Georgia IP Litigation

Modtruss Stumbles on “Same” Problem with Battlefrog Obstacles - Motion for Preliminary Injunctive Relief Denied

noreply@blogger.com (Unknown) — Wed, 29 Jun 2016 11:12:00 +0000

This post follows up on this post on Judge Ross’s Order of June 6, 2016, in which she allowed Modtruss, Inc. (“Modtruss”), to clarify its intent with regard to a prior motion for a temporary restraining order and preliminary injunction against Defendant, Battlefrog LLC (“Battlefrog”). Escaping the technical mooting of its motion by the filing of an intervening amendment, Modtruss accepted the Court’s invitation to adopt is prior briefing and arguments and Battlefrog similarly went along with the suggestion – thus positioning the motion for the current ruling.

Judge Ross described the underlying patent, U.S. Patent No. 8,418,425 issued on May 13, 2014, as protecting “beams, which allow for temporary structures to be efficiently constructed.” Battlefrog incorporates rectangular beams in components on the obstacle course races it designs and operates. The alleged infringing beams were referred to by the Court as the “Accused Obstacles.” Two figures from the patent are depicted below:

A plaintiff seeking the extraordinary relief of a preliminary injunction must establish four factors: “that he is likely to succeed on the merits, that he is likely to suffer irreparable harm in the absence of preliminary relief, that the balance of equities tips in his favor, and than an injunction is in the public interest.” Quoting Trebro Mfg., Inc. v. Firefly Equip., LLC, 748 F.3d 1159, 1165 (Fed. Cir. 2014) (quoting Winter v. Nat. Res. Def. Council, Inc., 555 U.S. 7, 20 (2008)).

In this case the Court focused on one disputed word in the asserted claim – “same.” The patent covered beams “that the sides have a fastener hole pattern and the end plates have the same fastener hole pattern.” The movant, Modtruss, argued that “same” meant “match.” Judge Ross noted that the patent never mentioned the word match or otherwise sought to alter the ordinary meaning of the word “same,” which is “not different” and “exactly like . . . something else.” Citing, e.g., Merriam Webster Dictionary, “same,” http://www.merriam-webster.com/dictionary/same (last visited June 22, 2016).

Judge Ross noted: “Here, the Accused Obstacles’ end plate shows eight fastener hole openings, while there are six fastener hole openings on the side of the beams.” The implication from the Order is that the six fastener hole openings on the side of the beams are the same as six of the eight fastener hole openings on the end plate, but that there are two extra holes. It is unclear if Battlefrog escaped infringement by adding two extraneous holes or improved on the existing patent by providing alternate attaching configurations. While the Court did not directly address equivalency, there is an implication that the specific addressing of the word “same” by the examiner may have precluded consideration of an equivalency argument. The Court held there was no likelihood of success on the merits on patent infringement.

The Court next turned to the trade dress allegations, noting three necessary requirements for Modtruss to prove: “(1) the defendant’s product is confusing similar to its product; (2) the similar features of the two products are primarily non-functional; and (3) the plaintiff’s product is distinctive.” Miller’s Ale House, Inc. v. Boynton Carolina Ale House, LLC, 702 F.3d 1312, 1322 (11^th Cir. 2012).

Judge Ross noted that the primary distinctive characteristic of Modtruss’s product on which it relied for its trade dress claim was that its product was primarily a “sparkly aluminum” color, which the Court agreed was non-functional. Yet Modtruss’s evidence showed that it achieved its “sparkly brushed aluminum” finish through a unique process. On the other hand, the evidence was that Battlefrog’s aluminum color was merely the raw aluminum. In addition, both parties used different colors and Modtruss failed to establish that its “sparkly aluminum color” had acquired secondary meaning in the mind of the public. Therefore, there was no likelihood of success on the merits on Modtruss’s trade dress claims.

The Court turned next to irreparable harm, noting that its analysis was effected by the failure of Modtruss to establish a likelihood of success on the merits of either of its substantive claims. In addition, Judge Ross noted that Modtruss had raised safety concerns with Battlefrog’s product and potential harm to its reputation and goodwill from product failures. However, the Court went over evidence that the product had been changed and no further safety failures had occurred, making this potential loss too remote and speculative.

In turning to Modtruss’s loss of market share arguments, the Court noted that Defendant does not sell the Accused Obstacles (but merely uses them in providing services) and, thus, Modtruss and Battlefrog are not competitors. ActiveVideo Networks, Inc. v. Verizon Commc’ns, Inc., 694 F.3d 1312, 1339 (Fed. Cir. 2012) (there was no irreparable harm where the parties did “not share a customer base”). Modtruss’s loss of market share is from Battlefrog’s failure to purchase from Modtruss – a loss compensable by damages. A pre-suit offer by Modtruss to license Battlefrog was also found to undercut its irreparable harm assertions.

Due to potential cancellations of upcoming events and the necessity to reconstruct its obstacles, the Court found that the balance of the equities favored Battlefrog. Similarly, the lack of likelihood of success on the merits prevented the public interest from favoring Modtruss.

In short, Modtruss failed to carry its heavy burden of persuasion for the extraordinary relief sought, and the Court denied the motion.

The order is Modtruss, Inc. v. Battlefrog LLC, Docket no. 44, 1:16-CV-1317-ELR, decided June 24, 2016, in the United States District Court for the Northern District of Georgia, Atlanta Division, entered by Judge Eleanor L. Ross.

Judge Totenberg Grants Stay of Litigation Pending IPR Proceeding

noreply@blogger.com (Unknown) — Mon, 27 Jun 2016 14:09:00 +0000

ETS-Lindgren, Inc. (“ETS”), as the assignee of U.S. Patent No. 8,331,869 ("the '869 patent") pertaining to testing wireless devices, brought an infringement action against MVG, Inc. (“MVG”), on May 28, 2015. MVG petitioned the Patent Trial and Appeal Baord (“PTAB”) almost a year later, on April 12, 2016, for inter partes review (“IPR”) of the '869 patent. This filing was shortly followed by ETS’s motion to stay.

Judge Totenberg noted her discretion to stay the pending action pending the PTAB’s review. See Procter & Gamble Co. v. Kraft Foods Global, Inc., 549 F.3d 842, 848-49 (Fed. Cir. 2008). The Order set forth the three factors to be considered by the Court:

(1) “whether discovery is complete and a trial date has been set”;

(2) “whether a stay will simplify the issues in the case”; and

(3) “whether a stay would unduly prejudice or present a tactical disadvantage to the nonmovant.”

Id. (citing Xerox Corp. v. 3Com Corp., 69 F. Supp. 2d 404, 406 (W.D.N.Y. 1999)); accord Intellectual Ventures II LLC v. SunTrust Banks, Inc., No. 1:13-cv-02454-WSC, 2014 WL 5019911 (N.D. Ga. Oct. 7, 2014).

Noting that discovery was not complete, no depositions had been taken, no Markman hearing had been held, and a trial date had not bee set, Judge Totenberg found “intra-case timing weighs in favor of a stay.”

The Court noted that simplification by the IPR could occur in three ways: (1) claims could be found unpatentable; (2) the IPR could find anticipation or obviousness precluded one or more claims (binding MVG from relying on those defenses), or (3) a refusal to grant the IPR potentially because the claims are indefinite and “simply cannot be construed and compared to the prior art.”

According to the ruling, prejudice or disadvantage to the non-movant was either neutral of only slightly against a stay. MVG did not have other counterclaims unrelated to patent validity and did not argue the presence of any witness location or retention issues. The Court noted the quick resolution required of the PTAB and that the IPR had been initiated by MVG. The Court did not feel any tactical disadvantages to MVG as a result of another case between the same parties proceeding before Judge Steve Jones was “sufficient to overcome the benefits of a stay in this case.”

The case was administratively closed following the entry of the stay.

The order is ETS-Lindgren, Inc. v. MVG, Inc., Docket no. 87, decided June 14, 2016, in 1:15-cv-03859-AT, in the United States District Court for the Northern District of Georgia, Atlanta Division, entered by Judge Amy Totenberg.

Amendment Moots Motions for Both Parties without Specific Adoption of Prior Filings

noreply@blogger.com (Unknown) — Wed, 15 Jun 2016 21:13:00 +0000

The latest order in a patent case in the Northern District of Georgia delves into the procedural niceties of federal practice, illustrating both how form continues to have power over substance and how the Court can nevertheless point the parties to a viable, low-cost solution.

This case involves a complaint by Modtruss, Inc. (“Modtruss”), for willful patent infringement and related claims filed on April 22, 2016, along with a motion for a temporary restraining order and preliminary injunction. Defendant, Battlefrog LLC (“Battlefrog”) filed a motion to dismiss prior to the May 25^th hearing date set on the motion.

The motion to dismiss was not ripe at the time of the May 25^th hearing and was thus not addressed by the Court. On June 3^rd, Modtruss filed a response to the motion to dismiss and the parties jointly asked the Court to stay discovery until the motion to dismiss was decided. Immediately thereafter, on the same day, Modtruss filed its “First Amended Complaint,” which added an additional claim for patent infringement, which almost mirrored an existing claim.

Judge Ross noted that the amended complaint was allowed as a matter of course pursuant to Fed. R. Civ. P. 15(a)(1)(B), but it effected an abandonment of the original pleading under Pintando v. Miami-Dade Hous. Agency, 501 F.3d 1241, 1243 (11^th Cir. 2007). As the original pleading was a nullity, the Court found the motion to dismiss was rendered moot citing several cases including Graham v. Copco, NO. CIV.A. 13-00249-CG-B, 2013 WL 5287613, at *1 (S.D. Ala. July 10, 2013). Judge Ross pointed out that the joint request for a stay of discovery until a moot motion was decided was inconsistent with the record as controlled by existing law.

The abandonment by amendment had the further effect of undermining the motion for TRO and preliminary injunction which had already been argued. Although the amendment sought injunctive relief (and was almost identical to the original complaint), it did not adopt the original motion and no additional motion for injunctive relief was filed.

Recognizing that the procedural effects of the amended filing did not appear consistent with the intent of Modtruss’ filings, the Court directed the parties to provide clarification. Defendant Battlefrog was required to respond to the amended complaint and directed to further file a notice on the docket, either that its motion to dismiss as originally filed applied to the amendment or that a new motion would be filed.

Similary, Plaintiff Modtruss was directed to file a notice explaining whether its original motion for a TRO and preliminary injunction should be treated as unchanged by the amendment or whether Modtruss intended to file a separate motion for TRO and preliminary injunction. Without further notice the Court stated that motion was moot. If Modtruss adopted the original motion, Judge Ross informed the parties that she would treat the briefing as complete.

The Court then granted the requested stay of discovery to allow further clarification from the parties before proceeding with the case.

The ruling illustrates that an apparently innocuous filing can have unintended consequences, if a party does not provide for an exception to the general operation of existing procedural law.

The case is Modtruss, Inc. v. Battlefrog LLC, Docket no. 1:16-CV-1317-ELR, decided June 6, 2016, in the United States District Court for the Northern District of Georgia, Atlanta Division, assigned to Judge Eleanor L. Ross.

Abstract Ideas Cannot be Permitted to Burden the "Basic Tools of Modern-Day Commercial and Social Interaction"

noreply@blogger.com (Unknown) — Mon, 28 Mar 2016 17:31:00 +0000

In a case originally filed in 2012, Judge Amy Totenberg granted Judgment on the Pleadings in favor of United Parcel Service, Inc. (“UPS”), and against Mobile Telecommunications Technologies, LLC (“MTel”), relating to U.S. Patent No. 5,786,748 (the ‘748 Patent). The patent, filed in 1997 and issued on July 28, 1998, addressed a method to track packages and provide status information with text messages. This case has been the subject of two earlier blog posts: “Court Recognizes Alice Decision Potentially Impacts Case by Allowing LateMotion for Judgment on Pleadings” (Order of August 4, 2015) and “Court Delivers Markman Order in UPS Case On Order ofText Message Deliveries” (Order of March 17, 2014).

