Arkansas Business Litigation Lawyer & Attorney : Allen Law Firm : Serving Little Rock, Fort Smith, North Little Rock

The Western District of Arkansas dismissed a trademark case for lack of jurisdiction in Flexible Staffing Services, Inc. v. Integro Employment Services, Inc., 2008 WL 1928827 (W.D. Ark. 4/29/08) (previously posted 1/23/08). Integro filed an Arkansas state trademark case against one of FSS's affiliates in Northwest Arkansas. The district court held the federal action was really a response to the state action raising a federal defense. The court held it had no jurisdiction over the dispute and dismissed the federal action.

• Print
• Comments
• Trackbacks

The Arkansas Court of Appeals affirmed a preliminary injunction in Freeman v. Brown Hiller, Inc., No. 07-717 (4/2/08).

 

Freeman was an insurance agent for BHC. She signed a limited noncompete agreement that prohibited her from soliciting BHC customers for a period of 2 years after her employment ended. The contract also had a provision prohibiting disclosure of trade secrets. The agreement did not contain a geographic limitation. Freeman resigned and immediately went to work for a competitor. Before resigning she accessed, copied and deleted 300 of BHC's computer files.

 

The trial court granted the preliminary injunction for breach of the noncompete agreement but not for trade secret misappropriation. On appeal, Freeman argued the agreement was really an unenforceable covenant not to compete masquerading as a nondisclosure agreement. The court of appeals rejected this argument and affirmed the preliminary injunction.

 

Although Freeman copied an deleted 300 computer files, BHC did not bring a claim for Computer Trespass or Computer Fraud, which is the focus of this recent Arkansas Lawyer article-- Beyond Trade Secrets: Protecting Business Information in Arkansas.

• Print
• Comments
• Trackbacks

Candy Bouquet has filed a trademark infringement action against one of its former franchisees. Candy Bouquet International, Inc. v. McClendon, No. 08-340 (E.D. Ark., filed 4/ 17/08). According to the complaint, McClendon owned three Candy Boutique franchises. After violating the terms of her franchise agreements, Candy Bouquet terminated the agreements. The complaint alleges McClendon is still using Candy Bouquet's trademarks and trade secrets, although the complaint has no count for trade secret misappropriation.

• Print
• Comments
• Trackbacks

LaserAim has filed a declaratory judgment action in LaserAim Tools, Inc. v. SDA Manufacturing, LLC, No. 08-329 (E.D. Ark., filed 4/9/08). The complaint alleges that LaserAim had developed products that SDA should have disclosed in its application. The lawsuit seeks a declaration that SDA's patent is invalid.

• Print
• Comments
• Trackbacks

Vestcom has filed a declaratory judgment of no patent infringement in Vestcom International, Inc. v. Information Planning and Management Service, Inc., No. 08-276 (E.D. Ark., filed 4/2/08). Vestcom provides shelf strips to Sears. According to the complaint, IPMS told Sears it holds a patent on the strips. Vestcom alleges that IPMS's patent is invalid and that its strips do not infringe the patent.

• Print
• Comments
• Trackbacks

The Eastern District of Missouri granted a temporary restraining order based on trademark infringement in Sensient Technologies Corp. v. SensoryFlavors, Inc., 2008 WL 762092 (E.D. Mo. 3/21/08).

 

Sensient Technologies is the corporate umbrella that used to be Universal Foods Corporation. One of Sensient's companies is Sensient Flavors. SensoryFlavors is a competitor that was formed by Charles Nicolais, the former head of Sensient Colors, Inc., which is another of Sensient's subsidiaries.  Defendants argued they came up with the name SensoryFlavors without copying Sensient Flavors.

 

The court easily granted the TRO and only required a $25,000 bond. This case is a good reminder that trademark infringement turns on likelihood of confusion; it does not matter how the infringing mark was created.

• Print
• Comments (1)
• Trackbacks

The district court of South Dakota denied a preliminary injunction in Universal Underwriters Ins. Co. v. Schmidt, 2008 WL 631197 (D.S.D. 3/6/08).

 

Schmidt was an employee of Universal selling property, casualty and life insurance products to automobile dealers. He signed a noncompete agreement that prohibited him from selling these products for 2 years after his employment. During his employment with Universal, Schmidt began selling finance products to automobile dealers. He quit his job with Universal and opened his own business selling these other finance products.

