In a June decision, the U.S. Supreme Court resolved a key issue in patent law: whether a party can be liable for patent infringement when there is no underlying act of direct infringement.  Specifically, the court addressed whether a party who instructs multiple parties to perform different steps of a method patent can be liable for inducing infringement.  The Court’s answer:  no. The case is Limelight Networks, Inc. v. Akamai Technologies, Inc. (U.S. Supreme Court June 2, 2014) 2014 U.S. LEXIS 3817.

Patent infringement is either direct or indirect.  Direct infringement exists when a defendant makes, uses, sells, offers to sell, or imports into the United States a patented product or performs all of the steps of a patented method.  Indirect infringement exists when the defendant does not itself commit direct infringement, but causes another party to do so.  There are two types of indirect infringement: inducing and contributory.  A defendant has induced infringement when it instructs or causes another party to infringe a patent.  For a method patent, a defendant induces infringement if it instructs another party to perform all of the steps of the method.  The party who performs all of the steps is liable as a direct infringer, while the inducer is liable as an indirect infringer.  Contributory infringement, which is not relevant here, exists when a defendant sells or offers to sell a component that can only be used in infringing a patented invention. Continue Reading No Inducing Patent Infringement Unless There is Direct Infringement

transparentOn June 17, 2014, a federal judge in Illinois granted summary judgment to Stefani Joanne Germanotta against plaintiff, Rebecca Francescatti, in a copyright infringement matter because he found that no reasonable trier of fact could find that Ms. Germanotta’s song, “Judas,” is substantially similar to Ms. Francescatti’s song, “Juda.”  You may wonder, why you should care about these two unknown figures in the music industry, but the truth is, Ms. Germanotta is far from unknown.  In fact, she has been a staple in the pop music industry since she burst onto the scene in 2008 with the release of her album, “The Fame,” which had such hits as “Just Dance” and “Poker Face.”  By now you may have guessed—Ms. Germanotta is none other than Lady Gaga.

In her complaint, Ms. Francescatti alleged that Lady Gaga’s song, “Judas,” from the album “Born This Way,” infringed Francescatti’s copyright in her song, “Juda.”  According to Ms. Francescatti, she worked with co-defendant sound engineer, Brian Joseph Gaynor, to write “Juda” in 1999.  Ms. Francescatti alleged that Mr. Gaynor later collaborated with Lady Gaga in 2010 to create “Judas.”  According to Ms. Francescatti, the two songs have remarkably similar melodies, structure, bass lines, and further similar features.  This allegation was unsupported by expert testimony. Continue Reading When is Enough Really Enough? The Importance of Experts in Music Copyright Infringement Actions

Clearly there is no love lost between John Wayne Enterprises, LLC (“JWE”), the entity owned by John Wayne’s heirs which controls the intellectual property related to John Wayne, and Duke University.   Both have have been locked in battle over various trademarks incorporating the word DUKE.  The most recent skirmish involves a trademark application filed by John Wayne Enterprises, LLC (“JWE”)  for the following design mark for alcoholic beverages, excluding beer:

Duke University requested and was granted  an extension of time to potentially opposition to the registration of this mark.    Previously, Duke University opposed JWE’s’ application to register DUKE for restaurant services, claiming that the mark is likely to cause confusion with Duke University’s other DUKE trademarks and/or dilute Duke University’s famous trademarks. Specifically, Duke University alleged that:  “[JWE] seeks to register a mark that is substantially similar to [the University’s] famous mark DUKE, and that moreover is likely to be abbreviated simply as DUKE and expressed orally simply  as DUKE, for goods that are closely related to goods and services with which [the University’s] DUKE Marks are used…”

It appears that this time, JWE took John Wayne’s quote  “You tangle with me, I’ll have your hide.” literally and didn’t wait and see whether the University actually filed an opposition.  JEW filed a complaint for declaratory relief in the United States District Court for the Central District of California, requesting the court to declare that the above mark does not infringe or dilute any of the DUKE trademarks owned by Duke University.  In its complaint it alleges that “Duke University believes that products bearing John Wayne’s world renowned image and signature…will somehow be confused with being associated with Duke University.” Further, JWE alleges that “in light of the multiple Oppositions and Cancellation proceedings Duke University has filed against JWE and the claims made therein, JEW believes Duke University contends that JEW’s [registration and use of its marks] or any other mark that includes the term DUKE are likely to cause confusion with [the marks owned by Duke University] and intends to sue JWE for trademark infringement, notwithstanding that JWE’s use is directly associated with and expressly linked to John Wayne.” Continue Reading The Duke and Duke Duke It Out In Trademark Rowe

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

The long-awaited decision by the United States Supreme Court on business method patents was issued on June 19, 2014.  Unfortunately, the decision raised more questions than it answered.  The expectation was that the Supreme Court would clearly explain the difference between unpatentable abstract ideas and patentable software, including business methods.  Instead, the Court issued a very narrow decision with broad, but uncertain ramifications.  The Court applied a test it has previously relied upon, striking down all of the patents in the case and expressly stating that it was not opining on the patentability of software or business methods in general.

The case is Alice Corporation Pty. Ltd. v. CLS Bank International, 2014 U.S. Lexis 4303 (U.S. Supreme Court, June 19, 2014). Alice Corporation’s patents were directed to a computer-implemented process of minimizing “settlement risk” – the risk to a party in a financial transaction that the other party would not perform the transaction, by creating an intermediary using “shadow” financial records of both parties.  The claims covered the computer system to perform the process, the computerized method itself, and a computer-readable medium with the instructions to perform the method.

Alice Corporation had sued CLS Bank for patent infringement.  The district court had granted summary judgment for CLS Bank on the grounds that all of the claims were not eligible for patent protection as they were directed to an abstract idea.  A panel of the Federal Circuit Court of Appeals had reversed the district court, but then, in an en banc hearing, affirmed the district court in a set of multiple opinions.  A plurality of the Federal Circuit found all of Alice Corporation’s claims patent-ineligible, relying on the Supreme Court’s 2012 decision in Mayo Collaborative Services v. Prometheus Laboratories, Inc., 132 S.Ct. 1289 (2012).

Continue Reading Business Method Patents: Murkier Water