Property, intangible

a blog about ownership of intellectual property rights and its licensing

  • A Successful Termination of Copyright

    The first decision on a termination of a copyright grant under Section 203 of the Copyright Act is out of the gate. It’s a bit of a no-brainer though; in fact, the case was decided on a motion to dismiss.

    Victor Willis was one of the “Village People,” but more importantly he was one of the owners of the copyrights to the Village People works. In its declaratory judgment complaint, plaintiff Scorpio Music, S.A. claims that he had been hired, by way of an “Adaptation Agreement,” to “translate the lyrics of and/or create new lyrics for certain musical compositions which were owned and published in France by Scorpio.” These works included “Y.M.C.A.,” “I’m a Cruiser,” “Hot Cop,” “Ups and Downs,” “My Roomate,” (sic) and “The Woman.” (Why do I feel like I was just typing the names of gay porno flicks?) In January, 2011, Willis served a “Notice of Termination” on Scorpio, et al., terminating the Adaptation Agreement. In July, 2011 Scorpio filed the DJ, claiming that Willis didn’t have the right to terminate.
    Scorpio’s theory was a stretch. Willis was only a joint owner of the copyrights, along with two other authors, so Scorpio’s theory was that a majority of the authors who transferred their interest must join in the termination. Section 203 says this about who may terminate:

    (1) In the case of a grant executed by one author, termination of the grant may be effected by that author …. In the case of a grant executed by two or more authors of a joint work, termination of the grant may be effected by a majority of the authors who executed it ….

    Scorpio’s fundamental flaw? While there were joint owners of the copyright, in this case each executed separate grants of their rights, and the language of 203 contemplated that possibility:

    When referring to a grant executed by two or more authors of a joint work, section 203(a)(1) refers to a “grant” in the singular, not “grants.” Thus, under the plain meaning of the statute, if two or more joint authors join in a grant of their copyright interests, a majority of the authors is necessary to terminate the grant. If, however, a single joint author enters into a grant of his copyright interest, that author alone can terminate his grant.

    The court pointed out it wouldn’t make sense to treat multiple grants as one, because then there would be multiple dates of execution so the date for termination wouldn’t be known.
    The case isn’t over, though; the court is allowing Scorpio to amend its complaint to ask the court to determine what Willis’ share of the copyright is. And query what Willis can do with his regained ownership interest. The complaint says the termination is only for the copyright to lyrics, not to either the musical composition or the sound recordings of the songs. Willis saysthat he will be a “different kind of rightsholder,” but his aren’t the only rights needed to use the works.
    Scorpio Music S.A. v. Willis, Case No. 11cv1557 BTM(RBB), (S.D. Calif. May 7, 2012).

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  • There Aren’t Regular Work Hours Anymore

    I haven’t seen a lot of material to blog about, so I’ve resorted to writing about a fairly ho-hum case, albeit a court of appeals decision, albeit an unpublished one. Unless you have a compulsion to read all work-made-for-hire decisions, or at least those involving software development, you can probably just move on. I think what is somewhat noteworthy about this case is that it is undisputed that the plaintiff wrote the software on his own time and at home – but ultimately that wasn’t enough to avoid a conclusion that his employer owned the work. In my opinion, the workplace is getting so flexible that it isn’t going to matter anymore what time of day a work was created.
    The factual summary is from the district courtopinion – since the court of appeals decision is unpublished, it’s not very detailed.  Plaintiff Le T. Le, of Vietnamese descent, worked in the Network Division for the City of Wilmington (Delaware). He wrote a software program for the City’s Department of Licenses and Inspections (“L & I”) that would allow the department to keep track of citations electronically rather than on paper. Le testified that his immediate supervisor told him not to work on the software while at work. He therefore wrote the program on his own time at home. He thought if the program was successful he could provide it to the City and market it to other municipalities. He ultimately installed a prototype of the program on the City’s computer for testing.
    The City then decided to outsource the Network Division’s function. It informed the staff in January, 2007, but had to wait to make the change until after the City Council approved it. Le (and at least one other member of the department) believed that the change was racially motivated. Three days after the City Council’s approval on May 18, 2007, Le filed an application to register the copyright to the software in his own name, having changed the copyright notice in the files from the “City of Wilmington, Department of Information Technology” to his own name. After the employees were formally notified of their termination Le removed the software from the City’s computers, although his supervisor told him he was not allowed to remove it. Removing the software meant that the City could not issue tickets. Le was then suspended, told to reinstall the software, and threatened with prosecution if he didn’t comply. He reinstalled the software and was then fired. Le sued for copyright infringement and for discrimination-based claims.
    The City claimed that the program was a work-made-for-hire. Le responded that it was not in the scope of his duties, but even if it was, the City had ceded ownership back to him under 17 U.S.C. § 201(a) through a sequence of lettersbetween his lawyer and the City Solicitor’s office. 

