September and October 2011 IP Cases Filed in US District Court of RI

There were no new intellectual property (patent, trademark and copyright) case filings in September or October 2011 at the U.S. District Court for Rhode Island. This leaves the total at 10 new IP case filings (3 patent and 7 trademark) for the year to date, which is a 33% decrease over the same period in 2010.

So far there have been no new copyright cases filed in 2011 in Rhode Island.

These numbers only include cases that have been designated in the court's database as a patent, trademark or copyright case. There are other cases pending where the complaint may include trademark or other intellectual property claims, or where intellectual property counterclaims may have been asserted. But unless the case is designated as such in the court's database, we are not counting it here

Hiatus

Sorry for the break in the action.  Sometimes life just gets in the way.  Regular posts will return within a few days.

August 2011 IP Cases Filed in US District Court of RI

There were no new intellectual property (patent, trademark and copyright) case filings in August 2011 at the U.S. District Court for Rhode Island. This leaves the total at 10 new IP case filings (3 patent and 7 trademark) for the year to date, which is a 29% decrease over the same period in 2010.

So far there have been no new copyright cases filed in 2011 in Rhode Island.

These numbers only include cases that have been designated in the court's database as a patent, trademark or copyright case. There are other cases pending where the complaint may include trademark or other intellectual property claims. But unless the case is designated as such, we are not counting it here.

Venture Dollars Find RI in Second Quarter 2011

The good news:  venture capital investments in New England hit a 10 year high in the second quarter this year, with $1.1 billion invested in 119 companies, according to the MoneyTree Report from PriceWaterhouseCoopers. 

The bad news:  only two of those companies are in Rhode Island, netting a total of $1,151,000.

So while investments in New England companies are back to where they were a decade ago before the "Internet crash," the money still is not flowing to Rhode Island.  Ten years ago, venture capital investments in Rhode Island companies totalled $19.6 million in the first quarter of 2001, and $26 million in the second quarter of 2001.

Nationally, venture capitalists invested $7.5 billion in 966 deals in the second quarter, representing a 19% increase over the first quarter, when $6.3 billion was invested in 814 deals.  The Life Sciences sector (including biotechnology and medical device companies) accounted for much of the growth, improving 37% in dollars and 12% in deals over the first quarter.  Investments in Internet companies also rose to the highest quarterly level since 2001.

Locally, the two companies to receive investments are VCharge, Inc., of Cranston, and GreenBytes, Inc., of Ashaway.  VCharge, a company that offers scalable, rapid-response energy storage for the electric grid, received $150,000 in seed funding from the State's Slater Technology Fund.  GreenBytes, a more established company, received $1,001,000 from Battery Ventures, an existing investor.  GreenBytes makes hardware and software that IT operations teams use to store and protect huge amounts of data, and to control how much energy they must use to do so.

Let's hope these investment dollars start finding their way to Rhode Island.

New Trademark Infringement Case Filed in DRI --- FM Global Seeks to Protect its FM and Diamond Certification Mark

FM Approvals, LLC v. Fullco Industries, Inc., No. 11-cv-00327-L (D.R.I. filed July 28, 2011).

A new trademark complaint was filed in the District of Rhode Island on July 28th. In its Complaint, FM Approvals LLC, a subsidiary of FM Global, claims federal and state trademark rights in a four-sided diamond containing the letters "FM." for its third party testing and product certification services.  FM's mark is a certification mark, like the Good Housekeeping Seal of Approval, and is registered with the U.S. Patent and Trademark Office.  FM Approvals tests and certifies numerous products, including roofing and building material products, classroom materials, and electrical and fire protection equipment.    According to the Complaint, FM Approvals's certification process assures customers that a product has been tested by an objective third party and conforms to rigorous standards. 

FM Approvals claims that Fullco is selling industrial products such as bushings and bearings, fasteners and screws that are of the type used in building assemblies certified by FM Approvals, and has been casting a design consisting of an "F" inside a four sided diamond onto its products. Fullco's mark also has been registered with the U.S. Patent and Trademark Office. 