In reciting the standard for granting a Motion for Judgment on the Pleadings, the Court concluded: “In essence, the pleading ‘must contain sufficient factual matter, accepted as true, to “state a claim to relief that is plausible on its face.”’” Order, p. 2, quoting Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009), quoting in turn Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007).

This case is unusual in that the July 2015 Motion for Judgment on the Pleadings followed a fully briefed Summary Judgment Motion on which a Special Master’s recommendation had already issued (on March 25, 2015). Noting that the motion “perhaps could have been filed sooner,” the Court nevertheless found the issue would likely be raised at trial and the Supreme Court case of Alice Corp. Pty. Ltd. v. CLS Bank Int’l, et al., 134 S. Ct. 2347 (2014), could be dispositive.

The Court recognized that “[s]triking the proper balance in identifying those ‘abstract ideas’ that are too ephemeral to be patentable is not an easy task.” Undaunted, the Court undertook this task with regard to the ‘748 Patent, which claimed a method for providing notification by wireless communications of an express mail delivery undelivered by the appointed time.

In assessing whether MTel’s patent addressed an abstract idea the Court tried to “detect the beating heart of the patent, its animating function.” Bancorp Servs., L.L.C. v. Sun Life Assur. Co. of Canada (U.S.), 687 F.3d 1266, 1279 (Fed. Cir. 2012).

The Court noted the two-part test identified by Alice. First, is the claim “directed to an abstract idea or other patent-ineligible concept.” Alice at 2355. Second, does the claim add “an ‘inventive concept’ that includes an element or combination of elements that is ‘sufficient to ensure that the patent in practice amounts to significantly more’ than the abstract idea itself.” Id. at 2355. Describing in general terms a series of conventional steps will not suffice. Id. at 2357.

Judge Totenberg found the recent case of Wireless Media Innovations, LLC v. Maher Terminals, LLC, 100 F.Supp.3d 405, 417 (D.N.J. 2015) aff’d per curiam 208 WL 463218 (Fed. Cir. Feb. 8, 2016), persuasive and strikingly similar. In Wireless Media specifying monitoring details relating to the location and load status of shipping containers did not “overcome the fact that the core of the claim was about a basic organizational business process.” Id. The Court distinguished method patents that addressed “a specific piece of technology or technological problem.” Order at 10.

Judge Totenberg found that the animating goal of the ‘748 Patent was to notify customers whether a package had arrived or not. “Delivery notification is . . . the kind of conventional business practice long ‘prevalent in our system of commerce.’” Order at 11. The patent “concerns a longstanding ‘method of organizing human activity.’” Order at 12.

Having found that the ‘748 Patent addressed an abstract idea, the Court next addressed whether it contained an “inventive concept” to carry it “across the threshold of patentability.” Order at 12. An “inventive concept” is required in order “to ensure that the claim is more than a drafting effort designed to monopolize the abstract idea.” Aliceat 2357. Time after time the introduction of a computer configured to practice the method has been found insufficient. Order at 13. The Court further noted that the “machine or transformation” test is no longer “sufficient by itself.” Order n. 2 citing Vehicle Intelligence and Safety, LLC v. Mercedes-Benz USA, LLC, 2015 WL 9461707, at *4 (Fed. Cir. Dec. 28, 2015). Judge Totenberg found a concurring opinion of Judge Mayer particularly relevant to her analysis: “generic computers and the internet are ‘the basic tools of modern-day commercial and social interaction,’ and their use should remain ‘free to all men and reserved exclusively to none.’” Order at 15, quoting Ultramercial, Inc. v. Hulu, LLC, 772 F.3d 709, 723 (Fed. Cir. 2014) (Mayer, J., concurring).

The “inventive concept” addition is determined by quality not quantity. Order at 16. The Court noted that MTel’s limitations only served to illustrate that its purpose was to capture a specific technological implementation of a known business practice. Arguments that UPS could perform the function of the patent with voice-communications and not just text ran against MTel’s arguments that the concept was innovative. Order at 17-19.

In rejecting MTel’s arguments that UPS’s assertion of Section 101 was waived by its tardiness, the Court noted that patent eligibility is a question of law, and thus MTel was not prejudiced on the merits by an inability to develop the factual record. Order at 21. However, the Court noted its wide discretion in awarding costs and referenced the additional costs incurred by MTel as a result of UPS’s delay in affording the parties an opportunity to engage in settlement discussions before a final order is entered.

The case is Mobile Telecommunications Technologies, LLC v. United Parcel Service, Inc., No. 1:12-cv-03222-AT, Dkt. 161, entered in the U.S. District Court for the Northern District of Georgia, Atlanta Division, on March 24, 2016, by U.S. District Judge Amy Totenberg.

NaturaLawn Attempts to Clip the Competition, brings Trademark Suit against Naturescape

noreply@blogger.com (Emily Scheible) — Fri, 18 Mar 2016 12:52:00 +0000

On February 23, 2016, Signum, LLC and NaturaLawn of America, Inc. (collectively, “NaturaLawn”), Maryland-based companies, filed a complaint in the Northern District of Georgia alleging trademark infringement, false designation of origin and unfair competition against Naturescape, Inc. (“Naturescape”), a Wisconsin corporation, due to its use of the mark NATURE’SLAWN.

NaturaLawn, according to the complaint, is a nationwide leader in lawn care services with over 27 years’ experience and over 70 franchises across 23 states. The complaint relates to two of NaturaLawn’s registered trademarks, Registration Nos. 1,414,588 and 2,543,921 for NATURLAWN and NATURALAWN , respectively.

Naturescape filed an intent-to-use trademark application for NATURE’SLAWN (Ser. No. 86521202), which NaturaLawn opposed during the opposition period. On March 1, NaturaLawn filed a Motion to Suspend the Opposition due to the civil trial, which has not been granted at this time.

While NaturaLawn does not currently offer services in the Atlanta market, according to the complaint, it has had Atlanta franchisees in the past and is in talks with potential franchisees to re-open in the area. Naturescape recently opened lawn care services in the Atlanta area using the name NATURE’SLAWN, instead of their company name, Naturescape, which they allegedly use in all other locations.

NaturaLawn claims it requested Naturescape to cease using the NATURE’SLAWN mark, however when it did not, NaturaLawn brought this suit asserting trademark infringement, false designation of origin and unfair competition.

NaturaLawn seeks an injunction, destruction of all of Naturescape’s advertising materials in relation to NATURE’SLAWN, withdrawal of the NATURE’SLAWN application, attorney’s fees and any further relief the court deems necessary.

The case is Signum, LLC and Naturalawn of America, Inc. v. Naturescape, Inc.., No. 1:16-cv-00560-WCO, filed 02/23/16 in the U.S. District Court for the Northern District of Georgia, Atlanta Division, and assigned to U.S. District Judge William C. O’Kelley.

Patent Dispute over Unmanned Aerial Vehicles Launched in the Northern District of Georgia

noreply@blogger.com (Unknown) — Wed, 17 Feb 2016 15:45:00 +0000

Burkhard Wiggerich (“Wiggerich”), a German citizen residing in Arnsberg, Germany, commenced a patent infringement action against a Kansas limited liability Company, Blue-Chip Unmanned Aerial Solutions, LLC (“Blue-Chip”), on November 30, 2015 in the Northern District of Georgia. The complaint asserts infringement of United States Patent Number 8,238,128(the ‘128 Patent), which Wiggerich claims to have invented and own, and relates to unmanned aerial vehicles.

Wiggerich asserts personal jurisdiction over Blue-Chip in part due to Defendant’s placement of “infringing devices into the stream of commerce” – a legal concept which potentially takes on new meaning with unmanned aerial vehicles.

Blue-Chip’s founders are promoted on its website as being military veterans who specialized in unmanned aerial vehicles (UAVs) and UAV operations. The website declares “they were instrumental in successfully integrating UAS operations and training into high level DoD and DHS exercises both at home and abroad.”

Wiggerich is the Managing Director of AirRobot GmbH & Co. and a Director of AirRobot US Inc., a Virginia corporation. Figure 2 from the ‘128 Patent and an image from the web of an AirRobot unmanned aerial vehicle are pictured below:

The complaint asserts that Blue-Chip is liable for direct infringement of ‘128 patent , as well as for contributory and induced infringement. The complaint alleges that the infringement has been and continues to be “willful, deliberate and intentional,” and that Wiggerich has suffered direct and proximate monetary damages. Wiggerich prays for an injunction, an award of damages, a finding that the case is exceptional, an award trebling the damages because of the willful and intentional infringement, and reasonable attorney fees.

The case is Burkhard Wiggerich v. Blue-Chip Unmanned Aerial Solutions, LLC, No. 1:15-cv-04156, filed in the U.S. District Court for the Northern District of Georgia, Atlanta Division, on November 30, 2015, and assigned to U.S. District Judge Thomas W. Thrash, Jr.

New Georgia Statute on Bad Faith Patent Cases May Discourage Both Weak and Strong Cases from Being Brought in Georgia

noreply@blogger.com (Unknown) — Tue, 19 Jan 2016 19:11:00 +0000

Plaintiff Walter Farmer (“Farmer”) initiated suit in September 2014 asserting infringement of claim 1 of his U.S. Patent No. 7,362,007 (the “’007 Patent”), issued April 22, 2008, and covering uninterruptable power supply technology (“UPS”) products against Alpha Technologies, Inc. (“Alpha”). Alpha moved pursuant to a relatively new Georgia statute, O.C.G.A. §10-1-772 et seq., for an order requiring Farmer to post a $250,000 bond because of Farmer's alleged bad faith patent assertion. The motion was addressed by Special Master James L. Ewing, IV in a 29-page Recommendation and Opinion that was adopted by Judge Leigh Martin May on December 9, 2015.

Special Master Ewing detailed a series of communications over several months beginning in April 2014 between the parties whereby Farmer informed Alpha of the perceived infringement by providing a claim chart and Alpha requested time to investigate the matter. After Alpha missed its own September deadline, Farmer initiated action but held off service in a further effort to resolve the matter. Alpha requested that Farmer hold off service until December 5 by which time it would substantively respond. Alpha submitted a response on December 5 denying infringement and asserting invalidity (without providing a claim chart). Alpha further asserted that it appeared “that Mr. Farmer failed to conduct an adequate investigation and analysis” though no reasoning was provided for this conclusion.

Farmer filed a return of service on January 29, 2015. The Special Master then considered O.C.G.A. §10-1-772 in connection with Alpha’s motion. That statute sets for nine factors that may be considered tending to support the requirement of bond and seven that may be considered in denying bond.

The nine factors potentially favoring requirement of a bond are:

(1) The demand letter fails to include the patent number, the name and address of the owners or any assignees, and fails to show specifically how the recipient’s products are covered by claims of the patent;

(2) Prior to sending the demand letter no analysis comparing the claims to the accused products was done or the analysis failed to identify specific areas in which the accused products were covered by claims;

(3) The recipient requested information omitted from the demand letter (as specified in 1) and that information is not provided;

(4) The demand letter demands a license fee or response within an unreasonably short time;

(5) A license is offered for an amount not reasonably based on a reasonable estimate of the value of the patent;

(6) The asserted claim is meritless or should have been known to be so;

(7) The claim or assertion is deceptive;

(8) Other similar claims of patent infringement have been asserted and information listed in these factors was not provided or a cout has found those similar claims to be meritless; or

(9) Any other factor the court finds relevant.

The seven factors which may be considered in support of a finding that there was no bad faith assertion are:

(1) The demand letter included the patent number, name of owners and assignees, if any, and showed specifically how the accused product was covered by the claims;

(2) The author of the demand letter provided any undisclosed information within a reasonable time after request;

(3) The author of the demand letter engaged in a good faith effort to establish infringement and to negotiate an appropriate remedy;

(4) The author of the demand letter has made a substantial investment in using or producing the patent or selling an item covered by its claims;

(5) The author of the demand letter is an inventor or original assignee, or is affiliated with an institution of higher education;

(6) The author has demonstrated good faith business practices in prior efforts to enforce the patent (or a substantially similar patent) or successfully enforced the patent (or a substantially similar patent); or

(7) any other factor the court finds relevant.

