The Ninth Circuit recently considered an issue of first impression: What standard of review does an appellate court apply when reviewing a district court’s grant of summary judgment in a trademark infringement case on the equitable basis of the unclean hands doctrine. The Ninth Circuit faced this issue in the case titled: Metal Jeans, Inc.
James is a shareholder in Weintraub Tobin’s litigation section. He represents corporate and individual clients in both state and federal courts in various business litigation matters, including trade secret misappropriation, unfair business competition, stockholder disputes, and intellectual property disputes.
Under the Copyright Act, an owner of a copyright suing for infringement may elect to seek statutory damages instead of actual damages. The amount of statutory damages under the Copyright Act are limited to $30,000 for innocent infringement and up to $150,000 for willful infringement. In Desire, LLC v. Manna Textiles, Inc., et al. (decided February 2, 2021), the Ninth Circuit was confronted with the issue of whether a plaintiff is entitled to multiple statutory damage awards where some of the defendants are found to be jointly and severally liable with each other.
Desire is a fabric supplier that had obtained and registered with the Copyright office “a two dimensional floral print textile design.” Shortly thereafter, a woman’s clothing manufacturing, Top Fashion, purchased a couple of yards of the fabric from Desire in order to secure a clothing order with Ashley Stewart, Inc., a woman’s clothing retailer. Unfortunately, Top Fashion and Desire had a dispute over the fabric’s price. Top Fashion then showed the design to Manna, a fabric designer, who in turn used a Chinese textile design firm to modify the design. That designer changed approximately 30-40% of the original design, and Manna subsequently registered the “new” design with the Copyright Office.…
Continue Reading The Interplay Between Statutory Damages and Joint and Several Liability in a Copyright Infringement Action
One of the last books written by Dr. Seuss, “Oh, The Places You’ll Go” is one of the bestselling books during graduation season each year. The copyright for this book, like all of the works of Dr. Seuss, belongs to Dr. Seuss Enterprises, LP, which issues licenses for the creation of new works under the Dr. Seuss brand. It also works closely to oversee licenses of its work, which it carefully vets. As any parent (and even non-parent) knows, there are tons of Dr. Seuss-licensed works such as toys, video games and books.
In 2016, a group attempted to produce and market a book that would be a “mash up” of Dr. Seuss’ “Oh, The Places” and Star Trek, in which the crew of the USS Enterprise would be sent through the world inhabited by the characters of “Oh, The Places You’ll Go!” A “mash up” is essentially a work that is created by combining “elements from two or more sources,” such as having specific movie characters inhabit a literary world, etc.
The plan was to create a new work called, “Oh The Places You’ll Boldly Go,” a play on words from the old Star Trek series that the crew was “boldly going where no man had gone before.”…
Continue Reading It’s No “Fair Use” Trying to Parody Dr. Seuss
One of the first elements that a plaintiff must prove to succeed on a trade secret claim is that it is the owner of a valid trade secret. To do so, the law generally imposes a burden on plaintiffs to identify its trade secrets with sufficient particularity in order to succeed. As the Ninth Circuit recently recognized, this burden allows courts and litigants to navigate “the line between the protection of unique, innovative technologies and vigorous competition.” In InteliClear, LLC v. ETC Global Holdings, Inc. (decided October 15, 2020), the Ninth Circuit addressed the issue of whether a plaintiff had satisfied the “sufficient particularity” burden and whether the trial court erred in granting summary judgment to a defendant when its motion was filed after just one day of discovery.
In the early 2000s, InteliClear created an electronic system for managing various stock broker and securities services called “InteliClear Systems,” which used a structured query language relational database to process millions of trades a day. In 2008, ETC Global Holdings (through its predecessor and later a subsidiary) licensed the InteliClear System and signed a Software License Agreement. Within the terms of that agreement was an acknowledgment that the InteliClear information that was being provided “was confidential, proprietary and copyrighted” and that ETC agreed to maintain that confidentiality.…
Continue Reading Trade Secrets and the Duty to Identify Them with Sufficient Particularity
The California Supreme Court in the 2008 case, Edwards v. Arthur Andersen LLP, ruled that a provision in an employment agreement that prevented an employee from competing with his former employer following the termination of his employment was an invalid restraint on trade in violation of section 16600 of the California Business and Professions Code. The Court held that subject to certain statutory exceptions, i.e., to protect the value of goodwill in connection with the sale of one’s business interest, section 16600 invalidated all contractual provisions that constituted a restraint on an employee’s ability to practice his or her trade or profession. What the Court has not addressed since that 2008 decision was whether provisions that acted as a restraint on trade in business contracts (i.e. exclusive distribution agreements, franchise agreements, etc.) would suffer a similar fate. On August 3, 2020, the California Supreme Court issued its decision in Ixchel Pharma, LLC v. Biogen, Inc., and ruled that non-compete provisions in business to business contracts were not per se invalid, but rather subject to a rule of reasonableness.…
Continue Reading The Rule of Reasonableness: Non-Compete Provisions in California Business Contracts