    The district court held, and the appeals court affirmed, that the work was indeed a work made for hire. Although Le worked on it at home:

    There is no dispute that he developed the Work for the purpose of helping the L & I division reduce its workload and reliance on paper ticketing. Additionally, the evidence suggests that Le used sample paper tickets and other resources from Wilmington (such as feedback from the L & I division) in developing the program and its source code. As the District Court noted, Le admitted to reusing and modifying code from files he had created for other Wilmington owned programs in creating the source code for the Instant Ticketing program. Finally, Le testified that the three year gap between the completion of the source code and the copyright registration was based on the implementation of the program which involved testing by the L & I, layout changes and other modifications. For these reasons, we will affirm the District Court’s finding that the Instant Ticketing program was created within the scope of Le’s employment, for the benefit and use of his employer.

    The exchange of letters between lawyers was clearly not disclaimer of the City’s ownership in the program, but rather simply expressed that the City did not want to spend money arguing about it (according to the letters, because the software was “an amateur work product”):

    To the contrary, the letters clearly express an unwillingness to acknowledge Le’s ownership of the copyright. Additionally, Wilmington’s disinterest in spending money to contest Le’s claims does not qualify as a manifestation of its intent to transfer the copyright itself, thereby extinguishing its own rights in whole or in part.

    The City also raised estoppel and license defenses, both successful in the district court also. The court of appeals didn’t mention the estoppel defense, but agreed, in dicta, on the license defense.
    Le lost on the discrimination claims too.
    Le v. City of Wilmington, No. 08-615-LPS (Sep. 7, 2010).
    Le v. City of Wilmington, No. 11-1770(3d Cir. April 24, 2012) (unpublished).

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  • I Learned What “Dubitante” Means

    For purposes of patent standing, there are generally three categories of ownership described: patent owner, exclusive licensee, and non-exclusive licensee. The first has the right to sue, an exclusive licensee must join the assignee in any patent infringement suit, and the non-exclusive licensee has no standing at all.
    But the first category can be subdivided. It includes situations where the patent owner has not transferred legal title but nevertheless has assigned all substantial rights under the patent.  Prima Tek II, L.L.C. v. A–Roo Co., 222 F.3d 1372, 1377 (Fed. Cir. 2000). The recipient of the rights is a “virtual assignee,” “de facto owner” or “effective patentee.” When does one fit into this category instead of being an exclusive licensee?
    The difference is whether the assignor/licensor retained any rights in the patent. The purpose of the rule is to avoid multiplicity of suit. Take, for example, a situation where a patent owner grants an exclusive license to manufacture green widgets and the defendant is making turquoise widgets. The defendant might be infringing the exclusive licensee’s right, depending on how green the widgets are, or it might be infringing the original patent owner’s, if not so green. So both must participate in the suit so that the defendant does not get sued multiple times for the same infringement.
    But wait, it’s even more complicated than that. If the assignor/licensor granted all rights within a specific territory rather than a field of use, then the assignee/licensee has standing without joining the assignor/licensor. This is so because the Patent Act says one may assign patent rights for less than all of the United States:

    The applicant, patentee, or his assigns or legal representatives may in like manner grant and convey an exclusive right under his application for patent, or patents, to the whole or any specified part of the United States.