FM Approvals seeks damages on counts of federal trademark infringement and federal and state law unfair competition, and seeks cancellation of Fullco's federal trademark registration for its "F" and four sided diamond mark.. The case has been assigned to Judge Lisi.

July 2011 IP Cases Filed in US District Court of Rhode Island

There was one new intellectual property (patent, trademark and copyright) case filing in July 2011 at the U.S. District Court for Rhode Island. This leaves the total at 10 new IP case filings (3 patent and 7 trademark) for the year to date, which is a 23% decrease over the same period in 2010.

The new case in July consists of a trademark infringement case. So far there have been no new copyright cases filed in 2011 in Rhode Island.

These numbers only include cases that have been designated in the court's database as a patent, trademark or copyright case. There are other cases pending where the complaint may include trademark or other intellectual property claims. But unless the case is designated as such, we are not counting it here.

Hasbro to Locate Center for Excellence in Providence

Following Hasbro's announcement in May that it would create a Center for Excellence for Hasbro Games in Rhode Island, Hasbro disclosed today that it will locate the Center in Providence.  The site will be the former Blue Cross and Blue Shield of Rhode Island building in LaSalle Square, which has been empty since Blue Cross relocated to its new headquarters in 2009.  The goal of the Center is to bring top games talent together with the Hasbro brand teams, to improve the experience for traditional board games and also for video, digital and online gaming.  The new Center will be only a couple of blocks away from the new headquarters of 38studios, so there is the potential for synergies between the two companies and the talent they attract.

Separately, Hasbro announced today that it will be relocating 59 employees in Rhode Island as a result of creating the Center.  Hasbro also stated that it recorded  $13.1 million of pretax expense for severance relocation and related costs for the three months ending June 30, 2011, and anticipates an additional $7 million in costs over the next 3 to 4 quarters.

Update to provide additional coverage:

Boston Globe
Providence Journal
Providence Business News

Angry Birds Take On Counterfeit Pigs

Rovio Mobile Oy v. Ideal Toys Direct Inc., No. 11-CIV-4773 (Complaint Filed July 11, 2011).

We often discuss with clients the importance of multiple layers of intellectual property protection.  Take, for example, a video game.  The title can be protected under trademark law, and the trademark can be registered with the U.S. Patent and Trademark Office and its counterparts throughout the word.  If there are characters that are important, the names and images can be similarly protected under trademark law, and the visual appearances of the characters are protected under copyright law.  U.S. copyright law also provides additional benefits in litigation if the copyright is registered before any infringement or unlawful copying takes place.  Original music and videos can also be protected under copyright law. 

Multiple layers of protection provide advantages and options when it comes to enforcing the trademark rights.  For example, if a character is protected under both trademark and copyright law, a copyright claim might be more successful in litigation.  To prove infringement, one just has to demonstrate that the protected work and the infringing work are "substantially similar."  No intent to copy, or customer confusion need to be shown.  If the copyright is registered before the infringement takes place, one does not even have to demonstrate damages.  The federal Copyright Act permits the court to award "statutory damages" in an amount of $750 to $30,000 per infringed work (or up to $150,000 per work if the court determines the copying is willful).  Unlike the trademark law, which permits the court to award attorneys fees to the prevailing party only in "exceptional" cases, the Copyright Act provides that a court may award attorneys fees to the "prevailing party". So it is often preferable and more efficient to pursue a copyright claim in the right circumstances.

A complaint filed earlier this week by the owners of the intellectual property rights in the "Angry Birds" video game provides a good illustration of this. Rovio Mobile Oy, the developer of the Angry Birds video game, owns a U.S. trademark registration for its ANGRY BIRDS trademark.  Rovio also owns several U.S. copyright registrations covering the pig, bird and eagle characters.  Rovio's complaint claims that Ideal Toys's "Roly-Poly Birds" stuffed toys infringe Rovio's copyrights, and constitutes passing off and unfair competition under Section 43 (a) of the Lanham Act.  In addition to injunctive relief, the complaint seeks statutory damages, destruction of the infringing products, and attorneys' fees under the Copyright Act and an award of the defendants' profits and attorneys' fees under the Lanham Act.

