Amazon Seller Hit with Sanctions in Lanham Act Appeal

A unanimous panel of the US Court of Appeals for the Seventh Circuit awarded sanctions under Federal Rule of Appeals 38 against Amazon seller Ellishbooks for its frivolous appeal from a default judgment. Quincy Bioscience, LLC v. Ellishbooks, et al., Case No. 19-1799 (7th Cir. June 5, 2020) (Wood, J.). Quincy Bioscience develops, markets and sells the dietary supplement Prevagen® for the support of cognitive function. Ellishbooks sold various products on Amazon, including dietary supplements identified as Prevagen®. However, Ellishbooks was not authorized to sell Prevagen® products. Quincy brought an action against Ellishbooks alleging violations of the Lanham Act and violations of Illinois statutory and common law, and seeking preliminary and permanent injunctive relief to prevent Ellishbooks from using the Prevagen® mark and falsely representing that it was associated with Quincy. Ellishbooks did not respond to the complaint, and the court entered default...

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Announcement: USPTO COVID-19 Prioritized Examination Program

The United States Patent and Trademark Office (USPTO) has announced a new prioritized examination program to expedite the examination of applications for marks used to identify qualifying COVID-19 medical products and services. Applications that qualify for the program will immediately be assigned to an examining attorney for review, which expedites examination by approximately two months. The USPTO will not charge additional fees for applications that qualify for the program because it considers the COVID-19 outbreak to be an “extraordinary situation” for trademark applicants. To qualify for prioritized examination, the trademark or service mark application must cover a product that is subject to the United States Food and Drug Administration (FDA) approval for use in the prevention and/or treatment of COVID-19, or a medical service (including medical research) for the prevention and/or treatment of COVID-19. The USPTO started accepting petitions to advance...

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Texas Appeals Court: Try Again, and This Time Get the Jury Instructions Right

A Texas Court of Appeals reversed a jury verdict for the plaintiff on claims of trade secret misappropriation under the Texas Uniform Trade Secrets Act (TUTSA) and fraud. The Court reversed the misappropriation verdict because the jury form commingled valid and invalid theories of liability, and reversed the fraud verdict because the jury instructions permitted a finding of liability under theories that were closely related to trade secret misappropriation and therefore preempted by TUTSA, as well as theories that were not. The Court ordered a new trial on both claims. Title Source, Inc. v. HouseCanary, Inc., Case No. 04-19-00044-CV (Tex. App. – San Antonio June 3, 2020) (Watkins, J.). Title Source (TSI) provides title insurance, property valuations and settlement services. HouseCanary is a real estate analytics company. TSI hired HouseCanary to build an iPad application for its appraisers to use. The app would be based on HouseCanary’s automated valuation...

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Advertising Falls within Commercial Activity Exception to Sovereign Immunity

The US Court of Appeals for the Second Circuit affirmed a district court’s denial of a motion to dismiss a copyright infringement suit on the ground of sovereign immunity, holding that advertising activity in the United States on behalf of a sovereign government falls within the commercial activity exception to sovereign immunity. Pablo Star Ltd. v. Welsh Gov’t, Case No. 19-1262 (2d Cir. June 8, 2020) (Lynch, J.). Pablo Star is a company registered under the laws of Ireland and the United Kingdom. The Welsh government is a political subdivision of the United Kingdom. Pablo Star sued the Welsh government, along with multiple New-York-based media companies working with the Welsh government, for copyright infringement. Pablo Star alleged infringement of its copyrights in photographs that the Welsh government used in online and printed materials advertising Welsh-themed events in New York and promoting tourism to Wales. The Welsh government moved to dismiss,...

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South Carolina Supreme Court Cannot Find “Economic Value” to Support Trade Secret

The South Carolina Supreme Court (S.C. Supreme Court) affirmed a state Court of Appeals finding that information taken by a minority LLC member did not have the requisite independent value to be considered a “trade secret” under the state’s Trade Secrets Act. Wilson v. Gandis, Case No. 27980 (S.C. June 3, 2020) (James, C.J.). In response to what the trial court classified as an “unconscionable,” “brazen,” “classic squeeze-out,” Wilson brought an action against his business partners, Gandis and Shirley, along with Carolina Custom Converting (CCC), a broker of industrial film materials. Wilson was a 45% member of CCC, while Gandis and Shirley were 45% and 10% members respectively. Starting in 2011, Gandis and Shirley made multiple efforts to remove Wilson as a member of CCC. The laundry list of “oppressive acts” cited by the trial court included Gandis and Shirley’s (1) withholding guaranteed monthly distributions to Wilson, (2) monitoring Wilson’s private...