The Special Master addressed the factors in detail over 11 pages of his Recommendation and Report. The comprehensive analysis found that the factors in each and every instance addressed favored denial of the motion. Nevertheless, there was no sua sponte criticism of Alpha for bringing the motion. Although the statute may require a plaintiff to defend a motion with little basis, neither the statute nor the Special Master, in this instance, portend any risk to a defendant for pursuing motion that does not satisfy any of the statute factors (much less a majority of them).In providing his analysis, the Special Master found it unnecessary to address whether or not the Georgia statute had been preempted by federal law. The Special Master found no reasonable likelihood that Farmer made a bad faith assertion of patent infringement, and with respect to each factor he found the position of Farmer superior to the position of Alpha. The Special Master’s Recommendation and Opinion was adopted by Judge May in full without objection by the parties.

O.C.G.A. § 10-1-772 should serve as a road map to all counsel prior to filing a patent infringement action in Georgia. There are two areas where it may have particular impact.

First, non-practicing entities may be less inclined to initiate patent suits in Georgia as they may be subjected to motions and potential bond requirements that can be avoided elsewhere, and this statute makes it at least appear that the state is less receptive to NPE suits.

Second, companies that want to assert patents in Georgia need to be mindful of the interplay between this new statute and the First-to-File rule, which strongly favors the choice of forum of the party first filing a patent infringement suit or suit for declaratory judgment on the patent. See Michael A. Cicero, "First-to-file and Choice-of-Forum Roots Run too Deep for Micron to Curb Most Races to the Courthouse," Journal of the Patent and Trademark Office Society, August 2008, Vol. 90, No. 8, at 541-614. See also Electronics for Imaging, Inc. v. Coyle, 394 F.3d 1341, 1347-1348 (Fed. Cir. 2005) (discussing anticipation alone insufficient to overcome First-to-File Rule being favored).

A party seeking to send a demand letter in keeping the statute will usually want to avoid jurisdiction preemption by an infringing party (with a suit for declaratory judgment). The statute, therefore, may require adoption of a strategy that takes the First-to-File rule into account. For example, a conservative approach might involve sending a demand letter showing conformance with the statute and allowing a reasonable time for response. The letter could be carefully drafted to satisfy an exception to the First-to-File Rule as discussed in T2 Products, LLC v. Advantus Corp., 2014 WL 4181932 at 2-4 (W.D.N.C.), and in Nutrition & Fitness, Inc. v. Blue Stuff, Inc., 264 F.Supp.2d 357, 360-362 (W.D.N.C. 2003). Under this approach, the recipient could be given an opportunity to further assist in expanding or clarifying the results of the infringement investigation (as described in the letter) and to respond to a claim chart. Yet, in addition, the letter could inform the recipient that litigation was imminent if contrary facts, opinions, and other information were not provided within a reasonable time. The letter could propose thirty days as a reasonable time to respond, but might wisely indicate receptiveness to a longer period based on a reasonable request. The letter could assert an objective of ensuring a full and fair decision on infringement was made before litigation commenced, but that, absent timely additional information, litigation was imminent and would be promptly commenced upon expiration of recipient's period to respond. The paragraph could conclude with a statement that the letter was further intended to reasonably notify recipient of the status of the investigation and dispute, so as to avoid any necessity (or reasonableness) of anticipatory litigation on the part of recipient. There are a number of factual specific considerations that must be taken into account in connection with this approach (for example, if a patent holder has a history of making unfulfilled threats, uncertainty remains - weighing against the exception).

The First-to-File Rule has not lost its vitality and allows for a great deal of judicial discretion. Therefore, no matter how good the strategy, there can be no guarantee of success to the patent holder in ultimately moving forward in the desired forum.

In the final analysis, O.C.G.A. § 10-1-772 will likely discourage NPEs from pursuing claims with little merit in Georgia as designed, but the statute also complicates the strategic approach of Praciticing Entities and NPEs with stronger claims who desire to pursue a patent infringement claim in the state. A number of patent holders may elect to pursue claims in other jurisdictions where there is less risk (or cost) in ensuring that jursidiction can be obtained and retained in the forum preferred by the patent holder.

For more information on the new statute, we recommend the detailed article by Jeffrey R. Kuester and Michael A Cicero entitled “Georgia’s New Patent Law: Bad Faith Threats of Infringement Create New Liabilities,” Georgia Bar Journal, Vol. 20, Number 4, December 2014, at 12.

Walter Farmer v. Alpha Technologies, Inc., Dkt. No. 62, Case No. 1:14-cv-2958-LMM (N.D. Ga. Dec. 9, 2015), adopting the Recommendation and Opinion of Special Master James L. Ewing, IV, Dkt. No. 61, filed November 18, 2015.

Beaulieu Group Floored by Competitor Mohawk’s Application and Use of New Mark for Residential Carpet

noreply@blogger.com (Emily Scheible) — Tue, 20 Oct 2015 15:10:00 +0000

On September 30, 2015, Beaulieu Group, LLC(“Beaulieu”), a Georgia Corporation, brought a trademark infringement action against Mohawk Carpet Distribution, Inc. (“Mohawk”), a Delaware corporation with a principal place of business in Calhoun, Georgia. The complaint asserts claims for trademark infringement, false designation of origin and unfair competition (state and federal).

According to the complaint, Beaulieu is a global company that manufactures and sells a wide variety of flooring products, including carpet, carpet tiles and luxury vinyl flooring. Part of Beaulieu’s residential carpet product line is marketed under its "Bliss by Beaulieu" brand, including its EverClean collection, which is the mark at issue in this complaint. Beaulieu owns the trademark BLISS BY BEAULIEU EVERCLEAN (U.S. Reg. No. 4,293,216) and has applied for the mark EVERCLEAN (collectively, “EVERCLEAN Marks”) and alleges that these marks are an integral part of the Beaulieu Bliss product line and overall brand identity.

On August 19, 2014, Mohawk sought to register the mark SMARTSTRAND FOREVER CLEAN (App. No. 86/370,536) on an intent-to-use basis. Shortly after, Beaulieu filed an Opposition Proceeding, which is pending, requesting that the TTAB deny Mohawk’s registration on the basis of its EVERCLEAN marks. Beaulieu alleges that Mohawk has since begun to use, and is currently using, the SMARTSTRAND FOREVER CLEAN mark, which it argues is an attempt to capitalize on Beaulieu’s goodwill and is further confusing to consumers.

Beaulieu’s argument is that the marks are not only substantially similar with the use of words “ever” and “clean”, but because the goods are in the same industry consumers will likely be deceived as to the association, or lack thereof, between the brands. Further, Beaulieu cites Mohawk’s advertising strategy as an additional layer of deception to consumers, as Mohawk states their carpet is “the perfect carpet for families with kids and pets” and Beaulieu has advertised their carpet as the “carpet pet owners love to love!” Consumer confusion is an issue for companies as they typically do not have quality control over the competitor’s product, even though they may be wrongly associated with that product.

Beaulieu demanded a jury trial and asked for a permanent injunction restraining Mohawk from using SMARTSTRAND FOREVER CLEAN or any similar mark, damages, including attorneys’ fees and costs, as well as punitive damages, to be increased three times the amount thereof and lastly, a preliminary injunction forbidding Mohawk from registering or attempting to register the SMARTSTRAND FOREVER CLEAN mark. Mohawk waived service of the complaint, and its answer is currently due on November 30, 2015.

These competitors have another trademark infringement case pending, Beaulieu Group, LLC v. Mohawk Industries, Inc., No. 4:15-cv-00124-HLM (N.D. Ga.), which was filed in July of 2015.

This case is Beaulieu Group, LLC v. Mohawk Carpet Distribution, Inc., No. 4:15-cv-00184-HLM, filed 09/30/15 in the U.S. District Court for the Northern District of Georgia, Rome Division, and assigned to U.S. District Judge Harold L. Murphy.

Hi-Tech Accuses Dynamic of Trademark Infringement and False Claims of Steroid Powered Products

noreply@blogger.com (Unknown) — Tue, 06 Oct 2015 20:40:00 +0000

On September 28, 2015, Hi-Tech Pharmaceuticals, Inc. (“Hi-Tech”), a Georgia corporation, brought a trademark infringement action against Dynamic Sports Nutrition, LLC d/b/a Anabolic Research (“Dynamic”), and Brian Clapp (“Clapp”) (collectively Dynamic and Clapp are referred to as “Defendants”). The complaint asserts claims for trademark infringement, false designation of origin and unfair competition (state and federal), false advertising, deceptive trade practices, and Georgia RICO violations.

Hi-Tech, according to the complaint, “is a producer of high quality dietary supplements, including numerous products designed for muscle and body building, such as testosterone boosters, muscle-gainers, muscle preservation products, and legal hormone boosters.” The complaint relates to DIANABOL® - “a muscle preservation dietary supplement for consumers seeking to gain muscle.” Hi-Tech owns the registration to this mark (U.S. Reg. No. 3,378,354).

Dynamic has sought a trademark for D-Anabol 25 (U.S.Serial No. 85/280,036), which was denied by the USPTO based on the DIANABOL® mark. The below image pictures the products of the two companies side by side.

The Hi-Tech Complaint paints a comprehensive picture quoting the USPTO's Office Action denying registration in paragraphs 23 and 24:

Online literature and/or advertisements for applicant’s product [DSN’s D-ANABOL] demonstrate that applicant’s and registrant’s [Hi-Tech’s] goods are: (1) marketed through the same channels; (2) directed to the same potential customers; and (3) even promoted as comparable competing products wherein they provide, in part, ‘If you are looking to buy Dinabol … online, our D-anabol 25 is exactly what you need. . . . The dominate feature of the applicant’s mark is nearly identical in appearance to registrant’s mark. The letter I is merely replaced with a hyphen.

Hi-Tech cites a number of different websites used by Defendants to promote the product, including www.BuySteroids.com, www.Steroid.com, and www.RoidStore.com. Communications between representatives of Hi-Tech and Clapp are referenced that illustrate, according to the complaint, a pattern of deception regarding Clapp’s relationship with Dynamic and his interest protecting intellectual property rights. After Hi-Tech learned of Clapp’s relationship, the complaint asserts that Clapp asserted that D-ANABOL 25 had an earlier first use date and that Dynamic continued to use that mark even after the claimed misperception of first use date was straightened out.

In paragraphs 56 through 123, the complaint set forth detailed allegations of specific false advertising claims alleged to have been made by Dynamic, including the mischaracterization of ingredients used in Dynamic products and the effect of the disclosed ingredients. It remains to be seen whether the opening foray in this litigation will be vigorously opposed or the suit will be quickly settled, as often occurs with trademark lawsuits.

The case is Hi-Tech Pharmaceuticals, Inc. v. Dynamic Sports LLC, et al., No. 1:15-cv-03393-MHC, filed 09/28/15 in the U.S. District Court for the Northern District of Georgia, Atlanta Division, and assigned to U.S. District Judge Mark H. Cohen.

NexusCard Seeks Wonderland in Georgia After Alice Motion in Texas

noreply@blogger.com (Unknown) — Thu, 24 Sep 2015 17:54:00 +0000

NexusCard, Inc. (“NexusCard”), a California corporation with its principal place of business in Lake Forest, California, filed a patent infringement action on August 18, 2015, against grocery chain Winn-Dixie Stores, Inc. (“Winn-Dixie”), a Florida corporation, with a principal place of business in Jacksonville, Florida, relating to 5,924,080(the ‘080 Patent) directed to a computerized discount redemption system, which published on July 13, 1999. Figure 1 from the ‘080 Patent is reproduced below:

NexusCard asserts that the Winn-Dixie Rewards Program incorporates all the elements of several claims of the ‘080 Patent. As can be seen from Figure 1 above, the ‘080 Patent details the steps routinely employed in seemingly all retail point-of-sale rewards programs. In addition, other claims of the '080 patent cover related activities such as advertising the program and analyzing the data.