    35 U.S.C. §261. If, however, the assignor/licensor granted all rights within a field of use rather than a territory, then the assignee/licensee is not the “virtual owner” and must join the owner of the patent in the lawsuit. International Gamco, Inc. v. Multimedia Games, Inc., 504 F.3d 1273 (Fed. Cir. 2007) (interpreting a license with both a field-of-use restriction and a territorial restriction). In a dubitanteopinion, Friedman, C.J., opined that the statute didn’t actually mean to distinguish field-of-use and territorial restrictions that way, but it is the current rule.
    But one more thing – an exclusive licensee who, in general, may not sue without joining the patent owner as plaintiff, may do so if it is the patent owner who is the infringer. In other words, if the patent owner granted rights excluding even itself, and then infringes, the licensee would have a claim for patent infringement as well as breach of contract.
    And how do I know all this? Because of a very thorough opinion that explains all of this and more. Trendx Enterprises, Inc. v. All-luminum Products, Inc., No. 11-2512 (D.N.J. April 18, 2012).

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  • The Missing Inventor

    I love cases where the defendant goes back and finds another potential inventor. Stemcells, Inc. v. Neuralstem, Inc. shows some of the ways this can play out – in this case, standing, and the rarely-invoked bona fide purchaser in good faith defense.

    The patents in dispute are 7,115,418entitled “Methods of proliferating undifferentiated neural cells” and 7,361,505entitled “Multipotent neural stem cell compositions,” both of which claim priority in part to the same application filed on July 8, 1991. Accused infringer Neuralstem found a 1991 document (“1991 Memo”) with the subject line “Technique for Proliferation of Nerve Cells for Transplantation” which states the following:

    This letter is to indicate the allotment of interest to the inventors of the above invention.
    45% – Dr. Samuel Weiss, Dept. of Pathology
    45% – Mr. Brent Allan Reynolds, Dept. of Pathology
    10% – Dr. Wolfram Tetzlaff, Dept. of Anatomy
    ….
    The inventors are in agreement with this assignment which relates to 50% of any profits derived from the invention, the other 50% being assigned to the University of Calgary … per the current policy related to Intellectual Property.

    The last individual, Tetzlaff, is not listed as an inventor on either patent. On February 14, 2011, two weeks before the various motions were filed, Tetzlaff granted Neuralstem a “fully paid-up, retroactive, non-royalty-bearing, nonexclusive, worldwide, nonterminable and irrevocable license to the invention embodied in U.S. Patent Application Serial No. 07/726,812 [the original 1991 application to which both patents-in-suit claim priority], as well as all patent applications claiming priority to U.S. Patent Application Serial No. 07/726,812 ….” There isn’t a dispute, at least at this stage, that the memo describes the patents-in-suit.
    One more nuance – StemCells was not the owner of the patents but rather an exclusive licensee. The patents are owned by a company called Neurospheres Holdings, Ltd., of which Weiss and Reynolds are 49% owners.

    Neuralstem mounted an attack (both a motion to dismiss and a motion for summary judgment) based on the 1991 Memo, i.e., StemCells was not an exclusive licensee because of Tetzleff’s ownership interest, and therefore didn’t have standing.* StemCells retorted that the bona fide purchaser defense insulated it from the claim. Both parties filed motions to supplement the record with additional evidence: Neuralstem has evidence that StemCells was on notice of Tetzleff’s interest in the patent and StemCells has evidence that Tetzleff implicitly represented in a 1994 agreement with Neurospheres that he had no ownership interest in the patents, because he did not list them on a schedule.

