We recently wrote about a case in the Southern District of New York against Mashable relating to the embedding of content from social media platforms like Instagram.  In that case, the court held that Instagram’s terms of use (which were accepted by the plaintiff, a photographer, when he created an Instagram account) were insufficiently clear to allow Mashable to escape liability for publishing Instagram content through the process of embedding.  Thereafter, the parties settled out of court.  Legal watchers speculated that the ruling would encourage copyright infringement claims based on the embedding of content.

Continue Reading Instagram Faces Claims That It Encouraged Media Companies to Illegally Embed Images Posted to Instagram by Users

Hard seltzer first hit the marketplace about five years ago and rapidly grew in popularity with sales exceeding $4.5 billion in 2020.  Wanting to ride the wave of success, many companies have introduced hard seltzers into this now crowded space.  But what is a hard seltzer?  Is it a form of beer or something else?  Based on its popularity, most would say, “Who cares whether hard seltzer is beer, just give me one.”  However, Modelo Grupo (“Modelo”) and Constellation Brands (“Constellation”) would say there is a lot riding on the answer.

Modelo, whose parent is Anheuser-Busch InBev (“AB”), created the Corona brand.  In 2013, Constellation acquired perpetual, irrevocable, and exclusive license rights in the Corona marks, which gave Constellation the right to sell products under the Corona trademark.  Then in 2020, Constellation introduced Corona Hard Seltzer, which is a sugar-based, fermented beverage produced in Coahuila, Mexico.  Corona Hard Seltzer is now the fourth most popular hard seltzer in the United States, competing directly with Bud Light Seltzer and other AB hard seltzers.

Modelo sued Constellation in the U.S. District Court for the Southern District of New York over the use of the Corona trademark for Corona Hard Seltzer and for breach of contract, alleging that Constellation only has the right to sell beer products, not hard seltzer, under the Corona brand.   According to Modelo, hard seltzer is not one of the allowable beer beverages. Continue Reading Beer: You Know It When You Taste It, Or Maybe Not

What happens when a junior trademark holder’s business becomes so popular and well known that it threatens to swamp the reputation of a senior mark holder?  The senior mark holder brings a trademark infringement case alleging “reverse confusion” among its potential customers.  This was the scenario the Ninth Circuit faced in its recent decision in: Ironhawk Technologies, Inc. v. Dropbox, Inc. (decided April 20, 2021).

Ironhawk develops computer software that uses compression technology to allow for the efficient transfer of data, especially in “bandwidth-challenged environments.”  It has marketed its software under the name “SmartSync” since 2004 and obtained a trademark for SmartSync in 2007.  It sells its software primarily to the United States Navy but, in 2013, sold its software to at least one major pharmacy chain.

Dropbox (as most lawyers know) produces cloud storage software that millions of users utilize around the world.  One of Dropbox’s software features, “Smart Sync,” allows a user to see and access files in their Dropbox cloud account without using up any of the user’s hard drive storage. Dropbox launched its Smart Sync feature in 2017 and was previously aware of Ironhawk’s SmartSync mark.  Ironhawk sued Dropbox for violations of the Lanham Act, i.e., trademark infringement, and unfair competition claiming that Dropbox’s use of the name “Smart Sync” intentionally infringed upon Ironhawk’s “SmartSync” trademark.

After some discovery, Dropbox moved for summary judgment.  After applying the Sleekcraft factors [from AMF, Inc. v. Sleekcraft Boats, 599 F.2d 341, 348-349 (9th Cir. 1979)], the district court granted summary judgment to Dropbox.  The Court found that “the overwhelming balance of the Sleekcraft factors weighs against a likelihood of confusion” and that no reasonable jury would find any confusion. Ironhawk appealed to the Ninth Circuit from summary judgment. Continue Reading The Sleekcraft Factors and “Reverse Confusion” Trademark Infringement

Quick answer: no!

The Federal Circuit Court of Appeals recently tangled with a patent application for an invention that did not have scientific support.  The court affirmed a decision of the Patent Trial and Appeal Board rejecting a patent application on these grounds.  While this is not a common occurrence, in this case, it’s an easy conclusion to reach.