The prayer for relief does not seek lost profits, a recovery for willful infringement, or a finding that the case is exceptional. Instead, NexusCard merely seeks a reasonable royalty plus prejudgment and post-judgment interest plus “such other and further relief as the Court may deem just and proper."

In June, NexusCard filed similar suits against other grocery and pharmacy chains, including Kroger, Walgreens, and CVS, in the Eastern District of Texas. Several of those cases have already been settled and dismissed, but Kroger opted to file a motion to dismiss on the basis that the '080 patent is directed to unpatentable subject matter and therefore is invalid under 35 U.S.C. § 101 in view of the Supreme Court's guidance in Alice Corp. Pty. Ltd. v. CLS Bank Int'l, 134 S. Ct. 2347 (2014) and decisions of other courts following Alice. A defendant in a separate case filed a similar motion to dismiss, and also asserted that NexusCard failed to state a plausible claim for direct or indirect infringement. NexusCard filed the current suit against Winn-Dixie while those motions to dismiss were pending, showing no hesitation to move forward despite any concerns raised as to the '080 patent's validity in the Texas suits.

The case is NexusCard, Inc. v. Winn-Dixie Stores, Inc., No. 4:15-cv-138, filed in the U.S. District Court for the Middle District of Georgia, Columbus Division, on August 18, 2015, and assigned to U.S. District Judge Clay D. Land

Atlanta Rapper Rich Homie Quan Seeks Cancellation or Transfer of Trademarks and Over $2,000,000 in Damages

noreply@blogger.com (Preston Heard) — Wed, 12 Aug 2015 15:47:00 +0000

Think It's A Game Entertainment, LLC ("TIG"), an Atlanta-based production company, Fly Merchandise Enterprises, LLC ("Fly"), and Girvan Henry ("Henry"), have left Atlanta rapper Rich Homie Quan feeling "some type of way."

Dequantes Lamar, better known by his stage name "Rich Homie Quan" ("Quan"), filed suit in the Northern District of Georgia against TIG, Fly, and Henry, alleging he incurred over $2,000,000 in damages based on a number of causes of action, including breach of contract, trademark infringement, and unfair competition.

Quan has achieved notoriety in recent years for his recording singles, "Type of Way" (certified Gold by the RIAA according to the complaint) and "Flex," among others. The complaint alleges that Quan and TIG signed a "memorandum purporting to be a recording agreement," which called for Quan to receive a $19,200 advance and 50% of all profits from sales of Quan's records. Quan alleges that the advance and the 50% split have not been paid. According to the complaint, Quan "did not have the benefit of legal representation at the time he entered into the TIG Memorandum, nor was he advised to seek counsel." Further, the complaint states that without Quan's consent Defendants entered into separate agreements with other record labels, including Def Jam. Under those separate agreements, the Defendants were paid several hundred thousand dollars as an advance and further royalties from sales of Quan's music, which the complaint alleges were never passed on to Quan.

According to the complaint, Henry and Fly also filed and obtained trademark registrations for "RICH HOMIE QUAN" and a corresponding logo, shown below, which issued as U.S. Reg. No. 4,483,756 and U.S. Reg. No. 4,746,133, respectively. Quan alleges that these applications were filed without his consent or knowledge, and that he is not listed as a "creator, author, or owner" of the marks, despite his use of the "Rich Homie Quan" stage name in connection with his career in entertainment. The complaint seeks a finding that the Defendants committed fraud on the PTO, and asks the Court to cancel the registrations or, in the alternative, to transfer ownership of the marks to him. The complaint alleges that Defendants' conduct also amounts to unfair competition under the Lanham Act, and seeks redress for damages incurred in connection with Defendants' use of the marks.

"Rich Homie Quan Logo" - U.S. Reg. No. 4,746,133

The complaint also seeks to have the "memorandum" declared unenforceable for lacking "material terms" and that the agreement be rescinded, or in the alternative, for breach of contract. The complaint further contains counts for breach of fiduciary duty, unjust enrichment, conversion, and violation of the Georgia Deceptive Trade Practices Act (O.C.G.A. 10-1-370). Quan seeks equitable title to assets purchased with "funds due Artist" relating to the agreement, recovery of damages, and attorneys' fees and costs.

The case is Lamar v. Think It's A Game Entertainment, LLC et al., Case No. 1:15-cv-2775-TCB, filed August 5, 2015 in the Northern District of Georgia, Atlanta Division, and is assigned to Judge Timothy Batten.

Court Recognizes Alice Decision Potentially Impacts Case by Allowing Late Motion for Judgment on Pleadings

noreply@blogger.com (Unknown) — Tue, 11 Aug 2015 14:23:00 +0000

Mobile Telecommunications Technologies, LLC (“Mobile”)[background on company], initiated a patent infringement case against United Parcel Service, Inc. (“UPS”), in 2012 on U.S. Patent No. 5,786,748 on a method and apparatus for giving notification of express mail delivery.

UPS filed a Motion for Summary Judgment [Dkt. 95], which was submitted to a Special Master for consideration. The Special Master issued a Report and Recommendation (“R&R”) [Dkt. 139] on July 8, 2015, recommending that the motion be granted in part and denied in part. Both parties filed objections to the R&R [Dkts. 142 and 143]. In addition to its objection, UPS filed a motion for judgment on the pleadings [Dkt. 145] arguing that the asserted patent should be found invalid under 35 U.S.C. 101 in light of the Supreme Court's decision in Alice Corp. Pty. Ltd. v. CLS Bank Int’l, et al., 134 S.Ct. 2347, 2350 (2014). In Alice, the Supreme Court emphasized that “a patent-ineligible concept” or “abstract idea” is not made patentable by “generic computer implementation” described as a method claim. Id.

Judge Totenberg agreed with UPS that the resolution of this motion could obviate the need for deciding the summary judgment motion, and she therefore decided to allow the motion despite its lateness in the procedural timeline. She ruled that it presented a threshold question of validity, which, “in the interest of judicial economy and efficiency,” was not appropriately deferred to trial.

The Court removed the pending summary judgment motion from the docket by denying it without prejudice, but committed to reviving the motion herself if UPS’s motion for judgment on the pleadings is denied. This action achieved the removal of a decision on the summary judgment motion from the Court’s time tracking requirements, while avoiding adding a burden on either party to resurrect the summary judgment motion.

The case is Mobile Telecommunications Technologies, LLC v. United Parcel Service, Inc., Docket No. 148, decided August 4, 2015, in 1:12-cv-032223-AT, in the United States District Court for the Northern District of Georgia, Atlanta Division, assigned to Judge Amy Totenberg.

Judge Ross Examines Morass of Pleadings and Refines Dispute to Supported Claims of Patent, Copyright, and Trade Dress Infringement

noreply@blogger.com (Unknown) — Tue, 04 Aug 2015 14:36:00 +0000

In an earlier post today we reported on the Third Amended Complaint filed by Lisa Duer (“Duer”), a resident of Woodstock, Georgia, alleging patent infringement, trademark infringement, copyright infringement, and trade dress infringement action against Bensussen Deutsch & Associates, Inc. (“BDA”), a Washington corporation, and Eli Lilly and Company (“Lilly”), an Indiana corporation (collectively the “Defendants”). This post addresses Judge Eleanor L. Ross’s Order of July 8, 2015, which gave rise to that filing.

On July 8, Judge Ross ruled on three motions, one filed by Defendants and two by Plaintiffs. The Court granted in part and denied in part the motion to dismiss of the Defendants and the motion to allow a Second Amended Complaint by Duer and denied Duer’s motion to file the Third Amended Complaint “as currently submitted.” However, the Court allowed a more limited Third Amended Complaint – “limited to the inclusion of Plaintiff’s additional trademark infringement claim.”

The procedural history of the case includes an original motion to dismiss and a response which included a Proposed Second Amended Complaint to cure deficiencies, which Defendants contended remained uncured. This gave rise to Plaintiff’s request for leave to file a Third Amended Complaint. In denying the motion to file the Third Amended Complaint as submitted, the Court addressed the issues that remained for decision in the Second Amended Complaint. The Court assumed the facts alleged by Plaintiff were true and those facts, as contained in the Third Amended Complaint filed in accordance with the Court’s Order, were set forth in our prior post. The picture of Plaintiff’s product is repeated here, and the facts as alleged by Plaintiff can be reviewed in our prior post.

In reviewing the motion to dismiss the Court referred to the so-called “plausibility standard” and distinguished that standard from a “probability requirement” citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 556 (2007): “Even if it is extremely unlikely that a plaintiff will recover, a complaint may nevertheless survive a motion to dismiss for failure to state a claim, and a court reviewing such a motion should bear in mind that it is testing the sufficiency of the complaint and not the merits of the case.” P. 5.

The Court first addressed trade dress infringement as alleged in Count III of the Second Amended Complaint. In order to state a trade dress infringement claim, the following elements must be alleged:

1) that the product design of the two products is confusingly similar; 2) the features of the produce design are primarily non-functional; and 3) the product design is inherently distinctive or has acquired secondary meaning.

Pp. 6-7, quoting RMS Titanic, Inc. v. Zaller, 978 F. Supp. 2d 1275, 1293 (N.D. Ga. 2013) (discussed in a prior post).

Defendants contended that the second and third elements were not adequately plead. In disagreeing, Judge Ross found with regard to the second element that the Plaintiff alleged the trade dress was non-functional and “the Court was not prepared to find that” . . . “the particular shape of the product, the vertical arrangement of the days of the week, and the chosen color scheme” were all functional. P. 7. While the existence of a utility patent claiming these features “is strong evidence that the features” . . . “are functional,” Duer is entitled to “the opportunity to ‘carry the heavy burden of showing that the feature[s are] not functional.’” P. 7, quoting TrafFix Devices, Inc. v. Mktg. Displays, Inc., 532 U.S. 23, 30 (2001). With regard to the third element, Judge Ross also found that whether or not the Plaintiff’s product has gained secondary meaning was a question of fact. P. 9, citing Conagra, Inc. v. Singleton, 743 F.2d 1508, 1513 (11^th Cir. 1984).

The Court noted five factors to be reviewed in determining acquisition of secondary meaning:

length and manner of use;
nature and extent of advertising and promotion;
efforts to promote a conscious connection between the public mind and the product;
identification of name with product or venture; and
existence of intentional copying.

P. 9, citing Conagra at 1513 and Brooks Shoe Mfg. Co. v. Suave Shoe Corp., 716 F.2d 854, 860 (11^th Cir. 1983) (for the fifth factor). The Court found these factors in sufficient abundance to survive the motion to dismiss.

The Court found Duer’s false advertising claim under the Lanham Act failed to state a claim because it only addressed a product insert, which by definition could not materially effect a purchase decision. P. 11 The Court dismissed the unfair competition claim under the Lanham Act because Duer did not allege that she was the “actual source of the physical goods distributed by BDA. P. 12.

Judge Ross found that Duer’s assertion of Georgia Uniform Deceptive Trade Practice Act and tortious interference with contract claims relied upon the identical facts relied upon for federal claims of copyright, patent and trade dress infringement and were preempted by the federal claims. Preemption by federal Copyright law is explicit, while the Court found at pages 13-14 that the claims were conflicting and stood "as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress." Hunter Douglas, Inc. v. Harmonic Design, Inc., 153 F.3d 1318, 1332 (Fed. Cir. 1998) [additional internal cites omitted].

The Court found Duer’s allegations amounted to a “reverse passing off claim,” where Defendants sold Duer’s product as if the product belonged to Defendants. This claim was of a nature preempted by the Copyright Act. P. 14, citing Gary Friedrich Enters., LLC v. Marvel Enters., Inc., 713 F. Supp. 2d 215, 220 (S.D.N.Y. 2010). Judge Ross was unpersuaded by Duer’s argument that an additional element of deception beyond copyright infringement was involved (as the Court found this element an implicit part of the copyright infringement claim). The analysis of the tortious interference claim followed the same reasoning and was not saved from preemption by the existence of a breached license to which Duer was not a party.

