturers have long made use of protections offered through Section 337 of the 1930 Tariff Act.  Put into place during the dire times of the  Great Depression, §337 has survived, while punitive tariff rates and many other protectionist provisions have gone the way of the dodo.  Even though the United States evolved from a home-turf economy to a leader in global trade, §337 has remained in place, quietly protecting American business.    
 Normally used to uphold US patents and trademarks,  §337 prevents a foreign producer from selling into the US in a way that infringes US registered patents or trademarks.  Valid US patents and trademarks create a US monopoly for their owners.  As a result, a foreign manufacturer cannot export to the US a product that infringes a competitor’s patent or trademark rights.  The patent or trademark owner may be able to use §337 to block the offending products at ports of entry.Recently, US companies have had some luck expanding the protections of §337, which is not specifically restricted to registered patents and trademarks. The U.S. Court of Appeals for the Federal Circuit recently ruled that §337 had a broader reach than previously thought.  In a 2-1 decision, the Court affirmed a decision of the US International Trade Commission (ITC) that it could prevent Chinese imports that infringed, “trade secrets” of a US company.  See TianRui Group Company Ltd. v. International Trade Commission, No. 2010-1395 (Fed. Cir. Ct. App. Oct. 11, 2011).Unlike a patent, a trade secret is not evidenced by an official piece of paper.  It is secret information that derives its value from the fact that others don’t know the information and the owner of the trade secret is given a “leg up” over the competition by owning it. There is no way to obtain a registered monopoly over a trade secret (other than patenting the technology, in which case it is no longer secret).  In the TianRui case, the trade secret was a process for making wheels owned by Amsted Industries Inc.  Amsted licensed the process to certain Chinese firms.  TianRui and Amsted discussed but did not agree on a license for use of the technology.  TianRui used the process on the wheels anyway without a license and shipped them to a US buyer.

Section 337 prohibits “unfair methods of competition, and unfair acts in their importation of article . . . into the United States.”  19 U.S.C. §337(a)(1)(A).  Here, the unfair acts occurred in China, not in the United States.  The imported wheels did not infringe a US patent or trademark, and there was no evidence that the wheels were marketed in an unfair manner. Nonetheless, the Federal Circuit upheld the ITC’s right to ban the wheels from coming into the States.  Unless overturned by the Supreme Court, the decision puts a powerful arrow in the quiver of US manufacturers that can show that their trade secrets have been used abroad to create a product imported to the USA.

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Posted in Unfair Trade Practices

Lassie is Not Afraid of Any Danger, Even Copyright Infringement

Posted on November 24, 2011 | 1 comment
Lassie

Classic Media, the company that owns the rights to the fictional canine heroine “Lassie,” has filed a $1 million copyright lawsuit against financial services firm J.G. Wentworth and its advertising agency for making a TV commercial with a dog that allegedly is too similar to its well-known and well-loved character. J.G. Wentworth aired a commercial in which a boy and his mother, dressed in 1950’s garb, are sitting in their kitchen, bemoaning their dire financial situation. It seems the mother is about to lose the ranch. The boy appears to be confused and says, “But mother, don’t you get regular settlement payments?” The mother answers, “Yes, but we need a lump sum payment to pay it off.”

Enter their collie dog who rushes through hill and dale to find help, in the form of J. G. Wentworth, who can provide a cash payout for structured settlements.

Classic Media alleges in its complaint that J.G. Wentworth sent them a couple of emails about licensing the character but that J.G. Wentworth appeared to drop the matter.

Whether a defendant is infringing a copyright by using traits of an iconic fictional character is a close call. Simply evoking the “ghost” of the character is not enough. Stirring one’s memory of the copyrighted character is not the same as creating a character that is substantially similar to the copyrighted character.  If the two characters share some traits but look and act differently in the larger context, there will be no infringement.  What matters is whether the “overall perception” of the second character is different from the copyrighted character. See Warner Bros. Inc. v. American Broadcasting Companies, Inc., 720 F.2d 231,  (2d Cir.  1983).

J.G. Wentworth will undoubtedly argue that the commercial is a parody. It’s hard to know at this point if that will fly.  It’s hard to bet against Lassie, though.

Classic Media LLC v. J.G. Wentworth LLC et al., Docket No. 1:11-cv-08394, in the U.S. District Court for the Southern District of New York.

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Posted in Copyrights

Avoiding Disaster: How to Avert a Data Breach

Posted on November 23, 2011 | Leave a comment
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  Don’t Collect It In The First Place      One of the easiest ways to avoid seeing your company’s name all over the news for having a data breach is not to collect sensitive information. Unless you absolutely have a compelling business reason to take it from the customer and store it in your systems, do not collect it. Many older forms have a place for the customer or client to enter a social security number but often there is not a valid business reason to have it. For example, I was recently completing forms for my church for one of my children to go on a trip with the youth group. The form, probably the remnant of a form from thirty years ago, requested the child’s social security number. Don’t take socials on the front end and get rid of them if you have them. They will only cause you heartbreak. Similarly, the loss or breach of bank data and health data can trigger liability under the labrynthe of laws that addresses these issues in the United States. If you don’t absolutely have to have this information, don’t collect it.       Along these same lines, get rid of dusty old records sitting in your company’s basement or mildewing on an ancient hard drive somewhere. Not only can these things cause you untold grief if you get sued (you could conceivably have to pay a fortune to review and produce them in discovery), their loss or breach could catapult you into the news for a data breach with the likes of  TJMax and Sony. Do some spring data cleaning and get rid of these things. 