    Starting with standing, what interest does Dr. Tetzlaff have in the patent? In Neuralstem’s opinion the memo says that Dr. Tetzlaff is an inventor; in StemCells’ opinion the memo says only that Dr. Tetzlaff is entitled to a part of the profits from the patents. The court says the memo is ambiguous and could mean either. Extrinsic evidence, namely the IP policy that the 1991 Memo references, the testimony of co-inventors Weiss and Reynolds, and the absence of testimony from Tetzlaff, fails to clear up the ambiguity and neither party is granted its motion for summary judgment on standing.
    Nevertheless, even assuming Tetzlaff has an ownership interest, StemCells maintains that it is a bona fide purchaser in good faith and Tetzlaff’s potential ownership interest is therefore void. Section 261 of the Patent Act states that “An assignment, grant, or conveyance shall be void as against any subsequent purchaser or mortgagee for a valuable consideration, without notice, unless it is recorded in the Patent and Trademark Office within three months from its date or prior to the date of such subsequent purchase or mortgage.” There is one major flaw with this argument – the bona fide purchaser in good faith provision is a shield, not a sword:

    In this case, StemCells attempts to make impermissible offensive use of § 261. StemCells is the plaintiff and has sued Neuralstem for, inter alia, patent infringement. As plaintiff, StemCells bears the burden of proving standing. Therefore, in asserting the bona fide purchaser defense to Neuralstem’s standing challenge, StemCells effectively endeavors to use the bona fide purchaser defense to establish an essential element of its case. It well-established [sic], however, that the bona fide purchaser defense is only “a shield by which the purchaser of a legal title may protect himself against the holder of an equity, not a sword by which the owner of an equity may overcome the holder of both the legal title and an equity.” … StemCells has identified no authority proposing that a plaintiff may use § 261 to establish its constitutional capacity to sue ….

    Further, if § 261 could be applied as StemCells claimed, summary judgment would still be denied because there is a question of fact about whether the 1991 Memo means that Tetzlaff is a co-inventor, in which case § 261 wouldn’t apply, or instead an assignment, the type of transaction to which § 261 applies.
    Given that the court doesn’t know whether StemCells has standing, it declined to rule on an also-pending motion for a reconsideration of a claim construction and instead orderedthe parties to propose a joint scheduling order for additional discovery on standing. 

    StemCells, Inc. v. Neuralstem, Inc., Civ. Nos. 8:06–cv–01877–AW, 8:08–cv–02664–AW, 8:08–cv–01173–AW, 2012 WL 1184545 (D. Md. Apr. 5, 2012). The decision is not currently available on PACER – in the court’s April 6 order the court sealed it and gave the parties 14 days to oppose lifting the seal. But it’s on Westlaw. 

    *Neurostem took a license from Tetzlaff for the patents, but that wasn’t needed for the instant motions because the challenge is the absence of exclusivity of ownership. The role of an assignment/license is a defense against subsequent suits, to prevent the plaintiff from recapturing the rights from the heretofore missing inventor and suing again, or, in this case, at least to get a license to them for a license defense.

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  • No Infringement for Claim Conditioned on Rescission

    Lufkin Industries sued Ken Nolen, Sim Gibbs and other former employees in Texas state court for trade secret misappropriation. Nolen and Gibbs counterclaimed alleging they were fraudulently induced to assign some patents to Lufkin and sought a declaration that they are the rightful owners of the patents. The counterclaim was severed and removed to federal court by Lufkin, alleging that there was federal jurisdiction because of the patent-related claims. Nolen and Gibbs amended the complaint to include counts for patent infringement, prefaced this way:

    119. Nolen seeks a rescission and/or cancellation of the assignment of the ‘ 890 patent to Lufkin. Thereupon such relief being granted, Nolen will again be the sole and exclusive owner of the ‘890 Patent and entitled to plead, prove and recover upon the following causes of action.