 

The court construed the noncompete agreement narrowly, finding that Schmidt's actions were not prohibited by the contract. The court indicated Universal might incur some harm because of Schmidt's business but concluded any such harm would not be irreparable. After 3 months of discovery and briefing, the court denied the preliminary injunction.

• Print
• Comments
• Trackbacks

The Western District of Missouri dismissed a declaratory action claiming no trademark infringement in Sustainable Community Development, LLC v. EMRO USA, Inc., 2008 WL 495603 (W.D. Mo. 2/20/08).

 

The parties have an interesting history. SCD filed suit in 2005, which the parties eventually settled. In August 2007, EMRO sent a cease and desist letter alleging trademark violations. Instead of responding, SCD filed this action in Missouri. One day after receiving service, EMRO filed suit in Texas and moved to dismiss this case. The court held that this lawsuit was a preemptive strike suit for declaratory relief. See Northwest Airlines, Inc. v. American Airlines, Inc., 989 F.2d 1002 (8th Cir. 1993). The court dismissed this case, and the parties' dispute will proceed in the Texas lawsuit.  

• Print
• Comments
• Trackbacks

A pro se plaintiff obtained judgment for copyright infringement and anticircumvention violations in Gregerson v. Vilana Financial, Inc., 2008 WL 451060 (D. Minn. 2/15/08) (previously posted here 9/12/07 and here 1/31/07).

 

Vilana copied two of Gregerson's photographs, and the court had previously granted him summary judgment as to copyright infringement liability. After a bench trial, the court awarded him damages of  $9,462 on the copyright infringement claims. The more important issue was anticircumvention. Vilana removed a digital watermark from one of the photographs. The court held this was an anticircumvention violation, see 17 U.S.C. § 1202(b)(1), and awarded Gregerson statutory damages of $10,000. In reaching this conclusion, the court based its analysis on IG Group, Ltd. v. Wiesner Publishing, LLC, 409 F.Supp.2d 587 (D.N.J. 2006).

• Print
• Comments
• Trackbacks

eBay filed a patent infringement lawsuit in the Western District of Arkansas. eBay, Inc. v. IDT Corp., No. 08-4015 (filed 2/20/08). According to the Complaint, eBay holds the patent for a long distance telephone communication system. The Complaint alleges IDT is infringing this patent, particularly through its PennyTalk calling cards.

• Print
• Comments
• Trackbacks

The Southern District of Iowa entered judgment after jury trial in a trade secret misappropriation case. C Plus Northwest, Inc. v. DeGroot, 2008 WL 391271 (S.D. Iowa 2/14/08).

 

The facts of the case are not particularly exceptional. Mr. Sjogren owned C Plus; defendants were key employees. Defendants than formed a new company, diverted C Plus customers to their new company, and left C Plus with substantial liabilities. The jury awarded Sjogren and C Plus total damages of $1.295 million to C Plus and Sjogren. The court remitted the award to $752,000 to C Plus and denied individual damages to Sjogren. 

 

The exceptional aspect of this case was the court's  praise of the attorneys' professionalism: "The parties were represented well at trial, and the hard work and professionalism exhibited by counsel for both sides was apparent to the Court, as well as to the jurors." Id. at * 1.

 

 

• Print
• Comments
• Trackbacks

The Eastern District of Arkansas denied cross motions for summary judgment in Otto Dental Supply, Inc. v. Kerr Corp., 2008 WL 410630 (E.D. Ark. 2/13/08).

 

For 25 years, Otto Dental was an authorized dealer of Kerr, using Kerr's trademarks to market and sell its goods. In 2004, Kerr imposed a purchasing requirement on its dealers. When Otto could not meet the requirement, Kerr terminated the relationship. Otto argues the parties formed a franchise under the Arkansas Franchise Practices Act, and Kerr violated the act. See A.C.A. § 4-72-201, et seq. Kerr argues the parties did not create a franchise.

 

Both parties moved for summary judgment, but the court determined that the jury must decide whether the parties created a franchise.

• Print
• Comments
• Trackbacks

The long-standing trade secret dispute between R.K. Enterprises and Pro-Comp Management (previously posted 1/10/07) has finally come to an end on the third appeal. True to form, it took two published opinions to end the case. See Pro-Comp Management, Inc. v. R.K. Enterprises, LLC, No. 07-648 (1/24/08) and R.K. Enterprises, LLC v. Pro-Comp Management, Inc., No. 07-741 (1/24/08).