Judge Ross dismissed Duer’s allegations of fraud for failing to plead with particularity (1) the falsity of the representations made or that statements as to future performance were known not to be true when made; (2) allegations of Defendants’ gains from the fraud; and (3) allegations of fraud on customers are not actionable as not being made to Duer. Because Duer’s punitive damage claim was premised only on fraud, it too must be dismissed.

The Court agreed with Defendants that Duer had been on notice of the deficiencies in the false and deceptive advertising, unfair competition, deceptive trade practices, tortious interference, and fraud claims before submitting its final proposed amendment and therefore those claims were dismissed with prejudice. The punitive damages claim was also dismissed, though not with prejudice.

The case is Lisa Duer v. Bensussen Deutsch & Associates, Inc., and Eli Lilly and Company, No. 1:14-cv-01589-ELR, Dkt. 110, decided July 8, 2015, by Judge Eleanor L. Ross in the U.S. District Court for the Northern District of Georgia, Atlanta Division.

Individual Inventor Alleges Eli Lilly and BDA Overdosed on Patented Dosage Adherence Tool

noreply@blogger.com (Unknown) — Tue, 04 Aug 2015 13:56:00 +0000

In the latest chapter of a year-long battle between an individual inventor and two companies, Lisa Duer (“Duer”), a resident of Woodstock, Georgia, filed her Third Amended Complaint alleging patent infringement, trademark infringement, copyright infringement, and trade dress infringement action on July 24, 2015 against Bensussen Deutsch & Associates, Inc. (“BDA”), a Washington corporation, and Eli Lilly and Company (“Lilly”), an Indiana corporation. The amendment was filed pursuant to an Order entered by Judge Eleanor L. Ross on July 8, 2015, which is discussed in a parallel post.

The amended complaint paints a picture of systematic corporate abuse of a small business owner by BDA and Lilly in which they recognized the value of Duer’s established product, negotiated to license the product, and then, when Duer found some terms unacceptable, discontinued negotiations and began using the product anyway. According to the complaint, the repeated demands that improper and infringing activity cease were uniformly ignored.

Duer’s Take-n-Slide™ product is a “dosage adherence tool” to remind prescription users on a daily basis as to their last prior dosage intake. The product, simple and effective in its functionality, is pictured below:

Duer obtained U.S. Patent No. 7,614,358, issued on November 10, 2009, relating to the dosage adherence tool and also copyrighted the instructions included with the product (Reg. Nos. VA0001911109, VA0001431705). The complaint further alleges that the product “consists of an inherently distinctive combination of design, shape and color scheme.” Before a dose is taken for a day the color green appears to the right of the slider. After taking a dose the user moves the slider for that day and the color red appears on the left.

Discussions between Duer, on the one hand, and Lilly and BDA on the other occurred in 2010 and 2011 through Duer’s distributor, Richard Cosgrove of Anatomed, Inc. Lilly wanted Duer to license the product to BDA, as BDA was already a Lilly approved supplier. According to the complaint, when Duer informed BDA that a proposed two-year non-solicitation provision was objectionable, BDA abruptly ended discussions and later stated Lilly had decided not to move forward with the product. Two years later in 2013, Duer learned that Lilly was using the product. The complaint alleges that even the insert sheet was substantially copied and inserted with the product. Finally, BDA and Lilly are accused of using the Take-n-Slide™ trademark or confusingly similar marks.

The suit seeks an injunction, damages, enhanced damages, attorney’s fees, costs, and other “relief as the Court may deem just and equitable.”

The case, originally filed in May 2014, is Lisa Duer v. Bensussen Deutsch & Associates, Inc., and Eli Lilly and Company, No. 1:14-cv-01589-ELR, and the Third Amended Complaint was filed in the U.S. District Court for the Northern District of Georgia, Atlanta Division, on July 24, 2015. The case is assigned to U.S. District Judge Eleanor L. Ross.

Southern Mills Files Patent Suit Against Int’l Textiles over its Glide™ Product

noreply@blogger.com (Unknown) — Mon, 03 Aug 2015 14:53:00 +0000

Southern Mills, Inc. (“Southern Mills”), a Georgia corporation doing business as TenCate Protective Fabrics, filed a patent infringement action on July 15, 2015 against International Textiles Group, Inc. f/k/a Safety Components International, Inc. (“Int’l Textiles”), a Delaware corporation, relating to U.S. Patent No. 8,898,821 (the ‘821 Patent) directed to a flame resistant directionally-dependent fabric.

Southern Mills accuses an Int’l Textiles product marketed under the Glide™ trade name of infringing the ‘821 Patent. The complaint explains that the face of the Glide™ product is made of a flame resistant fabric, with the fibers of the fabric comprising, on the one hand, para-aramid[i] Kevlar® filament fibers (the “Kevlar® Fiber”), and, on the other hand, meta-aramid[ii] Nomex® fibers and flame resistant viscose/rayon FR® staple fibers spun together (40% of the total Glide™ product) (the “Blend Flame Resistant Fiber”).

The complaint alleges that warp and fill weaving techniques are used to present the Kevlar® Fiber toward the wearer and the Blend Flame Resistant Fiber away from the wearer (toward any external source of heat or flame) infringing claims of the ‘821 Patent. An image depicting the Glide™ product was included in the complaint and is reproduced below:

The complaint alleges repeated communications with Int’l Textiles before and after the ‘821 Patent issued.

In addition to direct infringement, the complaint alleges indirect infringement by inducement, alleging that Int'l Textiles touts the infringing uses and provides instructions on how to use the product in an infringing manner. Further, Southern Mills claims that Int'l Textiles contributes to direct infringement by end users and garment manufacturers, pointing specifically to marketing materials.

The complaint alleges that Int’l Textiles' actions are willful and seeks a finding of infringement, an injunction, damages, including enhanced damages under 35 U.S.C. § 284, attorney’s fees and expenses under 35 U.S.C. § 285, and prejudgment interest and costs.

The case is Southern Mills, Inc. v. International Textiles Group, Inc. (f/k/a) Safety Components International, Inc., LLC, No. 1:15-cv-02588-WSD, filed in the U.S. District Court for the Northern District of Georgia, Atlanta Division, on July 15, 2015, and assigned to U.S. District Judge William S. Duffey, Jr.

[i] Para-aramids are high density fibers in demand for tensile strength and grip.

[ii] Meta-aramids are high density fibers though with less tensile strength and grip than para-aramids.

Markman Ruling Construes “Network” Rejecting Parties' Proposals

noreply@blogger.com (Unknown) — Fri, 31 Jul 2015 14:08:00 +0000

Plaintiff Microwave Vision, SA (“Microwave Vision”), owner of U.S. Patent No. 7,443,170 (the “‘170 Patent”), brought an action for patent infringement along with MVG Industries, SAS, and MVG, Inc. (collectively “Plaintiffs”) against ESCO Technologies Inc. and ETS-Lindgren Inc. (collectively the “Defendants”).

The ‘170 Patent covers systems used “to measure various parameters relating to antennas used in wireless devices.” P. 2. The system uses the same array of probes to obtain multiple measurements by rotating the probes or the antenna to achieve different perspectives. One of Plaintiffs’ devices is depicted below:

Judge Steve C. Jones provides a thorough exposition of the relevant legal standard for construing claims at pages 3 - 6 of his 52-page Order. The nexus of the parties' claim construction dispute centers on the construction of the term “network of probes.” The parties agreed that the ‘170 Patent improved on prior art, which used a similar set of probes, by allowing pivoting of the probes and the tested antenna to garner additional data points. Greater measurement resolution is achieved by the system through obtaining more measurement points than the number of probes. Microwave Vision argues its ‘170 Patent claims protect its system of achieving this increased resolution from infringement by Defendants.

Divergent claim constructions of the key term “network of probes” were proffered by Plaintiffs and Defendants. Plaintiffs argued that the term should be construed to require probes that “can each send signals to a common receiving device,” while the Defendants argued the probes must be “communicatively interconnected.” Pp. 11-12. The Court focused on the thrust of the dispute – “what it means for a given set of ‘probes’ to be ‘networked.’” P. 12.

In its examination of the claims,[i] the Court found no mention of sending signals to a common receiving device or communicative interconnectivity. Thus the functional limitations proposed by each side was not mandated by the claim language. P. 13. The Court further found that the patentee had not acted as lexicographer to define the term in the specifications. P. 13. The Court found the arguments of each side effective against the other and thus neither proposed construction had specification support. P. 13. Similarly, the Court dissected the extrinsic evidence offered by each side in support of its proposal and found that evidence lacking.

The Court found fault with the premise of both sides that a “network” must involve communications, noting the reference to a network of trains in “Newton’s Telecom Dictionary.” P. 15, n. 4. The Court did not find dictionary references to “nodes” in communication systems to be synonymous with “probes” as used in the ‘170 Patent. Apparently, Judge Jones did not feel the compulsion that the parties felt that communications of some kind must be included as a limitation, probably based on the probes as manifested in real-life employing communication of the measurements taken. “This is not to say that Claim 12 could not include such features. But they are not required limitations.” P. 16, supported by n. 7.

The Court’s independent approach to deriving a proper construction offers a lesson to IP litigators both on how to systematically arrive at a supportable construction and on how to persuasively document that process. Judge Jones followed the process he described in his Legal Standard section first looking to the claim language (including the language of non-asserted independent claims). P. 18, n. 9. That examination of claims led Judge Jones to conclude that the “network of probes” require a particular structure.

First the probes must be in a single plane. Pp. 18-20. This requirement was further supported by repeated terminology in the specifications, which in turn was further supported by the prosecution history. P. 20. The term Judge Jones chose to describe this relationship was “coplanar.” P. 21, n. 10.

Second, the probes must “have a fixed relation to one another.” P. 21. Pointing to language that requires the pivoting of the network of probes, Judge Jones noted they must move “as a single unit, which in turn necessitates a fixed relationship.” P. 22. Dependent claim references to distribution of the probes at a given pitch along an arc further require a fixed relationship between the probes. P. 22. Similarly, multiple references to pivoting, tilting, moving, and pitch distribution in the specifications were cited for additional support. P. 23. The Court next points to the prosecution history where the patentee distinguished other prior art measuring probes for not involve pivoting, moving, or specifying an angular pitch.[ii] P. 24.

While stating that extrinsic evidence was unnecessary to support the Court’s construction, Judge Jones nevertheless delivered the coup de grȃce to the parties’ constructions, pointing out the ‘170 Patent was filed pursuant to the Patent Cooperation Treaty based on a French Application. Judge Jones then noted that the translation of the French application included the term at issue: “network of probes.” P. 26 The Court’s exegesis of the French term translated – réseau de sondes – supplied almost poetical support for his construction. Réseau means a system of lines forming small squares of standard size forming a network to facilitate measurements or detect changes (in film), and sonde means various devices of testing physical and meterological conditions (above the earth’s surface) and the Middle French word sonde referred to a nautical “sounding line.” Pp. 26-27. Thus, as Judge Jones noted, the terms from which “network of probes” derived referred to probes with a particular physical arrangement rather than signal sending or other electronic communication characteristics. P. 27. Despite the Court’s repeated disavowing of reliance upon the historical genesis of the term at issue, one can almost see the Judge’s smile upon its discovery.

Thus, the Court, relying only upon the claims, specifications, and prosecution history, found “network of probes” to mean “multiple probes having a fixed and coplanar relationship to one another.” P. 28-29.

The remaining constructions relating to the structure required for means-plus-function claims. In determining the precise structures required, Judge Jones relied primarily on the disclosures in the specifications, noting that the first step was to identify the claimed function and next to determine what structures correspond to that function and examine the specification or prosecution history for a clear link of that structure to the recited function. P. 31. The Court again took a minimalist approach. With regard to the first construction of a means-plus-function claim, the Court found the structure disclosed in the specifications that was required to perform the claimed function but refused to import additional limitations that were unnecessary for the claimed function. The required structure does not need to include limitations already in the claim, but only those necessary to perform the claimed function that appear in the specification but not the claim. While the Court decided not to adopt either side’s argument, a structure was found but without all of the limitations proposed by Plaintiffs.