    The federal district court dismissed the patent infringement claims on the basis that Nolen and Gibbs didn’t have standing because their ownership of the patents required judicial intervention. The federal court also decided some other federal claims and some state law claims, declined to exercise supplemental jurisdiction over the remaining state law claims, and enjoined the plaintiffs from litigating the remaining claims in state court. (The decision doesn’t provide any insight into why the plaintiffs were enjoined; perhaps the reason relates to the state law claims in the original Lufkin complaint.) The parties appealed to the Court of Appeals for the Federal Circuit.
    But the Federal Circuit doesn’t have jurisdiction. The Federal Circuit has jurisdiction over “an appeal from a final decision of a district court of the United States … if the jurisdiction of that court was based, in whole or in part, on 28 U.S.C. § 1338 ….” 28 U.SC. § 1295 (2010). Section 1338 provides jurisdiction “only to those cases in which a well-pleaded complaint establishes either [1] that federal patent law creates the cause of action or [2] that the plaintiffs right to relief necessarily depends on resolution of a substantial question of federal patent law, in that patent law is a necessary element of one of the well-pleaded claims.” But a claim for patent infringement does not arise under the patent laws when it requires judicial action to vest title in the party alleging infringement. Therefore the plaintiffs’ conditioning of their patent infringement claims on first having to obtain a rescission of the contract assigning the patents to Lufkin means that there is no live patent infringement claim and thus no Federal Circuit jurisdiction.  The Federal Circuit transferred the case to the Fifth Circuit.
    Nolen v. Lufkin Indus., Inc., Nos. 2011–1251, 2011–1265, 2011–1278, 2011–1279, 2011–1499, 2011–1500, 2011–1522, 2011–1523 (Fed. Cir. Feb. 1, 2012) (nonprecedential).

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  • I Don’t See This Going Very Far

    Ray Charles was either an employee and wrote and performed music in the scope of his employment, or exercised his termination right to his songs in 1980 in settlement of a suit against his publisher, or alternatively the settlement was an assignment of the songs. Shortly before his death in 2004, he granted his 12 children irrevocable trusts of $500,000 each on the condition that they relinquish and waive any further claim to his estate, which they all did. Seven of the children now are trying to terminate the copyrights in Ray Charles’ works. The Ray Charles Foundation filed a declaratory judgment action against the seven children on the basis that there is no termination available to them, either because works-made-for-hire can’t be terminated or Ray Charles already had his one bite at the apple, or the termination rights for songs assigned in 1980 aren’t ripe yet. It’s the kind of claim that you hope can go away quickly (like on a motion to dismiss), but copyright termination is so convoluted I wouldn’t be surprised if it doesn’t. I’m rooting for the Ray Charles Foundation, though.
    Complaint below.

    Ray Charles Found v Robinson

    Ray Charles Foundation v. Robinson, No. CV12-02725 ABC (FFNx) (C.D. Cal.) filed March 29, 2012.

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  • Be Careful What You Wish For

    In the past I reported on a dispute between Pinnacle Pizza, franchisee, and Little Caesar Enterprises (LCE), franchisor of Little Caesars pizza shops. Pinnacle Pizza invented the tagline “Hot ‘N Ready” for a particular promotional program, which was then adopted by the franchise chain. Pinnacle Pizza sued LCE, claiming that it, not LCE, owned the tagline. The court of appeals ultimately affirmed the trial court on LCE’s ownership and also held that Pinnacle Pizza breached the franchise agreement by challenging the validity of LCE’s trademark rights in “Hot ‘N Ready.”