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Posted in Data Breach, Trade Secrets

Local Schools Buy .xxx Domain Names to Protect Their Reputation

Posted on November 23, 2011 | Leave a comment
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 Local institution Columbia State Community College recently spent approximately $1,000 to purchase eight .xxx domain names. No, CSCC is not going into the business of providing adult entertainment,  it is joining the many thousands of other trademark owners who are purchasing the .xxx domain names to keep others from using their brands to post and sell pornographic material. The .xxx domain names are.xxx (known as “dot triple-X“)  and are intended as a voluntary option for pornagraphic sites on the Internet. 
 ICM Registry, the company overseeing .xxx domain name registration, allowed trademark owners to secure .xxx domains for $200 before sales opened to the adult entertainment community on Dec. 6, 2011. 
 Spending $200 is very cheap insurance to keep CSCC and other business from costly disputes over the use of their brands on pornographic sites. If your business hasn’t purchased its own .xxx domain name, it probably should strongly consider it.

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Posted in Internet Issues

Has Beyonce Infringed Choreographer’s Copyright in Dance Moves?

Posted on November 22, 2011 | Leave a comment

A screenshot from De Keersmaeker's “Rosas Danst Rosas.

Accusations are flying around that the choreography for Beyoncé’s  new “Countdown” video were pilfered from the work of Belgian contemporary choreographer Anne Teresa De Keersmaeker.  There are some move -for-move/shot-for-shot similarities between the pieces. So, what is this, inspiration, homage or infringment? Beyonce takes her place in a long and distinguished line of dance plagerists. Stealing dance moves is nothing new.

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Posted in Copyrights

Is China Going to Take IP Rights Seriously?

Posted on November 21, 2011 | Leave a comment

China has agreed to create a new high-level agency to be run by Vice Premier Wang Qishan to boost intellectual property rights enforcement, U.S. Trade Representative Ron Kirk said Monday at the end of a two-day summit.

The creation of this agency marks a “significant systemic change” in China’s IP enforcement, which has long been criticized by western businesses and officials for being too lenient (or non-existent, depending on who you talk to) and will make the country’s special IPR campaign from 2010 a permanent part of China’s policies, according to the USTR.

“For the first time, China will establish a permanent leadership structure to enforce intellectual property rights,” U.S. Commerce Secretary John Bryson said Monday. “As enforcement becomes effective, those who infringe will no longer be able to lay low until a crackdown is over and then simply resume their illegal activities.”

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Posted in Unfair Trade Practices

Tennessee Personal Rights Protection Act: There Has to Be Use In Advertising

Posted on November 21, 2011 | Leave a comment

The above picture is one Lauren Gauck, a Fox news anchor  in Memphis, Tennessee. Ms. Gauck sued Karamian, the owner of a gossip (sorta) website called “The Dirty.com”  that allows users to post pictures of women in order to ask Karamian and “the Dirty Army” (the site’s readers)  whether the women are “hot” or not. The Dirty Army also posts pictures of people, mostly women, who they want to “slam” or ridicule. Karamanian posts what are supposed to be witty comments on the pictures, which mostly consist of his opinion that the women are not “hot” enough. The Dirty.com supposedly published photos of Ms. Gauck and her friends, along with a pornographic picture (though redacted) of a woman who was represented to be Ms. Gauck, but in fact, was not her. Karamanian posted a couple of snarky comments about how it was time for her and her friends to “go to a one-piece.”

    Ms. Gauck sued under Tennessee’s Personal Rights Protection Act (“TPRPA”) (and asserted various tort theories under Tennessee common law), but was not successful in obtaining an injunction against the future posting of the material because the court found that she was not likely to succeed on the merits of her TPRPA claim. In short, the court found that Tennessee’s Personal Rights Protection Act is more restrictive than the Restatement approach adopted by other states. Under Tennessee law, as contrasted with states that follow the Restatement approach, to succeed on a TPRPA claim, the plaintiff has to show that  the Defendant used her image or likeness in advertisement or solicitations, rather than for the defendant’s “own purposes and benefit.” Because Ms. Gauck was unable to show a causal connection between thedirty.com’s use of her name and image and an increase in visitors to the site or advertising revenue, she was unable to show that her image was being used as an advertisement or solicitation. Consequently, her claims failed and she was not able to enjoin the site from publishing her image and likeness in the future (although the opinion indicates that the defendant had pulled the photos down and that defense counsel had stated that Karamian had no intention of republishing the post pertaining to Ms. Gauck.

Bottom Line: To win on a TPRPA claim, the plaintiff has to show that her image or likeness was used in advertising…simply showing that the defendant received a benefit from the use of the image or likeness is not enough under Tennessee’s narrowly drawn statute.

Gauck v. Karamian, et. al, No. 2:11-cv-02346,  2011 WL 3273123 (W.D. Tenn. July 29, 2011).

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Posted in Image aned Likeness