However, with the final means-plus-function claim, the Court found that Plaintiffs had only disclosed one structure in the specification and thus the structure must “be limited to the single disclosed structure and equivalents.” P. 48, citing Mettler-Toledo, Inc., v. B-Tek Scales, LLC, 671F.3d 1291, 1296 (Fed. Cir. 2012).

This Order demonstrates a sophistication of claim construction analysis extending beyond the arguments of counsel, yet bound by precedent and restraint.

The case is Microwave Vision, S.A., MVG Industries, SAS, and MVG, Inc. v. ESCO Technologies, Inc., and EST-Lindgren Inc., Dkt. 59, decided July 15, 2014, in 1:14-cv-01153-SCJ, in the United States District Court for the Northern District of Georgia, Atlanta Division, assigned to Judge Steve C. Jones.

[i] Although only Claim 12 was in dispute. The Court looked at all the claims to see if their wording informed the correct finding.

[ii] Given the Court’s multiple references to a “given pitch” or “set pitch,” it is interesting to note that the Court’s ultimate construction required fixed positions but included no requirement of a symmetry of pitch in the locations.

Sugartown Takes on Old Navy in Copyright Infringement Action over Lilly Pulitzer Fashion Designs

noreply@blogger.com (Unknown) — Thu, 30 Jul 2015 14:28:00 +0000

Sugartown Worldwide, LLC (“Sugartown”), a Delaware limited liability company with its principal place of business in Pennsylvania, filed suit for copyright infringement, money damages, injunctive relief, seeking destruction of infringing materials, costs, and attorneys’ fees against Old Navy (Apparel), LLC, Old Navy, LLC (collectively “Old Navy"), and The Gap (“Gap”) (altogether the “Defendants”).

Sugartown owns the Lilly Pulitzer trademarks under which it markets and distributes Lilly Pulitzer apparel and accessories, including within the Northern District of Georgia. The district is also home to Sugartown’s parent company and many of its executives and corporate officers. The Defendants are California based companies registered in Delaware and sell products throughout the country, including in this District, through retail outlets and over the Internet.

According to the complaint, Lilly Pulitzer began designing, manufacturing, and selling bright and colorful prints on distinctive fashion apparel in the 1950’s. In 1959 Lilly Pulitzer, Inc., was founded and the rights to the brand were purchased by Sugartown in 1993, which continued the creation of distinctive designs with its own design team. There are over 100 Lilly Pulitzer retail stores in the United States operated by Sugartown or through licensing agreements. In addition, Lilly Pulitzer designs are sold over the Internet and by major department stores and individually owned stores.

The Lilly Pulitzer design team creates original artwork, often printed on canvas, which are then registered with the United States Copyright Office. This artwork is then used with color modifications on fabric which comprises Lilly Pulitzer products. The complaint establishes the credentials of the original artwork for two designs identified as the High Tide Design and the Sparks Fly Design, both of which were duly copyrighted.

Derivations of these patterns were designed in 2013 and introduced on Lilly Putitzer products in 2014. The advertising and wide distribution serves as the basis for allegations that Defendants had access to the patterns. The gravamen of Sugartown’s complaint is that these patterns were copied by Defendants and substantially similar designs were introduced by Defendants thereafter as their own products. The complaint highlights consumer comments on social media as to the close similarity of the designs and depicts in the complaint itself side-by-side comparisons, two of which are shown below:

By its complaint Sugartown seeks to stem the tide of Defendants’ alleged copying and let the sparks fly where they must (and not fly where they must not).

Sugartown Worldwide, LLC v. Old Navy (Apparel), LLC, Old Navy, LLC, and The Gap, Inc., 1:15-CV-02633-ELR, United States District Court for the Northern District of Georgia, Atlanta Division, filed July 24, 2015, before Judge Eleanor L. Ross.

Georgia Becomes the First State to Mount a Direct Challenge Against Unauthorized Publishing of Annotated Code

noreply@blogger.com (Preston Heard) — Wed, 29 Jul 2015 13:56:00 +0000

In what has already become news in the copyright community nationwide, the State of Georgia has launched a legal campaign against Public.Resource.org, Inc., a California non-profit corporation that dedicates itself to compiling, scanning, and publishing laws, codes, and rules from around the world.

Photo credit: georgiajusticeblog.com

The complaint was filed by the Code Revision Commission, on behalf of the General Assembly of Georgia and the State of Georgia, on July 21, 2015 in the Northern District of Georgia, alleging that Public.Resource.org's act of publishing and making available on the internet over 140 volumes/supplements of the Official Code of Georgia Annotated (O.C.G.A.) violated U.S. copyright law.

According to the complaint, Georgia contracts with LexisNexis to publish an annotated version of Georgia's state laws. Under the contract, LexisNexis is required to make an unannotated version of the code available to the public for free. In order to recoup its publishing costs, however, LexisNexis is responsible for drafting and making "additions to the statutory text," such as summaries of significant judicial decisions relating to various parts of the code. The complaint, which acknowledges that the laws themselves are uncopyrightable, refers to these additions as the "Copyrighted Annotations." The State of Georgia asserts that these Copyrighted Annotations are prepared as "works for hire" by LexisNexis and thus claims exclusive copyright ownership on that basis.

The State asserts that Public.Resource.org illegally copied the O.C.G.A. containing the Copyrighted Annotations and then uploaded copies to various websites, including its own sites and archive.org, even going so far as to post a notice that members of the public "can copy, modify, distribute and perform the work, even for commercial purposes, all without asking permission." (Compl. at para. 17, citing https://archive.org/details/govlawgacode392000, which indicates that O.C.G.A. Volume 39, 2000 Edition, Title 51 is subject to a “CC0 1.0 Universal” license.) The complaint goes on to allege that the defendant's actions are part of a larger plan to improperly influence the government to modify the copyright law and force government entities to "expend tax payer dollars in creating annotated state codes."

The State then criticizes the defendant's founder, Carl Malamud, claiming that:

"[I]n January of 2014, Carl Malamud, Defendant’s founder and president, testified in front of the U.S. House of Representatives, House Judiciary Committee, to advance an amendment to the U.S. Copyright Act making state and local official legal documents uncopyrightable for reasons of public policy. No such amendment has been adopted by Congress. On information and belief, Carl Malamud has engaged in an 18 year long crusade to control the accessibility of U.S. government documents by becoming the United States’ Public Printer – an individual nominated by the U.S. President and who is in control of the U.S. Government Printing Office. Carl Malamud has not been so nominated." (Compl. at para. 18.)

The complaint alleges that the defendant also distributed copies of the O.C.G.A. by thumb drive and mail to various members of the State of Georgia Legislature. The State mailed a cease-and-desist letter to the defendant in July of 2013, with which the defendant openly refused to comply. The complaint seeks redress for alleged direct and indirect copyright infringement under 17 U.S.C. Sec. 106, and prays for injunctive relief, seizure, impoundment, and destruction of all unauthorized works in the defendant's possession, as well as costs and attorneys' fees.

On its face, the State of Georgia appears to have an open-and-shut case, but it does raise the question of whether the "Copyrighted Annotations," which are heavily-relied upon by legal practitioners and the public alike, are "officially" part and parcel of the law such that they should also be deemed uncopyrightable works. The complaint acknowledges that the "succinctness and accuracy of the judicial summaries are in large part what make them valuable to attorneys and others researching the Code." This recognition by the State along with the "official" blessing highlights the crux of the controversy: if the annotations are part of the "official" law of the state, can (or should) those annotations be protected by copyright law from free public dissemination? It may well require Congressional action to preclude states from obtaining copyright protection on works made for hire pursuant to contract.

The case is Code Revision Commission et al. v. Public.Resource.Org, Inc., 1:15-cv-02594-MHC, filed July 21, 2015 in the Northern District of Georgia, Atlanta Division, and is assigned to Judge Mark Cohen.

Sarvint Retains Jurisdiction in the Northern District in Another Order from Judge Batten

noreply@blogger.com (Unknown) — Tue, 28 Jul 2015 11:08:00 +0000

Judge Batten denied a motion brought by Carré Technologies, Inc. (“Carré”) to dismiss[i] apatent infringement action brought by Sarvint Technologies, Inc. (“Sarvint”) for lack of personal jurisdiction. The Court began by incorporating discussions from its Order in the sister case of Sarvint v. OMsignal, on which we recently reported.

The accused product, referred to by Sarvint as a "Smart Shirt," is known as a Hexoskin Wearable Body Metrics Shirt. Carré is based in Montreal and made “at least seven sales of allegedly infringing products to individuals in Georgia through its Internet website.” P. 3. Carré’s total sales to companies unaffiliated with Sarvint were four, totaling approximately $1,800 in revenue. Images of the Hexoskin product from the Carré website appear below:

Carré’s motion to dismiss was filed on June 15, a little over two weeks prior to its denial. The Court did note that the arguments relating to personal jurisdiction were “verbatim” reiterations of jurisdiction arguments made in opposition to an earlier filed motion for preliminary injunction. Judge Batten rejected Sarvint’s argument that Carré had waived personal jurisdiction by participating in the adjudication of the motion for preliminary injunction or by waiting five months after the complaint was filed. Although the Court said waiver of personal jurisdiction can be waived by substantial participation in the litigation, the circumstances of this case did not dictate the finding of a waiver.

The Court distinguished the line of authority relied upon by Sarvint on two grounds: (1) the Court had not yet ruled upon the preliminary injunction motion; and (2) Carré has not sought affirmative relief from the Court in any filing prior to raising the defense of lack of personal jurisdiction.

In applying the same test for personal jurisdiction as applied in the OMsignal case, the Court stated “[t]here can be no dispute . . . Carré falls within the ambit of the ‘transacts any business’ prong of Georgia’s long-arm statute.” P. 9. The Court next turned to the three-prong Federal Circuit test, citing Inamed v. Kuzmak, 249 F.3d 1356, 1360 (Fed. Cir. 2001). Finding that once minimal contacts are established, “jurisdiction over a defendant is presumptively reasonable.” P. 11. Defendant must then present “a ‘compelling case’ as to why the exercise of jurisdiction would be unreasonable.” Id., citing Burger King Corp. v. Rudzewicz, 471 U.S. 462, 476-77 (1985). Carré made no attempt to meet that burden. P. 14.

Carré met both the requirements of transacting business in Georgia related to the cause of action (specific jurisdiction) and the minimal contacts and fair play requirements by actually selling accused devices over the website into Georgia.

The Order was issued in Sarvint Technologies, Inc. v. Carré Technologies, Inc., No. 1:15-cv-00069, in the U.S. District Court for the Northern District of Georgia, Atlanta Division, on July 2, 2015, by Judge Timothy C. Batten, Sr. [Dkt. 37].

[i] Although not discussed in the Order, the last sentence denying the motion made reference to denial of transfer as well as dismissal.

Comprehensive Ruling on Personal Jurisdiction and Transfer Issues Offers Cautions and Gems for In-house Counsel and Trial Lawyers

noreply@blogger.com (Unknown) — Mon, 20 Jul 2015 20:47:00 +0000

In a 46-page order, Judge Timothy Batten denied a motion to dismiss under FRCP 12(b)(2) and (3) for lack of personal jurisdiction and improper venue, or in the alternative to transfer venue brought by OMsignal, Inc. (“OMsignal”) filed in connection with the complaint of Sarvint Technologies, Inc. (“Sarvint”) in Case No. 1:15-cv-70-TCB in the United States District Court for the Northern District of Georgia, Atlanta Division.

Background Facts

Sarvint brought suit for infringement of U.S. Patent No. 6,970,731 (the ‘731 Patent) relating to a “smart shirt” that can unobtrusively measure a person’s vital signs without external wiring or electrode patches. This “wearable motherboard” was developed at the Georgia Institute of Technology by Sarvint’s co-founders Dr. Sundaresan Jayaraman and Sungmee Park. The ‘731 Patent was assigned by Sarvint’s cofounding inventors to Georgia Tech Research Corporation (“GTRC”) which then exclusively licensed it to Sarvint. Sarvint accuses an OMsignal fitness shirt of infringing the ‘731 Patent.