    Fast forward to the renewal time for the franchise agreement. LCE refused to renew the franchise agreement with Pinnacle Pizza (now Sioux Falls Pizza Company, Inc.). If you guessed that LCE was none too pleased with Pinnacle Pizza’s previous lawsuit, so displeased that it refused to renew, you’d be right. The decision involves whether LCE had the latitude to refuse to renew, made a bit more complicated by a change to the franchise agreement as the result of a class action suit against LCE that Pinnacle Pizza didn’t bring but also didn’t opt out of. The trial court held that LCE has the right to terminate the franchise agreement because of the prior breach and Sioux Falls Pizza has 35 days from the date of the order to terminate its operations.
    Sioux Falls Pizza Co., Inc. v. Little Caesar Enterprises, Inc., No. CIV 11–4047–RAL(D.S.D. March 14, 2012).

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  • Who Owns a Domain Name?

    If you say the person listed as the “registrant” in the domain name record owns the domain name, the court in Fraserside IP L.L.C. v. Kovalchukmight disagree with you. The question before the court was personal jurisdiction over Igor Kovalchuk, the person listed as the registrant of the website www-dot-DrTuber-dot-com (web site definitely not safe for work). Kovalchuk is a citizen and resident of Russia and has never visited or conducted business in Iowa, the state where the lawsuit was brought. He says that the website is owned by ERA Technologies, Ltd. and he just manages the technology for ERA. For purposes of personal jurisdiction, the court agreed that the plaintiff had not met its burden of proving Kovalchuk’s ownership:

    Because domain names may be sold, leased, or licensed, it does not necessarily follow that being the registrant of a domain name equates with operational control over the website using that domain name. Here, Kovalchuk specifically disputes his ownership and operation of www.DrTuber.com and has explained that ERA is the website’s actual owner while he merely manages ERA’s technology. Fraserside has not countered Kovalchuk’s sworn affidavit with affidavits or other evidence. Thus, after looking at the facts in the light most favorable to Fraserside, and resolving all factual conflicts in favor of it, Fraserside has not established that Kovalchuk owns and operates www.DrTuber.com. Thus, ownership and operation of the website www.DrTuber.com cannot constitute a basis for personal jurisdiction over Kovalchuk.

    The court did not have general or specific jurisdiction over Kovalchuk and the motion to dismiss was granted.
    Fraserside IP L.L.C. v. Kovalchuk, No. C11-3040-MWB(N.D. Iowa March 5, 2012).

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  • The Danger of Overreaching

    drawing and specimen for plaintiff’s trade dress registration
    Plaintiff Lauren Brenner started Pure Power Boot Camp, a military-style exercise facility. She hired the defendants and they decided to start a competing business called Warrior Fitness Boot Camp. The defendants behaved despicably; while still her employees they had one’s client/girlfriend promote Warrior Fitness to Pure Power customers (the “dating a client” part also against company rules), they stole documents from Brenner’s private office and personal computer, including business plans and customer lists, they stole and destroyed their own employment agreements with Pure Power, they disparaged Brenner to Pure Power clients, and, the coup de grâce, one of them successfully lobbied for the firing of a co-worker, then provoked a fight with Brenner leading to his own firing, leaving her in the lurch with only one trainer for two facilities and freeing him to go work at Warrior Fitness.*
    With all that, though, Pure Power was less successful in its kitchen sink of claims than one might think. The two defendants who were former employees had employment agreements (well, one denied signing it, but since they were destroyed I guess we’ll never know). The Employment Agreement was broadly written, which ultimately meant that it failed to serve the plaintiffs’ needs because most of its restrictions were found unenforceable. This included the non-compete provision (10 years and no geographic limitation was unreasonable in scope), the non-solicitation provision (same), and the “best efforts” provision (no objective criteria for “best efforts”). There was a breach of the non-disclosure provision, but for zero damages because there was no proof that Warrior Fitness’s success was based on gaining the confidential information.
    The agreement’s “intellectual property” provision also failed because it overreached. This provision stated that, as an employee of Pure Power:

    You acknowledge that [Pure Power’s] obstacle-confidence courses and related environments, and the marketing thereof, embody and/or reflect inventions, discoveries, concepts, ideas, developments, improvements, methods, processes, know-how, trade secrets, designs, trademarks, … trade dress, textual and graphic material, and a distinctive overall look and feel (collectively, “Intellectual Property”). You agree that all such Intellectual Property, regardless of whether or not it is capable of patent, trademark, trade dress, trade secret or copyright protection, is exclusively owned by [Pure Power]. You shall not, during the course of your employment or any time thereafter, challenge [Pure Power’s] ownership of any Intellectual Property or the validity or enforceability thereof, nor shall you use any Intellectual Property in any competing business, or in any other way without [Pure Power’s] express written permission, during or after your employment with [Pure Power].