The Complaint appears to have Ideal Toys on the run.  Time will tell whether Ideal Toys has any valid defenses.

First Circuit: Rejection of Settlement Offer Does Not Cut off Plaintiff's Entitlement to Award of Attorneys Fees in Copyright Infringement Suit

Spooner v. EEN, Inc., No. 10-2393 (1st Cir. July 5, 2011) [link]

On Tuesday the First Circuit Court of Appeals issued a useful reminder to those negotiating settlements of lawsuits in federal court.  If a plaintiff rejects an offer of judgment pursuant to Rule 68 of the Rules of Civil Procedure, and does not achieve a better result at trial, the plaintiff cannot expect to recover any attorneys' fees incurred after the rejection.  However, if the plaintiff rejects "a garden-variety settlement offer," the plaintiff's entitlement to fees is not cut off.

In his complaint, Mr. Spooner alleged that the defendants infringed his copyright in a musical composition by using the music without authorization in television and Internet advertisements.  Apparently, the litigation was hotly contested ("What followed was the litigation equivalent of hand-to-hand combat.").  The defendants made a Rule 68 offer of judgment of $10,000, which was rejected.  The defendants later made a $20,000 settlement offer, but not under Rule 68, which was also rejected.   After trial, Mr. Spooner prevailed.  The court awarded him injunctive relief, $40,000 in statutory damages, and $98,745.80 in attorneys fees as the "prevailing party"  pursuant to Section 505 of the Copyright Act.  (which authorizes a district court "in its discretion" to "award a reasonable attorney's fee to the prevailing party" in a copyright action.).

On appeal, the defendants argued that the fee award was so excessive that the district court should not have awarded any fees at all, and that, even if an award was warranted, the court should have limited it to work performed prior to the date that the second settlement offer was rejected.

The First Circuit rejected both arguments.  With respect to the attorneys fees incurred after the rejection of the settlement offer, the First Circuit explained that there is a significant difference between the conseqences of rejecting a Rule 68 offer of judgment and the consequences of rejecting a 'garden variety" settlement offer.  Rule 68 provides a framework that allows a defendant to make a firm, non-negotiable offer of judgment, which the plaintiff can reject or accept.  If the plaintiff rejects a Rule 68 offer, and and does not improve upon the offer at trial, then the plaintiff is obligated to pay the defense costs and attorneys' fees incurred after the rejection.  But, the Court pointed out, a settlement offer made without resort to Rule 68 does not accrue the same benefits, and the rejection of a settlement offer does not work to cut off the plaintiff's entitlement of fees.

The First Circuit also found the award of attorneys fees was not excessive.

As a result, defendants proposing settlement offers in copyright cases must be careful to consider Rule 68 and to determine whether or not to make the offer of judgment pursuant to Rule 68.  If the settlement offer is made without the protection of Rule 68, then the offer does not act to cut off the plaintiff's right to request attorney's fees incurred after the rejection under the Copyright Act, even if the plaintiff does not improve his position at trial.

Will the Real DJ Paulie/DJ Pauly D, Please Stand Up, Please Stand Up?

Lis v. Delvecchio, No. 3:11-CV-01057-AWT (D. Conn. filed June 30, 2011).

Mr. Paul Lis, a Connecticut man who claims to have used the name “DJ PAULIE” since 1973 as a disc jockey, has filed a complaint for trademark infringement in federal court in Connecticut against Rhode Island resident Paul DelVecchio Jr, more popularly known as “DJ Pauly D” on the MTV Network show “Jersey Shore.” The complaint also names 495 Productions, the producer of the television show, MTV Networks, the Palms Casino Resort in Las Vegas, Room 960, a nightclub in Hartford, Baskin-Robbins and Hearst Publications, as additional defendants.
The complaint alleges claims for federal trademark infringement, federal trademark dilution, federal unfair competition, state unfair competition, and violation of the Connecticut Unfair Trade Practices Act. No specific dollar amount for damages is specified in the complaint, which also seeks injunctive relief, punitive damages and attorneys fees.