 

Recap of the first two appeals

In 2004, the trial court let R.K. Enterprises choose if it wanted judgment on the conversion claim or trade secrets claim. They chose conversion, and the court awarded damages of $262,303. The supreme court reversed and said the Arkansas Trade Secrets Act (ATSA) is the exclusive remedy. On remand, the trial court ruled the damages were too speculative for the ATSA. The supreme court again reversed and said the trial court may consider the general law of unjust enrichment in awarding damages under the ATSA.

 

Trial court proceedings the third time around

With the case back for a third determination of damages, the trial court awarded damages of . . . wait for it . . . $262, 303. The trial court did not grant attorney's fees or prejudgment interest. Both parties appealed again.

 

And on appeal a final time

The supreme court affirmed the judgment in all respects. The amount of unjust enrichment was not definite so as to qualify for prejudgment interest, and R.K. Enterprises had already failed to obtain a ruling on its motion for attorney's fees prior to the second appeal. After 4 years of postjudgment litigation and 4 published opinions, the parties find themselves right where they started in 2004.

• Print
• Comments
• Trackbacks

Late last year, the Eighth Circuit ruled that use of professional sports statistics in fantasy games is protected by the First Amendment. See C.B.C. Distribution and Marketing, Inc. v. Major League Baseball Advanced Media, L.P., 505 F.3d 818 (8th Cir. 2007) (previously posted 10/16/07). The ramifications from this opinion are now taking effect. The Sports Law Blog reports that ESPN is now seeking a major reduction in digital rights fees that it pays to MLB Advanced Media. As the deal currently stands, ESPN believes it is paying licensing fees for use of the statistics in fantasy games.

• Print
• Comments
• Trackbacks

A declaratory action alleging no trademark infringement was filed yesterday in the Western District of Arkansas. Flexible Staffing Services, Inc. v. Integro Employment Services, Inc., No. 08-5018 (W.D. Ark., filed 1/22/08).

 

Flexible Staffing Services (FSS) is a nationwide firm providing temporary staffing services. FSS operates in 10 states by setting up local affiliates that use variations of the FSS name. Integro offers a competing service in northwest Arkansas. Integro claimed trademark rights to "flexible staffing" and filed a state trademark infringement action against the FSS affiliate in northwest Arkansas (but did not sue FSS).

 

FSS filed this action to declare that the terms "flexible" and "staffing" are generic for the temporary staffing services industry. Because it is not a party to the state lawsuit, FSS claims the federal lawsuit is necessary to fully defend its rights.  

• Print
• Comments
• Trackbacks

The Eastern District of Arkansas dismissed a copyright infringement case based on sovereign immunity in InfoMath, Inc. v. University of Arkansas, 2007 WL 4562878 (E.D. Ark. 12/21/07).

 

In 2000, InfoMath contracted with the University of Arkansas at Little Rock to provide an internet based pre-calculus course. UALR dissolved the contract in 2001 but continued to use the course materials; InfoMath claims it owns the copyright in the course materials. The Arkansas Claims Commission ("ACC") awarded InfoMath $15,000 for the balance of the contract. Unhappy with the result, InfoMath brought this suit against the university and two individual employees.

 

InfoMath argued that the Copyright Remedy Clarification Act ("CRCA") abrogated Eleventh Amendment Immunity. This is a troublesome argument because the Supreme Court has already struck down as unconstitutional the CRCA's companion statutes, the Patent Remedy Act and Trademark Remedy Clarification Act. Numerous lower courts have already held the CRCA is unconstitutional. The district court sided with the great weight of authority and held that the CRCA is unconstitutional.

 

InfoMath's final argument was that the ACC's award was insufficient and violated the Fourteenth Amendment. The court disagreed and noted that, while InfoMath sought additional relief, the award was not so inadequate that it violated the Fourteenth Amendment.

• Print
• Comments
• Trackbacks

The District Court of Minnesota granted a preliminary injunction based on trademark infringement and trademark dilution in J&B Wholesale Distributing, Inc. v. Redux Beverages, LLC, 2007 WL 4563457 (D. Minn. 12/20/07).

 

J&B sells steaks and other meat products under the trademark No Name. It owns several trademark registrations for "No Name" and has sales over $26 million. Redux sold Cocaine energy drinks, but the FDA caused them to quit using the word "cocaine." Redux renamed its energy drinks No Name.  