The Court noted that Sarvint is headquartered in the district as is the owner GTRC. OMsignal is based in and operated out of Montreal, Canada, with no “brick-and-mortar place of business” in Georgia. OMsignal operates a standard e-commerce website and admits to selling accused products in Georgia. OMsignal argued its contacts are minimal – no offices, places of business, employees, officers, directors, bank accounts, business records, real property, or registration in Georgia and that it has never traveled to the state.

Motion to Dismiss

Once personal jurisdiction is challenged, the plaintiff has the initial burden to "make out a prima facie case of jurisdiction." Order at 5. “[T]he court must draw all reasonable inferences arising from the proof, and resolve all factual disputes, in the plaintiff’s favor.” Id., citing Trintec Indus., Inc. v. Pedre Promotional Prods., Inc., 395 F.3d 1275, 1283 (Fed. Cir. 2005). After stating this principle, the Court next turned to application of the two-part inquiry set forth in Sculptchair, Inc. v. Century Arts, Ltd., 94 F.3d 623, 626 (11^th Cir. 1996) (noting that the issue of personal jurisdiction in a patent infringement action is governed by Federal Circuit law as explained in LSI Indus. Inc. v. Hubbell Lighting, Inc., 232 F.3d 1369, 1371 (Fed. Cir. 2000)). The two-part inquiry is:

(1) whether jurisdiction exists under Georgia’s long-arm statute; and

(2) whether exercising such jurisdiction is consistent with federal due process.

Despite holdings that the Georgia long-arm statute is co-extensive with federal due process jurisdiction, the Eleventh Circuit requires a separate analysis. Diamond Crystal Brands, Inc. v. Food Movers Int’l, Inc., 593 F.3d 1249, 1263 (11^th Cir. 2010). Although a purposeful act to transact business within the state is required, there is no requirement to be present – mail, telephone calls, and other “intangible” acts can suffice.” Diamond Crystal at 1264.

In considering Georgia’s long-arm statute the Court noted there are two kinds of personal jurisdiction -- specific and general. The Court found that general jurisdiction was not justified by OMsignal’s limited contacts and not argued by Sarvint. For specific jurisdiction, isolated and sporadic contacts related to the cause of action can suffice. See LSI Indus. Inc., 232 F.3d at 1375. The Order states that OMsignal conceded that it has transacted “any business” under the Georgia long-arm statute and that the business related to the cause of action. Order at 9.

In its separate analysis of federal due process, the Court applied the following three part test to determine if the minimal contacts of OMsignal allowed exercise of jurisdiction without offending “traditional notions of fair play and substantial justice”:[i]

(1) whether the defendant ‘purposefully directed’ its activities at residents of the forum; (2) whether the claim ‘arises out of or relates to’ the defendant’s activities with the forum; (3) whether the assertion of personal jurisdiction is “reasonable and fair.’

Inamed v. Kuzmak, 249 F.3d 1356, 1360 (Fed. Cir. 2001). The Court held “Once minimum contacts are established, jurisdiction over a defendant is presumptively reasonable, and the burden then shifts to the defendant to demonstrate a ‘compelling case’ as to why the exercise of jurisdiction would be unreasonable.” Order at 11, citing Burger King Corp. v. Rudzewiez, 471 U.S. 462, 476-77 (1985). However, “'so long as [a defendant] creates a substantial connection with the forum, even a single act can support jurisdiction.’” Id., quoting Red Wing Shoe Co. v. Hockerson-Halberstadt, Inc., 148 F.3d 1355, 1359 (Fed. Cir. 1998).

Judge Batten next examined[ii] OMsignal’s website interaction in relation to the well-reasoned sliding scale employed a frequently cited case, Zippo Manufacturing Co. v. Zippo Dot Com, Inc., 952 F. Supp. 1119, 1124 (W.D. Pa. 1997). Order at 13. This scale is a must-read for any party seeking or defending a motion to dismiss based on lack of personal jurisdiction where the key contact relates to a website. The portion of the scale which applied to OMsignal reads as follows:

"At one end of the spectrum are situations where a defendant clearly does business over the Internet. If the defendant enters into contracts with residents of a forum jurisdiction that involve the knowing and repeated transmission of computer files over the Internet, personal jurisdiction is proper." Id.

The Court went on to hold: “while OMsignal’s web presence suggests that the exercise of jurisdiction is proper, it is OMsignal’s direct sale and shipment of the product to Georgia residents, and its concomitant receipt of revenue from those transactions, that clearly establishes the key contact for purposes of the present analysis.”[iii] Order at 16. Judge Batten went on to note at page 18:

"While the Federal Circuit has not ruled directly on whether purposeful availment exists when a defendant’s only contacts with the forum state are sales made through an e-commerce website, the Court concludes that the contacts in this case are more than adequate to support the exercise of specific jurisdiction."

The Court found the decision in WhatRU Holding, LLC v. Bouncing Angels, Inc., 2014 WL 641517 at *4 (D. Minn. Feb. 19, 2014),“most instructive.” One defendant, EZ Inflatables, Inc., escaped jurisdiction based on no sales having been made by its interactive website, while one interactive sale by co-defendant Bouncing Angels conferred jurisdiction.
Determinative of the “fair warning” requirement was the fact that the accused products were themselves the products sold by the interactive website into Georgia. Order at 23. See Diamond Crystal, 593 F.3d at 1267.

In assessing the “fair and reasonable” requirement, the Court noted that, once minimum contacts have been shown, it is the defendant’s burden “to ‘present a compelling case that the presence of some other considerations would render jurisdiction unreasonable.’” Order at 24, citing Burger King Corp., 471 U.S. at 477. The Court noted that OMsignal had also moved to transfer the case and had failed to establish that the relevant factors favored transfer, a less substantial burden to meet than the “compelling case” requirement for dismissal. Order at 25.

Motion to Transfer

The Court next examined the Motion to Transfer using the factors set forth in detail in our recent post on July 14 in another Northern District of Georgia case. This post will not repeat or provide a detailed reexamination of those factors other than to point out that this case reached a different result and, understandably, selected stronger case cites opposing transfers.

The Court held that the defendant “must make ‘a strong case for transfer and if the transfer would merely shift inconvenience from one party to the other, or if the balance of all factors is but slightly in favor of the movant, plaintiff’s choice of forum should not be disturbed and transfer should be denied.’” Order at 29, quoting Bell v. K-Mart Corp., 848 F. Supp. 996, 998 (N.D. Ga. 1994) (quoting Grey v. Cont’l Mktg. Assocs., Inc., 315 F. Supp. 826, 831 (N.D. Ga. 1970)).

The Court went on to note at page 29:

Moreover, “federal courts traditionally have accorded a plaintiff’s choice of forum considerable deference.” In re Ricoh Corp., 870 F.2d [570] at 573 [(11^th Cir. 1989)]. “[U]nless the balance is strongly in favor of the defendant, the plaintiff’s choice of forum should rarely be disturbed.” Moore v. McKibbon Bros., Inc., 41 F. Supp. 2d 1350, 1356 (N.D. Ga. 1998) (quoting Gulf Oil Corp. v. Gilbert, 330 U.S. 501, 508 (1947)).

In considering the transfer factors, Judge Batten began by noting that OMsignal’s argument that Sarvint does not have ties to Georgia was “patently false.” Order at 30. In considering the second factor of the convenience of witnesses, the Court noted that OMsignal argued seven non-party witnesses were in Canada and not subject to a compulsion to testify in Georgia – “conveniently” failing to mention that five of those seven were representatives of a defendant in a parallel case brought by Sarvint in Georgia (the Court found them to be “effectively party-witnesses for purposes of this case” – at 32).

On the trial efficiency and interest of justice factor, the Court noted that there are six cases brought on the ‘731 Patent by Sarvint in the Northern District of Georgia. Judge Batten stated at page 40:

"The Federal Circuit has explained that “[t]he existence of multiple lawsuits involving the same issues is a paramount consideration in determining whether a transfer is in the interest of justice.” In re Volkswagen of Am., Inc., 566 F.3d 1349, 1351 (Fed. Cir. 2009)."

It is worth noting that the Court also commented on the pendency of a motion for a preliminary injunction by Sarvint. Foxworthy v. Custom Teeds, Inc., 879 F. Supp. 1200, 1208 (N.D. Ga. 1995), was cited for a principle worthy of an observer's notation: “[W]hile the Court recognizes that an injunction ought not issue from a court where venue is improper, where the primary concern is merely one of convenience, ‘the interests of justice surely would be disserved for forcing a plaintiff to await ruling on a motion for preliminary injunction until a more convenient court has time to receive, apprehend and consider the motion.” Order at 45. The Court referenced a stronger statement at page 1209 of Foxworthy, “In short, one significant factor that ought to be placed onto the § 1404(a) scales is the pendency of substantive motions requiring immediate attention.” Id

This relatively lengthy opinion provides both great gems and strong cautions for corporate counsel and patent litigation practitioners.

The Order was issued in Sarvint Technologies, Inc. v. OMsignal, Inc., No. 1:15-cv-00070-TCB, in the U.S. District Court for the Northern District of Georgia, Atlanta Division, on June 2, 2015, by U.S. District Judge Timothy C. Batten, Sr. [Dkt. 30].

[i] Int’l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945).

[ii] Because the Federal Circuit has not yet adopted this scale, the Court only utilized it as a factor in the Court’s consideration of the issue.

[iii] Judge Batten notes at page 20 of the Order that there were seven sales made by OMsignal into Georgia using its website.

Patent Case Transferred From Georgia, Plaintiff's Principal Place of Business, To California, Defendant's Principal Place of Business

noreply@blogger.com (Unknown) — Wed, 15 Jul 2015 15:21:00 +0000

Judge Amy Totenberg granted the motion brought by Noction, Inc. (“Noction”) to transfer the patent infringement action brought by Internap Corporation (“Internap”) to the Northern District of California.

The action was based on alleged infringement of one network routing technology patent owned by Internap and potential infringement of a second patent. Both plaintiff and defendant are Delaware corporations with offices in the Northern District of California (the location of defendant’s principal place of business). Internap’s principal place of business is in the Northern District of Georgia.

Judge Totenberg considered the nine factors set forth in Manuel v. Convergys Corp., 430 F.3d 1132, 1135 n.1 (11^th Cir. 2005), reprinted below:

(1) The convenience of the witnesses; (2) the location of relevant documents and the relative ease of access to sources of proof; (3) the convenience of the parties; (4) the locus of operative facts; (5) the availability of process to compel the attendance of unwilling witnesses; (6) the relative means of the parties; (7) a forum’s familiarity with the governing law; (8) the weight accorded a plaintiff’s choice of forum; and (9) trial efficiency and the interests of justice, based on the totality of circumstances.

Judge Totenberg went on to note two ancillary rules of application: considerable discretion is afforded the trial judge and the choice of forum should not be disturbed unless the factors clearly outweighs the plaintiff’s choice of forum.

Judge Totenberg then did an analysis of each of the nine factors, detailing the pertinence of each factor to her decision and noting variations in consideration for each factor. Her exercise is informative to other future litigants facing the prospect of bringing or defending a transfer motion.

For example, the Court noted that the convenience of witnesses is a most important factor and that the focus should be on key witnesses (party witnesses, customers, experts). In considering those witnesses, non-party witnesses are less subject to compulsion or motivation and are, therefore, more appropriately focused on by the Court. Evidence on the last location of non-party inventors and potential prior art witnesses led the Court to find this factor favored granting the motion.

With regard to the location of documents, the Court noted that the largely electronic nature of the likely documents to be relevant to the proceeding diminished the importance of this factor, but the fact that usually the alleged infringer’s documents are the most important to the case gave a slight preference to the Northern District of California.