Obviously, more facts will need to be developed before the claims can be properly analyzed. But at the outset, the claims for federal trademark dilution, and for injunctive relief, may be in trouble.

Federal law allows the owner of a "famous mark" to enjoin a person from using "a mark or trade name in commerce that is likely to cause dilution by blurring or dilution by tarnishment of the famous mark.” To succeed on his federal dilution claim, then, Mr. Lis has the burden of proof to show: (1) that he owns a “famous” mark; (2) that the defendants are making use of the mark in commerce; (3) that Mr. Delvecchio adopted his mark after Mr. Lis’s mark became famous; and (4) that Mr. Delvecchio’s mark is likely to cause dilution by blurring or dilution by tarnishment of Mr. Lis’s famous mark.

Here, Mr. Lis’s complaint alleges dilution by tarnishment by claiming that the “Jersey Shore” television show follows “a group of young adults pursuing a debauched lifestyle suggestive of loose morals, violence, intoxication and liberal profanity – the exact opposite” of the good reputation Mr. Lis purportedly has spent decades building up. The problem is that Mr. Lis is likely to have trouble showing that he owns a “famous” mark. Under federal law, a mark is famous if it is widely recognized by the general consuming public of the United States as a designation of source of the goods or services of the mark’s owner. Can Mr. Lis really prove that his “DJ PAULIE” brand is “widely recognized by the general consuming public in the United States.” If not, then his dilution claim is likely to fail.

Mr. Lis also may face a problem in seeking injunctive relief, at least before a trial. The complaint alleges that Mr. Lis’s attorneys first contacted Viacom about the issue in early 2010. Most courts require a showing of “likelihood of success on the merits” and of “irreparable harm” in order to obtain preliminary injunctive relief before the trial. Leaving aside the case on the merits, it will be difficult for Mr. Lis to argue he has been “irreparably harmed” and requires relief prior to trial where he and his attorneys have waited nearly 18 months to pursue their claims in court.

Most lawsuits of this nature settle at some point, and this one probably will settle, also. If not, look for a trial in a couple of years over who is the “real DJ Paulie (Pauly) D.”

June 2011 IP Cases Filed in US District Court of Rhode Island

There were only 2 new intellectual property (patent, trademark and copyright) case filings in June 2011 at the U.S. District Court for Rhode Island. This brings the total to 9 new IP case filings (3 patent and 6 trademark) for the year to date, which is a 10% decrease over the same period in 2010.

The new cases in June include one design patent infringement case and one trademark infringement case. So far there have been no new copyright cases filed in 2011 in Rhode Island.

These numbers only include cases that have been designated in the court's database as a patent, trademark or copyright case. There are other cases pending where the complaint may include trademark or other intellectual property claims. But unless the case is designated as such, we are not counting it here.

Supreme Court Overturns California Ban on Sale of Violent Video Games to Minors

Brown v. Entertainment Merchants Association , ___ U.S. ___ (June 7, 2011) [link]

On Monday, the U.S. Supreme Court struck down a California law that prohibits the sale of violent video games to minors. The Court used a fairly straight-forward First Amendment analysis, first concluding that video games qualify for First Amendment protection, then subjecting the California law to a "strict scrutiny" analysis because it imposes a content-based restriction on speech.

The California law in question prohibits the sale or rental of "violent video games" to minors, and requires the packaging for such games to be labeled "18." The Act covers games "in which the range of options available to a player includes killing, maiming, dismembering, or sexually assaulting an image of a human being, if those acts are depicted "in a manner that "[a] reasonable person, considering the game as a whole, would find appeals to a deviant or morbid interest of minors."