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Munchkin Is Luv-n This Win

Reversing an award of attorney’s fees, the US Court of Appeals for the Federal Circuit found that a district court abused its discretion in making an exceptional-case determination where patent and trademark infringement claims were reasonable. Munchkin, Inc. v. Luv N-Care, LTD., Admar International, Inc., Case No. 19-1454 (Fed. Cir. June 8, 2020) (Chen, J.). Munchkin sued LNC for trademark infringement, unfair competition, trade dress infringement and patent infringement based on LNC’s no-spill drinking cups. LNC filed a petition for inter partes review (IPR) with the Patent Trial and Appeal Board (PTAB). While the IPR was pending, Munchkin voluntarily dismissed all of its non-patent claims with prejudice. The PTAB subsequently found Munchkin’s patent was unpatentable. After the PTAB’s finding, Munchkin dismissed its patent infringement claim. LNC filed a motion for attorney’s fees under 35 U.S.C. § 285 and 15 U.S.C. § 1117(a), arguing that the trademark and...

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Trademark Claim for Profit Damages Means No Jury Trial

The US Court of Appeals for the Ninth Circuit affirmed a denial of a jury trial demand in a trademark infringement lawsuit where only a claim of disgorgement of profits was at issue. JL Beverage Company, LLC v. Jim Beam Brands Co., Beam Inc., Case No. 18-16597 (9th Cir. May 27, 2020) (Wallace, J.) (Friedland, J., concurring). JL sued Jim Beam for trademark infringement. JL manufactured and sold vodka in bottles featuring stylized depictions of lips. Jim Beam also sells vodka in bottles featuring stylized depictions of lips. JL alleged that consumers would confuse its “Johnny Love Vodka” lip mark with Jim Beam’s Pucker line of flavored vodka products. After JL failed to provide a computation of actual damages during discovery, Jim Beam sought to limit the damages JL could seek at trial. The district court found that JL’s failure prevented Jim Beam from preparing a responsive case and granted Jim Beam’s motion to exclude JL’s claims for actual damages. Jim Beam...

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Fee Shifting Under § 285 Does Not Apply to Conduct Solely Arising in IPR

Considering for the first time whether fee shifting of § 285 applies to exceptional conduct arising solely from an inter partes review (IPR) proceeding, the US Court of Appeals for the Federal Circuit held that § 285 does not authorize an award of fees based on conduct at the United States Patent and Trademark Office (USPTO) during the course of an IPR proceeding. Amneal Pharma. LLC v. Almirall, LLC, Case No. 2020-1106 (Fed. Cir. June 4, 2020) (Dyk, J.). Almirall owns certain Orange Book-listed patent rights to medication used to treat acne. Its competitor, Amneal, planned to market a generic version of the acne medication. Before seeking approval to do so, Amneal filed an IPR petition challenging the validity of certain claims of Almirall’s patents. Amneal then filed an Abbreviated New Drug Application (ANDA), identifying Almirall’s patents in the Paragraph IV certification. Almirall subsequently filed a district court action against Amneal for infringement....

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Copyright Office, Not Courts, Determines Validity of Registrations Containing Inaccurate Information

With the validity of a copyright registration at issue, the US Court of Appeals for the Ninth Circuit reversed and remanded a district court’s judgment after a jury trial and award of attorney’s fees in favor of the plaintiff in a copyright infringement action, holding that the district court was required to request the Register of Copyrights to advise whether inaccurate information, if known, would have caused the Register to refuse registration of the plaintiff’s asserted copyright. Unicolors, Inc. v. H&M Hennes & Mauritz, L.P., (9th Cir. May 29, 2020) (Bea, J.). The appeal to the Ninth Circuit arose from a copyright infringement action brought by Unicolors, a company that creates designs for use on textiles and garments, against the global fast-fashion retail giant, H&M Hennes & Mauritz (H&M). After a jury found substantial similarity between a design created by Unicolors in 2011 and a design printed on a skirt and jacket sold by...

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USPTO Proposes New Rules for Post-Grant Proceedings

The United States Patent and Trademark Office (USPTO) proposed changes to the rules of practice for instituting review on all challenged claims or none in inter partes review (IPR), post-grant review (PGR) and the transitional program for covered business method patents (CBM) proceedings before the Patent Trial and Appeal Board (PTAB) in accordance with the 2018 Supreme Court decision in SAS Institute Inc. v. Iancu, IP Update, Vol. 21, No. 5 (SAS). Additionally, the USPTO proposed changes to the rules to conform to the current standard practice of providing sur-replies to principal briefs and providing that a Patent Owner response and reply may respond to a decision on institution. The USPTO further proposed a change to eliminate the presumption that a genuine issue of material fact created by the Patent Owner’s testimonial evidence filed with a preliminary response will be viewed in the light most favorable to the petitioner for purposes of deciding whether...

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