In In re Huping Hu, 2021 U.S. App. LEXIS 7776, the inventors applied for patents for inventions related to “quantum entanglement.”  According to the inventors, quantum entanglement is “quantum spins of photons, electrons and nuclei.”  The inventors explained that “quantum spins of photons, electrons and nuclei have now been successfully entangled in various ways for purposes of quantum computation and communication.”  The inventors said that quantum entanglement is a phenomenon that happens if particles, such as photons and electrons, become linked, and, when separated, the mechanical states of the molecules are still linked such that if the state of one particle is changed, the linked particle is affected.  The PTO explained the inventors’ method as using quantum entanglement “to change the characteristics of one substance via the manipulation of a completely physically separate substance.”  The PTO did not dispute the existence of quantum entanglement, but said that the phenomenon has been seen in very specific conditions for only a fraction of a second. Continue Reading Can a Patent Violate the Laws of Chemistry and Physics?

In Hytera Communications Corp. Ltd. v. Motorola Solutions, Inc., 1-17-cv-01794 (NDOH 2021-04-29, Order) (Donald C. Nugent), the District Court denied defendant’s motion for attorney fees under 35 U.S.C. § 285, determining plaintiff’s litigation positions were not baseless even after a granting of summary judgment of noninfringement that “was not a close call.”  

As way of background, in patent infringement cases, Courts are authorized to award “reasonable attorney fees to the prevailing party” in “exceptional cases.” The determination of whether to award fees requires a two-step process: first, the court must make a factual determination as to whether the case is “exceptional,” and second the court must exercise its discretion to determine if an award of attorney fees is warranted.  Under the Federal Circuit’s holding in Octane Fitness, LLC v. ICON Health & Fitness, Inc., 134 S. Ct. 1749 (2014), a case is exceptional if under the totality of the circumstances “it stands out from others with respect to the substantive strength of a party’s litigating position (considering both the governing law and the facts of the case) or the unreasonable manner in which the case was litigated.” 

However, a defendant need not show that the litigation is both objectively baseless and brought in bad faith.  Rather, a case may be deemed “exceptional” if it presents “either subjective bad faith or exceptionally meritless claims.”  A finding of subjective bad faith may be supported solely by circumstantial evidence, without inquiry into the plaintiff’s state of mind.  Moreover, a case may also be designated “exceptional” when a suit originally brought in good faith is prolonged or extended after it becomes clear that it can no longer be pursued in good faith.  However, the party seeking attorney’s fees under bears the burden of showing that the case is exceptional by a preponderance of the evidence.

Turning to the case at issue, defendant Motorola first claimed that plaintiff Hytera brought the action solely as a way of retaliating against it for Motorola pursuing trade-secret and infringement claims against Hytera in multiple other jurisdictions.  However, the court reasoned that “although circumstantial evidence of bad faith can be sufficient to support an exceptional finding for purposes of attorney fees, the allegation that Hytera’s infringement claims in this case were improperly motivated from the outset remains speculative and is unsupported even by circumstantial evidence.” Further, the court also found that there is no evidence of bad faith delays or obfuscation by Hytera during the litigation process.

Next, Motorola contended that Hytera knew that its case was baseless from the beginning because it was aware that the Motorola products did not meet all of the required claim limitations.  And regardless, even if Hytera did not know it at the time it brought the case, Motorola also claimed that Hytera failed in its duty by continuing to rely solely on theories that were unsupportable under the claim construction that was adopted by the Court.

However, the court rejected these contentions by Motorola, reasoning it was not wholly unreasonable for Hytera to investigate and attempt to develop other infringement theories following claim construction.  In short, the court found that although its “decision on Summary Judgment was not a close call. The patent language, and the Court’s construction of claim terms clearly support the finding in favor of Motorola. Hytera’s arguments were somewhat strained and often separated from the context and a common sense interpretation of the patent language. However, they were not entirely baseless or frivolous. A case is not extraordinary simply because the Plaintiff was ultimately unsuccessful, even if its lack of success was entirely predictable. In this case. Motorola did not meet its burden of proving by a preponderance of the evidence that this case was exceptional under 35 U.S.C. §285.”

Therefore, the court found that Motorola failed to shown, by a preponderance of the evidence, that the case was “exceptional” within the meaning of 35 U.S.C. § 285 and denied Motorola’s request for the imposition of its attorney fees.  Thus, this case shows that even when a decision on summary judgment was not a close call by the court, this still does not mean the case is necessarily “exceptional” within the meaning of the Patent Statute such that a defendant can just expect its attorney’s fees to be awarded.  Instead, the defendant still must show by a preponderance of the evidence why the case was exceptional and that it is entitled to its attorney’s fees.