In order for the content-based restriction on video games to be upheld, California needed to show that the law was justified by a compelling government interest, and the law was narrowly drawn to serve that interest. California failed to meet that standard in several ways. First, California was unable to show a direct causal link between violent video games and harm to minors. The court rejected research studies offered by California, finding they "show at best some correlation between exposure to violent entertainment and minuscule real-world effects. " Because California did not restrict other media that depict violence to children (such as Saturday morning cartoons), the Court felt the law was "wildly under inclusive." The Court also found the law over-inclusive, because not all of the children who are prohibited from purchasing violent video games have parents who disapprove of their doing so.

The Court's decision is good news for the video game industry, which no longer has to worry about states and municipalities imposing new restriction or licensing schemes for "violent' video games. The decision does not prohibit all restrictions on video games, however, just those that cannot satisfy the "strict scrutiny" test. It is conceivable that a jurisdiction will come up with restrictions that do pass muster. But this is not likely unless the restrictions cover almost all of the media portraying violence to young adults, which is something jurisdictions have not been able to do so far.

General Assembly Proposes Online Gambling for Twin River

Tuesday night, the House Finance Committee discussed the pending bill to authorize casino gambling at Twin River in Lincoln. The Providence Journal reports that the original bill has been revised to authorize online gambling at Twin River, as well as to provide some additional financial relief for Newport Grand, to permit the State Lottery to increase the license fees to the vendors that supply the video lottery terminals, and to instruct the General Assembly to determine the State's share of gambling revenues if the new table games are authorized by the voters.

Apparently, there was no vote on a revised bill, and there is no amendment available on the General Assembly's legislation website. The Journal article indicates that Committee Chairman Helio Melo may offer up the new proposal as an amendment to the $7.7 billion budget bill being debated later this week or next week.

Approval of any expansion in the existing gambling offerings at Twin River and Newport Grand would require voter approval of an amendment to the RI Constitution. Similar proposals were defeated by the voters, most recently in 1994 and 2006. Another proposal to put the question to a voter referendum passed the General Assembly in 2010, but was vetoed by Governor Carcieri.

It is not clear whether or not an online gambling offering would need to be approved by Congress as well. The Department of Justice takes the position that the federal Wire Act prohibits all forms of online gambling. At least one federal court, however, has held that the 1964 law only applies to sports gambling. The U.S. Supreme Court has not decided the issue.

The General Assembly should be wrapping up the 2011 session in the next week or two. Stay tuned for further developments.

Let the Merchandising Begin!

Minutes after the Boston Bruins won Game 7 of the Stanley Cup Finals Wednesday night, an e-mail arrived in my in-box from Modell's, offering the "official" locker room Championship T-shirts and caps.

Studies have shown that merchandising revenues for professional sports teams are greatly impacted by winning. The Bruins can expect a big jump in merchandise sales over the next year (especially given how their playoff run ended suddenly and unfortunately last year).

I have a pretty good idea what I am getting for Father's Day . . . and Christmas.

New Design Patent Infringement Case Filed in DRI --- Kitchen Gadget Wars

Blair v. Media Brands Co., Ltd. , No. 11-cv-234S (D.R.I. filed June 8, 2011).

A new patent infringement case was filed in the District of Rhode Island last week. Barry Blair and Norman Blier own two design patents for a kitchen utensil that holds vegetables and fruit for easy peeling, cutting and slicing, marketed under the PREP N' POP brand. The plaintiffs sell their product on QVC. As the picture shows, the product looks vaguely like a bicycle pump.

In their Complaint, the Plaintiffs allege that the defendants, a Canadian company called Media Brands Co., and its owners, have infringed the design patents by marketing an identical but inferior product under a PREP-XPRESS brand. The Complaint also alleges that in order to promote the PREP-XPRESS product, Media Brands sent out a mass e-mail containing links to a QVC video and a YOUTUBE video in which the plaintiffs can be seen demonstrating their own products. The complaint also asserts claims for federal trademark infringement, federal unfair competition, and Rhode Island state law claims for misappropriation and dilution. The case has been assigned to Judge Smith.

New Trademark Infringement Case Filed in DRI --- Can Thrifty Stop the Use of a Blue Shuttlebus by a Competitor?