 

Although the companies are not direct competitors, the court held the products are closely related enough to create confusion. The court found that J&B was likely to succeed on both claims and would suffer irreparable harm without the injunction. J&B was required to post a $50,000 bond.

• Print
• Comments
• Trackbacks

The District Court of Minnesota granted a preliminary injunction based on trademark infringement and false advertising in Fitger's On-The-Lake, LLC v. The Fitger Company, LLC, 2007 WL 4531502 (D. Minn. 12/19/07).

 

Fitger's has operated a brewery in Minnesota since the 1880's, and it holds a number of trademarks that have now become famous. The current location is a full resort spa complete with a hotel, restaurants and ample shopping. The defendant Douglas Donnelly claims he is related to August Fitger, the original brewmaster for Fitger's. Donnelly believes this entitles him to set up businesses using Fitger's trademarks and making false statements that his companies are the "official Fitger beer" operated "since 1881." He even filed fraudulent trademark applications with the USPTO.

 

Despite Donnelly's novel argument, ancestry cannot confer trademark rights. The court granted the preliminary injunction both on grounds of trademark infringement and false advertising.

• Print
• Comments
• Trackbacks

The District Court of Nebraska denied a motion to dismiss for lack of personal jurisdiction in Denenberg v. Djordjevic, 2007 WL 4525011 (D. Neb. 12/18/07).

 

Dr. Steven Denenberg is a plastic surgeon in Omaha, Nebraska. Like many in his profession, he posts before/after photographs on his website to promote his work. Denenberg obtained a copyright registration. Dr. Borko Djordjevic, a competing surgeon in California, copied  over 30 pairs of these photos and posted them on his websites as examples of his own work. Denenberg filed suit for copyright infringement, and Djordjevic moved to dismiss for lack of personal jurisdiction.

 

The court easily denied the motion to dismiss. Djordjevic used the photos to solicit clients in Nebraska. Moreover, he knew he had not performed the surgeries and publishing the photos on his website would cause harm to Denenberg in Nebraska.

• Print
• Comments
• Trackbacks

The Western District of Arkansas denied plaintiff's motion to dismiss the counterclaim in Lewis & Clark Outdoors, Inc. v. Mahco, Inc., 2007 WL 4510364 (W.D. Ark. 12/18/07) (previously posted 5/1/07).

 

Mahco has counterclaimed against Lewis & Clark Outfitters (LCO) for trademark infringement. Mahco has admitted it no longer uses the "Lewis & Clark" mark, and LCO moved to dismiss on grounds of abandonment. To abandon a trademark, the owner has to cease use and show an intent not to resume use. The court denied the motion because all that LCO established is that Mahco no longer uses the mark; no evidence has been submitted regarding Mahco's intent.

• Print
• Comments
• Trackbacks

A trademark infringement dispute involving university merchandise has taken an interesting turn. See Lloyd Sales Co., Inc. v. The Game, LLC, No. 07-1198 (E.D. Ark., filed 12/18/07). The Game sells merchandise of various universities by placing university logos on its own 3-bar logo. Lloyd Sales provides similar goods for the University of Arkansas and filed this suit to declare its use of a similar 3-bar pattern is not trademark infringement.

 

It is unclear what this lawsuit is meant to accomplish because The Game has already filed suit against Lloyd Sales in Georgia. See The Game, LLC v. Lloyd Sales Co., Inc., No. 07-2498 (N.D. Ga., filed 10/10/07). In that case, Lloyd Sales has filed a motion to dismiss for lack of jurisdiction, or alternatively, to transfer the case to Arkansas. The motion was submitted to United States District Court Judge Charles A. Pannell yesterday.

• Print
• Comments
• Trackbacks

The Western District of Missouri granted a preliminary injunction based on trademark infringement in Community of Christ Copyright Corp. v. Miller, 2007 WL 4333192 (W.D. Mo. 12/7/07).

 

Community of Christ holds federal trademark registrations for "RLDS" and "Reorganized Church of Jesus Christ of Latter Day Saints." Defendants' church is named South Restoration Branch, but they advertised themselves as members of RLDS. The court easily granted the preliminary injunction and rejected the defendants' fair use defense. Contrary to some public opinion, use of trademarks for worshiping God are not automatically fair use.

