Photo of James Kachmar

James Kachmar

Subscribe to James Kachmar's Posts

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.

Follow:Read more about James KachmarJames's Linkedin Profile

One of the primary purposes of the Communications Decency Act (“CDA”) is to limit liability for certain internet content providers specifically protecting websites from liability for material posting on their website by a third party. In Jane Doe No. 14 v. Internet Brands, Inc., the operator of a networking site in the modeling industry sought to use the CDA as a defense to a negligence claim based on a failure to warn.  The facts of the case are horrific.

Jane Doe was an aspiring actress who posted her information on the networking site Modelmayhem.com.  In February 2011, she was contacted by two men Lavont Flanders and Emerson Callum, about a modeling audition in Florida.  Jane Doe traveled to Florida to meet with the two men and was given a drug that caused her to pass out after which she was raped and the assault made into a pornographic film.   (Flanders and Mr. Callum were convicted of numerous crimes by a federal jury in Florida and sentenced to life in prison for this and other similar assaults.)

Jane Doe claimed that the owner of the Modelmayhem.com website, Internet Brands, Inc. knew of the two men’s unlawful conduct but took no steps to warn her or other users of the threat.  Prior to the 2011 assault, Internet Brand, which had purchased the Modelmayhem site in 2008, had apparently sued the seller of the site in 2010 for failing to disclose the potential civil liability arising from the criminal deeds of Callum and Flanders.  She brought a claim against Internet Brands, Inc. for negligence under California law which recognizes a cause of action for failure to warn. Internet Brands moved to dismiss the claim asserting that the CDA immunized it from liability as to Jane Doe’s claims.  The trial court agreed and dismissed the complaint.  Jane Doe appealed to the Ninth Circuit which reversed the trial court’s decision in an opinion dated September 17, 2014.Continue Reading Model Mayhem – The Communications Decency Act is Not a Defense to Negligent Failure to Warn Claim

Litigants know that obtaining a judgment against an adversary is only half the battle.  Sometimes the efforts a litigant must expend to collect on that judgment are just as significant, if not more so, than obtaining the judgment.  In looking for assets to satisfy a judgment, litigants are reminded that a defendant’s intellectual property, including any copyrights, may be subject to execution to satisfy an unpaid judgment. This issue was recently explored in a Ninth Circuit case titled, Hendricks & Lewis PLLC v. George Clinton (the funk music superstar).

Clinton was a pioneer in funk music starring in bands such as Funkadelic and Parliament.  During the last ten years, however, he racked up legal fees with Hendricks & Lewis in excess of $3 million.  Hendricks & Lewis obtained an arbitration award in excess of $1.6 million that was later confirmed as a judgment against Clinton.

After receiving only a portion of the outstanding judgment through various collection methods, Hendricks & Lewis asked a U.S. District Court to appoint a receiver who would then attempt to sell Clinton’s copyrights in his various music to help satisfy the judgment.  The District Court agreed and appointed a receiver to do so.  Clinton then appealed to the Ninth Circuit.

One additional set of facts that is crucial to the outcome of this case was the history of Clinton’s copyrights in his music.  In July 1975, Clinton, through his production company, Thang, Inc., entered into a recording contract with Warner Bros. Records in which he agreed to make master recordings of his performances with Funkadelic.  The agreement made clear that Warner Bros. was to own in perpetuity all rights in the recordings and that neither Thang nor Clinton would have any rights.  This included an acknowledgment that Warner Bros. owned the copyrights in the recordings.  Clinton signed a similar agreement again with Warner Bros. in 1979.  Later, Clinton and Warner Bros. had various disputes and in 1982 entered into a settlement agreement under which Warner Bros. agreed to relinquish its ownership, including its copyrights, in the recordings to Clinton. In 2005, a U.S. District Court in California recognized that Clinton was the sole owner of the copyrights for the recordings.

On appeal, Clinton argued that: (1) his copyrights were not subject to execution to satisfy a judgment; and (2) even if they were, he was entitled to protection under section 201(e) of the Copyright Act which forbids the “involuntary transfer” of a copyright.