Thrifty, Inc. v. KDSB Rentals, Inc. d/b/a Payless Car Rental, No. 11-cv-235M (D.R.I. filed June 8, 2011).

A new trademark complaint was filed in the District of Rhode Island last week. In its Complaint, Thrifty Car Rental claims federal and state trademark rights in the color light blue (Pantone No. 300) for vehicle rental services and for its rental buildings. Thrifty claims that Payless is operating a light blue courtesy shuttle bus out of its Warwick rental location. Apparently, Thrifty has been trying since October to get Payless to repaint its shuttle bus, without success. Thrifty seeks injunctive relief and damages on counts of federal trademark infringement, federal dilution and federal and state law unfair competition. The case has been assigned to Judge McConnell.

Supreme Court Affirms 'Clear and Convincing' Standard for Invalidating Patents

Microsoft Corp. v. i4i Limited Partnership, No. 10-290 (U.S. Sup. Ct. June 9, 2011). [link]


Thursday's U.S. Supreme Court opinion in the Microsoft case did not make any significant changes to patent law or patent litigation as some observers had predicted. The Supreme Court affirmed the long standing rule that the invalidity defense to a patent infringement action must be proven by "clear and convincing evidence," even if relying on new evidence that had not been presented to the Patent and Trademark Office during the prosecution of the patent in question. But the opinion contained some language that indicates it might be easier to challenge the invalidity of patents in the future.

Background

Section 282 of the federal Patent Act provides that "[a] patent shall be presumed valid" and that "[t]he burden of establishing invalidity of a patent or any claim thereof shall rest on the party asserting such invalidity." In its 1984 decision in American Hoist & Derrick Co. v. Sowa & Sons, Inc., 725 F.2d 1350 (Fed. Cir. 1984), the Federal Circuit interpreted Section 282 to require that the burden of proving invalidity is "to convince the court of invalidity by clear evidence." Since 1984, the Federal Circuit has been consistent in this interpretation.

In 2007, i4i sued Microsoft for willful patent infringement, claiming Microsoft's manufacture and sale of certain Microsoft Word products infringed i4i's patent. Microsoft asserted a counterclaim and sought a declaration that i4i's patent was invalid and unenforceable, alleging that i4i had sold software incorporating the patented inventions in the U.S. more than a year prior to filing its patent application. It was undisputed that the disputed evidence concerning the sale of the software has not been presented to the Patent and Trademark Office examiner during the prosecution of the patent application. At trial, Microsoft objected to the proposed jury instruction that the invalidity defense must be proved by 'clear and convincing evidence,' with respect to the prior art that was not examined by the PTO examiner. Microsoft proposed the following alternative jury instruction:

"Microsoft's burden of proving invalidity and unenforceability is by clear and convincing evidence. However, Microsoft's burden of proof with regard to its defense of invalidity based on prior art that the examiner did not review during the prosecution of the patent-in-suit is by preponderance of the evidence."

The District Court rejected Microsoft's proposed jury instruction. At trial, the jury found that Microsoft had willfully infringed i4i's patent, and that Microsoft failed to prove invalidity. The Court of Appeals for the Federal Circuit affirmed the ruling in 2010, relying on its longstanding interpretation of Section 282 in the American Hoist decision.

Supreme Court Decision

The Supreme Court affirmed the lower court decisions in an 8-0 ruling. (Chief Justice Roberts did not participate in the ruling, reportedly because he owns Microsoft stock).

Writing for the majority, Justice Sotomayor reviewed the history of Section 282 of the Patent Act. She found that in adopting Section 282 in 1952, Congress had codified the common-law presumption that patents are valid, and, implicitly, the heightened 'clear and convincing' standard of proof that attached to this presumption. She also found that Congress had had many opportunities to amend Section 282 and other patent laws since 1984, but apparently has never considered any proposal to lower the standard of proof for invalidity. As a result, any change to the standard of proof must be made by Congress.

Under an agreement between the parties, Microsoft must now pay i4i $300 million within 15 days.

Change for the Future?