On the convenience of the parties factor, the Court noted that the Internap office in California was not a real factor as the company employees likely to be involved in the action were located in the Georgia office. The Court ruled this factor was merely neutral[1] as would shift the inconvenience from the Defendant to the Plaintiff.

With regard to locus of operating facts, the Court noted that research and development of the accused product took place in the Northern District of California, which is also the location of headquarters for a number of users of the product – thus making it the “center of gravity.” See, e.g., In re Mayfonk, Inc., 554 F. App’x 943, 944 (Fed. Cir. 2014). The fact that nationwide infringement included Georgia does not give rise to a preference for Georgia as a forum.

When examining the plaintiff’s choice of forum factor, the Court noted that this is somewhat muted by the weight of the locus of operative facts being outside that chosen forum. This bleed-over of one factor into another was also noted in consideration of the final factor “trial efficiency and the interests of justice.” Noting that neither party had cited concerns relating to delay, administrative difficulties, or prejudice, the Court evaluated factors that could make a case less expensive and faster (evidence access, witness availability, witness costs, and jury view possibilities) and found those factors favored transfer.

The considerable discretion afforded trial judges in ruling on motions to transfer allows Courts that are so inclined to hold on to cases that could be readily transferred. Judge Totenberg showed no inclination to aggressively exercise this discretion noting that “there is no strong local interest in adjudicating this matter in the Northern District of Georgia.” While this decision could encourage other defendants residing outside of Georgia to seek transfer of cases, it is also confirmatory of the equal access to justice afforded litigants in the Northern District of Georgia.

The Order was issued in Internap Corporation v. Noction, Inc., No. 1:14-cv-03872, in the U.S. District Court for the Northern District of Georgia, Atlanta Division, on June 29, 2015, by U.S. District Judge Amy Totenberg [Dkt. 30].

[1] However, when combined with the deference to the Plaintiff’s choice of forum, this factor could be argued to favor Plaintiff Internap.

Obligation to Enforce Arbitration under FAA Policy Trumps Motion to Prevent Enforcement of “Clearly Void” Non-Competition Agreement

noreply@blogger.com (Unknown) — Wed, 03 Jun 2015 19:28:00 +0000

On May 20, 2015, Judge Dudley H. Bowen of the United States District Court for the Southern District of Georgia, entered an order denying the Motion for Preliminary and Permanent Injunction filed by one of the plaintiffs (Christopher Hermann) and granting in part the motion for dismissal and to compel arbitration filed by Defendant Unishippers Global Logistics, LLC (“Unishippers”). Mr. Hermann’s motion sought to prevent Unishippers from claiming that he was in violation of a covenant not to compete agreement signed with MSA which had originally made Unishippers a third party beneficiary (the “Non-competition Agreement”). Mr. Hermann asserted the Non-competition Agreement was invalid and unenforceable.

The case was initiated by one corporate (Morning Star Associates, Inc.) and three individual franchisees (collectively “MSA”) against their franchisor, Unishippers, following the termination of three franchise agreements. MSA alleged several claims largely based on Unishippers termination of the franchise agreements under one provision and then pursing enforcement of inconsistent, waived provisions. Both the franchise agreements and the Non-competition Agreement contained arbitration provisions.

The Court noted that it “must ‘construe arbitration clauses generously, resolving all doubts in favor or arbitration.” Becker v. Davis, 491 F.3d 1292, 1305 (11th Cir. 2007). The author notes that the 11th Circuit and the State of Georgia lead the country in enforcement of arbitration provisions and hospitality to non-resident claimants and their representatives. The Atlanta International Arbitration Society.[1]

MSA challenged enforcement of the arbitration provisions on four grounds: (1) the FAA exempts transportation workers, (2) the Non-competition Agreement was waived or invalid, (3) Unishippers has no valid agreement to arbitration, and (4) the claims are outside the scope of the Franchise Agreements’ arbitration provisions.

The FAA Exemption. The Court noted that the asserted exemption was to be “narrowly construed to apply only to ‘transportation workers; and not to employment contracts in general,” quoting Hill v. Rent-A-Center, Inc., 298 F.3d 1286, 1289 (11th Cir. 2005). Noting again that “the Eleventh Circuit has been exceptionally clear about one thing; ‘[A]ll doubts are to be resolved in favor of arbitration,’” the Court found that MSA had not proven employment status (and found as a matter of law to the contrary). Ruby-Collins, Inc. v. City of Huntsville, Ala., 748 F.2d 573, 576 (11th Cir. 1984). Similarly, the Court found no employer-employee relationship between Mr. Hermann and Unishippers based on the Non-competition Agreement between Mr. Hermann and MSA (of which Unishippers was a terminable third-party beneficiary). Reinforcing its decision, the Court found that Mr. Hermann as a freight broker was not a transportation worker as required for the exemption and the eight-factor test to meet the relation to interstate commerce requirement had not been met.[2]

The Court found that the other three arguments raised by MSA were controlled by the fact the Franchise Agreements and the Non-competition Agreement all contained a delegation provision, conferring authority on the arbitrator to resolve disputes of enforceability (including whether the agreement is void or voidable). Citing Rent-A-Center, West, Inc. v. Jackson, 561 U.S. 63, 70-71 (2010), the Court noted that the arbitration provision is severable from the remainder of the contract and, therefore, the delegation provision is unaffected by assertions the underlying contract, was void, terminated, voidable, or even that the dispute was exempted from the arbitration provision’s application.

Despite the Court’s unequivocal adherence to the legal compulsion of arbitration for all issues under the law,[3] the Court did pause to note that “the Non-Competition Agreement is clearly void under applicable Georgia law.” Query whether many arbitrators would ignore this comment when it is placed before them during the arbitration.

The case is Morning Star Associates, Inc. v. Unishippers Global Logistics, LLC, No. 1:15-cv-033-DHB, 2015 WL 2408477, entered 05/20/15 by Judge Dudley H. Bowen in the U.S. District Court for the Southern District of Georgia, Augusta Division.
--------------------------
[1] The author is a member of the Executive Board of the Atlanta International Arbitration Society.

[2] The eight factors as set forth in Lenz v. Yellow Transp., Inc., 431 F.3d 348, 351 (8^th Cir. 2005), are: (1) works in transportation industry; (2) directly responsible for transporting goods; (3) handles goods that travel interstate; (4) supervises other transportation workers; (5) is within a class for which special arbitration already existed when FAA enacted; (6) vehicle itself is vital to commercial enterprise of employer; (7) strike by specific individual would disrupt interstate commerce; and (8) there is a nexus between employee and vehicle he utilizes necessary to perform job.

[3] The Court noted in beginning its Conclusion, “the Court is obliged to adhere to the strong federal policy of the FAA encouraging the enforcement of arbitration provisions.”

PPS Asserts Exclusive Rights To Remote Deposit System For Banks

noreply@blogger.com (Unknown) — Mon, 02 Feb 2015 22:43:00 +0000

PPS Data, LLC (“PPS”), a Nevada corporation formerly known as NetDeposit, LLC, commenced a patent infringement action against two Georgia corporations, VSoft Corporation (“VSoft”) and VServe, Inc. (“VServe”) on January 9, 2015 in the Northern District of Georgia. The complaint asserts infringement of patents relating to check imaging, truncation, optimized clearing, and full settlement reporting, including United States Patent Numbers 7,181,430 (the ‘430 Patent), 7,216,106 (the ‘106 Patent), 7,440,924 (the ‘924 Patent), 7,624,071 (the ‘071 Patent), and 8,660,956 (the ‘956 Patent).

The complaint alleges that PPS is "a software provider for banks, third party processors, and commercial businesses to enable check imaging, truncation, optimized clearing and full settlement reporting, including the design and sale of remote deposit capture products and services."

The complaint asserts infringement of PPS patents by VSoft, which “designs, manufactures, and markets software, products and services to facilitate remote deposit capture, deposit processing and remote deposit solutions,” and by VServe, which “provides item and deposit solutions including the VSoft Agile systems.”

The infringement claims for the five patents are set forth in five identically worded counts in the complaint. The five patents are in the same family and share the same specification. Figure 1 from the five patents, which illustrates the process flow of the claimed invention, is depicted below.

The complaint alleges notice on defendants no later than service of the complaint and seeks increased damages for willfulness, as well as a declaration that the case is exceptional, justifying attorneys’ fees, and also seeks an injunction, damages, interest, and costs.

The case is PPS Data, LLC v. VSoft Corporation and VServe, Inc., No. 1:15-cv-00084, filed in the U.S. District Court for the Northern District of Georgia, Atlanta Division, on January 9, 2015, and assigned to Judge Amy Totenberg.

Guardian Accused Of Wrongfully Treating Humidifier Goo

noreply@blogger.com (Unknown) — Mon, 05 Jan 2015 16:12:00 +0000

K2 Concepts, Inc. (“K2”), a Georgia corporation, filed a patent infringement action on October 17, 2014 against Guardian Technologies, LLC (“Guardian”), an Ohio corporation, relating to United States Patent Number 7,422,759 (the ‘759 Patent), which is directed to a mineral-based antimicrobial product.

The complaint alleges that K2 informed Guardian on May 13, 2011 that its Aquaball anti-microbial humidifier cleaning cartridge infringed the ‘759 Patent. Pictured below on the left is Figure 1 from the ‘759 Patent, with the Aquaball product of Guardian pictured on the right.

K2 further alleges that an additional infringing product was later introduced under the name Aquastick – pictured below:

The complaint alleges that in addition to its active infringement, Guardian has induced others to infringe the ‘759 Patent and contributed to the infringement of that patent by others. K2 seeks an injunction, an accounting, damages including the trebling of damages and a declaration that the case is exceptional under 35 U.S.C. § 285 together with an award of attorneys’ fees, costs, and expenses.

The case is K2 Concepts, Inc. v. Guardian Technologies, LLC, No. 1:14-cv-03348, filed in the U.S. District Court for the Northern District of Georgia on October 17, 2014, and assigned to U.S. District Judge Thomas W. Thrash, Jr.

Eagle Parts Seeks to Fasten Custom Golf Car Supply with Injunction and Damages for Patent Infringement

noreply@blogger.com (Unknown) — Mon, 22 Dec 2014 19:50:00 +0000

Eagle Parts & Products, Inc. (“Eagle”), a Georgia corporation with its principal place of business in Augusta, Georgia, filed a patent infringement action on October 3, 2014 against Custom Golf Car Supply, Inc. (“Golf Car”), a North Carolina corporation, relating to U.S. Patent No. 7,380,860 (the ‘860 Patent) directed to a windshield fastening device, which issued on June 3, 2008.

The ‘860 Patent permits golf cart drivers to enjoy the protection of a full windshield or to fold the top half of the windshield down and enjoy the resulting wind flow as they speed from one tee to the next on the course of their choice. Figures from the ‘860 Patent illustrating how the device works are reproduced below:

Figure 3 on the left shows the attaching device for the fold down windshield. Figure 5 shows the device on the complete golf cart, with the numeral 60 referring to the windshield in both figures.

Eagle alleges that it has marked its covered products with Patent Pending until the patent published and, thereafter, marked its products with the specific patent number, thereby placing Golf Car on constructive notice of the patent. On information and belief, Eagle further alleges that Golf Car had actual notice of the ‘860 Patent from its issuance on June 3, 2008.

Eagle asserts infringement by three Acrylic Hinged models in the 6100 series and by one Flex-Fold Hinged model in the 6200 series of windshields.

Eagle seeks a permanent injunction, a finding of infringement, an accounting and damages, that Golf Car’s conduct be found willful justifying enhanced damages under 35 U.S.C. § 284, and that the Court find the case to be exceptional under 35 U.S.C. § 285 and award reasonable attorneys’ fees and expenses.

The case is Eagle Parts & Products, Inc. v. Custom Golf Car Supply, Inc., No. 1:14-cv-00189, filed in the U.S. District Court for the Southern District of Georgia, Augusta Division, on October 3, 2014, and assigned to U.S. District Judge J. Randall Hall.