    The problem is that under New York law, the terms of an agreement have to be “definite and explicit” but this provision was “impermissible vague, indefinite, and overbroad.” There were no durational limits, which meant that even if Pure Power went out of business the employees would be excluded from using the “Intellectual Property.” Further, the employees were not just prohibited from challenging the validity or enforceability of any intellectual property, but “cannot use any Intellectual Property … in any other way”: “It is impossible for the Court to uphold this provision without imposing its own conception of what exactly is meant by the vague and indefinite phrase: ‘in any other way.’”

    But I think this is the most significant point:

    Moreover, it is not simply the case that, in signing the Employment Agreement, Defendants agreed not to challenge the validity of an existing trademark or patent. Here, the provision applies to Pure Power’s alleged “Intellectual Property,” even if the alleged intellectual property is not “capable of patent, trademark, trade dress, trade secret, or copyright protection,” or even of definitions. This intellectual property provision, however, is vague and indefinite and cannot be said to promote predictable contractual relationships. Permanently barring an employee from challenging an employer’s alleged intellectual property—however vaguely defined—runs contrary to the important interest in permitting full and free competition in the use of ideas which are in reality a part of public domain. Plaintiffs have failed to explain what legitimate business interest they are seeking to protect or promote, through contract, beyond that already covered by state and federal intellectual property law, or why they are entitled to an additional layer of protection substantially restricting Defendants’ freedom to use and incorporate ideas and concepts relating to the United States military—ideas and concepts to which Brenner, of course has no special claim.

    Thus, the agreement was written broadly to try to capture something greater than what we would traditionally consider “intellectual property,” but what that might encompass was too vague to be enforceable. That’s not to say that an employment agreement can’t prohibit behavior that might otherwise be perfectly permitted under the law, but it must do so in a way that is definite and is based on a legitimate business interest.
    Although the employment contract was no help, the plaintiff was successful on a breach of the duty of loyalty under New York state law’s “faithless servant” doctrine. This resulted in a disgorgement of the former employees’ earnings while employed at Pure Power, starting at the time they first stole documents. There were also punitive damages for the willful conduct, for a total of about $250,000.

    There was also a claim for infringement of the registered trade dress (plaintiffs’ facility pictured at top and defendants’ facility immediately above), which you can see had to go nowhere. Although the décor was considered inherently distinctive and nonfunctional, the plaintiff was actually trying to protect her ideas, concepts, and innovations with her infringement claim. But distilled down to just the “look and feel,” the defendants’ facility looked different and there was no likelihood of confusion.

    Pure Power Boot Camp, Inc. v. Warrior Fitness Boot Camp, LLC, No. 08 Civ 4810 (THK) (S.D.N.Y. Sep. 12, 2011).

    *IIRC, in New York if one is fired any non-compete becomes unenforceable.  Hmmmm.

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  • Treating Patents More Like Property

    The Patently-O blog has a thoughtful post on patent ownership and licensing, advocating for a stricter recording requirement:

    Because of an inadequate system for recordation, prospective purchasers, licensees, lenders, and even defendants in a lawsuit may have to take it on faith that the seller, licensor, borrower, or plaintiff truly owns, and has not previously encumbered, these patent rights.

    But more than just identifying the problem, the author also has some practical suggestions for a legislative fix.

    Patently-O: It’s Time for a Reliable System to Determine Who Owns a U.S. Patent

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