One interesting part of Justice Sotomayor's decision addressed Microsoft's contention that the 'preponderance of the evidence' standard should apply where the evidence being presented in the trial was not presented to the PTO during the examination process. Her opinion found that there was no evidence that Congress intended to deviate from the 'clear and convincing evidence' standard in these circumstances. However, the Court's opinion noted that:

"[a] jury instruction on the effect of new evidence can, and when requested, most often should be given. When warranted, the jury may be instructed to consider that it has heard evidence that the PTO has had no opportunity to evaluate before granting the patent. When it is disputed whether the evidence presented to the jury differs from that evaluated by the PTO, the jury may be instructed to consider that question. In either case, the jury may be instructed to evaluate whether the evidence before it is materially new, and if so, to consider that fact when determining whether an invalidity defense has been proved by clear and convincing evidence."

As a result, the 'clear and convincing evidence' standard for proving the invalidity of a patent remains in place. But the Court's decision also clearly instructs lower courts to permit juries to consider new evidence, and the effect of new evidence when making their 'clear and convincing' determination. We will need to wait for a number of patent infringement cases to move their way through the lower courts to see whether or not this new evidence has any actual affect on the juries. In theory, however, it would appear that by endorsing the consideration of new evidence by juries, the Court's decision may make it easier to prove the invalidity of patents in the future.

Dunkin' Donuts Extends Naming Rights at The Dunk for Another 10 Years

Last week, the R.I Convention Center Authority announced that Dunkin' Donuts has extended its naming rights and sponsorship agreement for the arena formerly known as the Providence Civic Center for another 10 years. The total cost: about $5 million. In addition to exterior and interior signage, and inclusion in all press releases regarding the facility, DD also has the exclusive right to sell its "core products" in the building.

Sounds like a "win-win" for everyone involved!

New Patent Case Filed in DRI

A new patent case was filed in the federal District Court in Rhode Island last week. In its Complaint, Ira Green Inc. of Providence alleges that JL Darling Corp. of Tacoma, Washington, has sold products that falsely claim they are covered by patents, in violation of the federal Patent Act.

Both companies manufacture and sell weatherproof paper, and products such as books and notepads comprised of weatherproof sheets. Ira Green alleges that JL Darling is misleading the public by claiming its books and notepads are covered by a U.S. patent, when that patent does not cover the books and notepads in question.

The "false marking" provisions of the federal patent law make it illegal to put a patent number on a product that is not in fact covered by that patent "for the purpose of deceiving the public." The penalty is a fine of not more than $500. The statute also allows private individuals to bring "qui tam" suits against an alleged offender. If successful, the private plaintiff gets part of the fine and the government gets the other part.

For many years, the provision was not used very often, as it was interpreted to mean that a continuous false marking--such as the entire production run of a product--is a "single offense." So the fines were rarely worth the bother of filing a lawsuit. But in December 2009, the Federal Circuit Court of Appeals changed this interpretation and ruled that each wrongly marked item could be viewed as a separate offense under the statute. This ruling opened the floodgates for these "false marking" cases. In 2010, over 670 false marking cases were filed in the federal courts. Through the first quarter of 2011, an additional 199 cases were filed.

These false marking cases have been subject to question recently. In March, a federal court in Ohio reaffirmed a ruling declaring the provisions allowing a private individual to bring suit unconstitutional. Around the same time, the Federal Circuit held in In re BP Lubricants USA Inc. that conclusory allegations that a defendant is a sophisticated company, and "knew or should have known" that a patent had expired are insufficient, and that a complaint must "provide some objective indication to reasonably infer that the defendant was aware that the patent expired." Together, these two judicial limitations have substantially slowed down the filing of new false marking cases, as only 26 cases were filed in total in the federal courts in April and May 2011.

Whether or not the Ira Green complaint can overcome these limitations remains to be seen.

May 2011 IP Cases Filed in US District Court of Rhode Island

There were only 3 new intellectual property case (patent, trademark and copyright) filings in May 2011 at the U.S. District Court for Rhode Island. This brings the total to 7 new IP case filings (2 patent and 5 trademark) for the year to date, which is a 30% decrease over the same period in 2010. The new cases in May include one “false marking” patent case and two trademark infringement cases.