The Ninth Circuit began by recognizing that judgment collection proceedings are governed under state law.  Washington law provides that: “All property, real and personal, of the judgment debtor that is not exempted by law is liable to execution.”  Although the Ninth Circuit could not find any cases that held that a copyright was subject to execution, the U.S. Supreme Court had long ago held that a judgment debtor’s interest in a patent could be assigned to satisfy a judgment.  The Ninth Circuit reasoned “that where copyright case law is lacking, ‘it is appropriate to look for guidance to patent law ‘because of the historic kinship between patent law and copyright right law.’’”  The Court also found it relevant that it had previously held in a case arising out of California, in Office Depot, Inc. v. Zuccarini, 596 F.3d 696, that a judgment debtor’s internet domain name could also be subject to execution.
Continue Reading Funk, Copyrights, and Collecting Judgments

This column addressed the Ninth Circuit’s decision in the case Petrella v. Metro-Goldwyn-Mayer, Inc., et al., approximately 18 months ago.  The Ninth Circuit held that the equitable defense of laches could be asserted to bar a claim for copyright infringement even if it was filed within the three-year statute of limitations.  As the column pointed out at that time, Justice Fletcher concurred in the opinion only because that it was consistent with prior Ninth Circuit precedent but pointed out that there had been a split among the various circuits as to whether this was a proper result.  Earlier this week, the U.S. Supreme Court considered this circuit split and found that the Ninth Circuit erred in allowing the defense of laches to bar a claim for infringement that was brought within the three year statute of limitations.

A short recap of the facts of the case are as follows:  Jake LaMotta retired from boxing and with his friend, Frank Petrella, worked together to write a book and two screen plays concerning LaMotta’s life.  The works were registered with the U.S. Copyright Office.  One screen play in 1963, a book in 1970 and another screen play in 1973.  In 1976, Frank Petrella and LaMotta assigned their rights in the three works to a production company, which subsequently assigned the motion picture rights to MGM in 1978.   MGM released “Raging Bull” in 1980.

Mr. Petrella passed away in 1981 and his copyright renewal rights passed to his daughter Paula.  (Note: When an author dies prior to the beginning of a copyright renewal period, his successors get his or her renewal rights even if the author previously assigned the rights.)  Ms. Petrella filed a renewal application for the 1963 screen play in 1991.  She later retained an attorney who contacted MGM and others between 1998-2000 to notify them of Ms. Petrella’s copyright interest in the 1963 screen play and claiming that their exploitation of derivative works, including the motion picture Raging Bull, constituted infringement of her rights.  MGM responded by denying that it infringed on any of Ms. Petrella’s rights.  Ms. Petrella then waited almost a decade before filing suit against MGM and others in 2009.  Prior to trial, the district court granted summary judgment in the defendant’s favor on the basis of the doctrine of laches.  This was despite the fact that plaintiff had alleged that MGM had continued to infringe on her rights within the three year statute of limitation set forth in section 17 U.S.C. §507(b).  The Ninth Circuit affirmed the judgment based on laches in 2012 and plaintiff appealed that decision to the U.S. Supreme Court.
Continue Reading Raging Bull Revisited – Copyright Infringement and the Laches Defense

   Under California law, a plaintiff must bring a claim for trade secret misappropriation within three years of discovering the misappropriation or, by the exercise of reasonable diligence, should have discovered the alleged misappropriation.  Often times, discovery of alleged trade secret misappropriation is rather straightforward, i.e., a company discovers that its former employee has downloaded information from a computer and has started soliciting customers to do business with a competitor.  However, there are times when discovery is less straightforward, especially in product development where it can take years for a product to hit the market.  One potential source of information that may give rise to the discovery of trade secret misappropriation that employers must be aware of are patent filings.  The U.S. District Court in the Northern District of California recently used evidence of a patent filing to grant summary judgment in favor of a defendant accused of trade secret misappropriation in the case: Wang v. Palo Alto Networks, Inc. (Case No. 12-05579).

Mr. Wang was a design engineer specializing in the field of network security.  He spent approximately a decade trying to commercialize his firewall technology that included  “fast signature scan” technology.  In 2004, he filed a patent application on his technology.  His patent eventually issued in November 2008.

For years prior to the issuance of his patent, he tried to interest venture capitalists in his product.  In 2005, Mr. Wang met defendant Fengmin Gong at a seminar.  Mr. Gong was a chief scientist at McAfee, Inc. at the time.  Mr. Wang gave Mr. Gong a brief overview of the technology he was developing and later had Mr. Gong sign a nondisclosure agreement.   Over the next year, Mr. Wang discussed his alleged trade secrets with Mr. Gong and even gave him a copy of his patent application that contained trade secret information.  Mr. Gong was supposedly the only person to whom Mr. Wang disclosed his trade secret information.
Continue Reading Patent Filings and the Potential Discovery of Trade Secret Misappropriation