So far there have been no new copyright cases filed in 2011 in Rhode Island.

These numbers only include cases that have been designated in the court's database as a patent, trademark or copyright case. There are other cases pending where the complaint may include trademark or other intellectual property claims. But unless the case is designated as such, we are not counting it here.

Online Insurance Application Constitutes Writing for Purposes of Waiving Insurance Coverage under UETA

Barwick v. Government Employee Insurance Co., Inc., 2011 Ark. 128 (March 31, 2011) [link]

I guest-blogged about this case on Eric Goldman's Technology & Marketing Law Blog. We've had very few cases decided under the Uniform Electronic Transactions Act (UETA) over the past ten to twelve years, so it's nice to see the court recognize that UETA applies and get the analysis correct. The court affirmed that, under UETA (which has been adopted in almost every state), a writing cannot be denied effect just because it is in electronic form.

The basic facts are that a woman signed and submitted an online insurance application to GEICO, in which she specifically declined coverage for medical payments. This is permitted under Arkansas insurance law so long as the waiver is "in writing". After an accident, her husband tried to claim benefits under the policy, but also tried to argue that the insurance company should make medical payments because the on-line waiver was not "in writing." The Arkansas Supreme Court applied UETA and shot down the argument. You can read about it in more detail at Eric's blog.

Hasbro to Relocate Global Games Business to RI

Hasbro announced yesterday that it will create a Center of Excellence for Hasbro Games in Rhode Island, and will move its marketing and games development employees from East Longmeadow, Massachusetts to Rhode Island. The move is expected to add about 70 jobs to the RI economy. More importantly, by relocating these employees to Rhode Island, Hasbro will be building on the efforts of 38studios, which relocated its game development business from Massachusetts to Rhode Island earlier this year.

Two New Trademark Cases Filed in DRI

Fuelbelt, Inc. v. Penguin Brands, Inc., No. 1:11-cv-00203-S (filed May 18, 2011).

JJI International, Inc. v. The Bazar Group, Inc., No. 1:11-cv-00206-ML (filed May 19, 2011).

Two new trademark cases were filed in the U.S. District Court for the District of Rhode Island this week. This brings the number of trademark cases filed in Rhode Island so far in 2011 up to 5 cases, one more than the same period a year ago.

The Fuelbelt case involves the trade dress for "molded holsters" that hold water bottles for runners and other athletes. Penguin Brands claims trade dress in its molded holsters sold under its SWIFT 2R, SPEED 2R and SPEED 4R brands. Fuelbelt seeks a declaratory judgment that its REVENGE series hydration belts having a molded holster do not infringe Penguin's trade dress and that the Penguin trade dress is functional. What do you think?


SPEED 2R Belt and Holster:






REVENGE Belt and Holster:













The case has been assigned to Judge Smith.

The JJI International case involves competitors selling gold and silver plated necklaces, earrings and rings. JJI sells a branded line of jewelry under the SPLASHES & SPARKLES trademark, for which JJI obtained a federal registration in 2005. JJI claims that in June 2010 Bazar started using a SPARKLE trademark in connection with competing jewelry products. JJI seeks injunctive relief and damages on counts of federal trademark infringement and federal and state law unfair competition. The case has been assigned to Judge Lisi

RI to Host Major League Gaming National Championships

Did you know there is a Major League Gaming (MLG) Pro Circuit? We'll find out for certain in November, when Providence plays host to the MLG Pro Circuit National Championships on November 18-20. The world's best video game players will compete for the right to be the 2011 Pro Circuit National Champion (and cash prizes), in games like StarCraft 2, Halo: Reach, and Call of Duty: Black Ops. Competitions leading up to the National Championships are being held in Dallas, Columbus, OH, Anaheim, CA, Raleigh, NC, and Orlando. Should be fun! Not to mention a nice boost to the Providence economy just before the holidays.