• Print
• Comments
• Trackbacks

The Eighth Circuit affirmed summary judgment, to both parties, in a unique case involving a noncompete agreement. See Guardian Fiberglass, Inc. v. Whit Davis Lumber Co., __F.3d__ (12/12/07). This is a long post because this brief opinion brings out some interesting points regarding noncompete agreements.  

The Parties and the Contract

Guardian Fiberglass holds a dominant market position in the insulation products market. Whit Davis Lumber is a lumber company in central Arkansas that sold insulation but never provided installation services to its customers. Guardian ran a program to assist companies like Whit Davis in providing installation services. The parties entered into a contract where Guardian shared information with Whit Davis, including a notebook containing extensive information about providing insulation services. Whit Davis agreed to purchase insulation exclusively from Guardian.

Additionally, the contract had a noncompete clause. If Whit Davis terminated the contract, it would not provide installation services for 2 years after termination. If Guardian terminated the contract, the noncompete provision would not apply. Note that the noncompete agreement only applied to installation services; it did not affect Whit Davis's other business operations.

The parties performed under the contract from 1998 - 2004, and Whit Davis purchased $2.2 million of insulation products from Guardian during this period. Then Whit Davis started purchasing insulation from other suppliers in breach of the contract. Guardian then terminated the contract and brought suit for breach of contract and breach of the noncompete agreement.

The District Court Opinion

The district court granted summary judgment to Whit Davis on the noncompete claim, holding that Guardian did not have a protectable interest to enforce the noncompete agreement. (Note: Michigan law applied, but its law of noncompete agreements is essentially the same as Arkansas) The district court also granted partial summary judgment to Guardian on the breach of contract claim.

The Eighth Circuit Decision

The Eighth Circuit affirmed. First, the court held the noncompete does nothing to protect Guardian's goodwill because Whit Davis never used the Guardian name to promote its installation services. Second, the information Guardian provided was not a trade secret. The court described the information as ordinary knowledge.

Continue Reading...

• Print
• Comments
• Trackbacks

The District Court of Minnesota transferred a copyright infringement case to the Northern District of Texas (Dallas division) in RMC Publications, Inc. v. Doulos PM Training, 2007 WL 4287670 (D. Minn. 12/4/07).

 

Gary Rechtfertig offers project management courses in Texas. He used exam-simulation software under a license from RMC Publications. However, he made illegal copies and violated the terms of the license, which amounts to copyright infringement. RMC filed this action in Minnesota.

 

Rechtfertig's only contacts with Minnesota were buying the software and negotiating with RMC's sales agents. The court held that Minnesota had neither personal jurisdiction over Rechtfertig nor was it the proper venue for the suit. The court transferred the case to the Northern District of Texas.

• Print
• Comments
• Trackbacks

The Arkansas Court of Appeals dismissed the appeal for failure to timely file the record in Murphy v. Michelle Smith Designs, No. 07-251 (12/5/07).

 

Murphy sold the assets of his embroidery business to Smith. He agreed to work for her as a manager and signed a noncompete agreement that he would not compete against her for 2 years after his employment ended. However, he opened a competing business immediately after his employment ended.

 

Smith obtained a preliminary injunction to prohibit Murphy from operating a competing business. After the trial was delayed, the trial court refused to dissolve the preliminary injunction on January 23, 2007. Murphy appealed that order and filed the record with the clerk on March 9, 2007. When a party appeals a refusal to modify a preliminary injunction in Arkansas, the record must be filed with the clerk within 30 days of the entry of the order. See Ark. R. App. P.--Civ. 5(a). In this case, Murphy had to file the record by February 22, 2007. The court dismissed the appeal for lack of jurisdiction.

• Print
• Comments
• Trackbacks

The Eastern District of Missouri permitted the subpoena of an internet service provider (ISP) in UMG Recordings, Inc. v. Does 1 - 24, 2007 WL 4205768 (E.D. Mo. 11/26/07).

 

UMG and other record companies brought this copyright infringement lawsuit against unknown infringers. Plaintiffs had the Internet Protocol (IP) addresses of the defendants. Charter Communications is the defendants' ISP, which maintains subscriber contact information in activity logs. These logs are kept for a short time and then permanently destroyed. The plaintiffs sought permission to subpoena Charter to match the IP addresses with the defendants' individual names.

 

The court granted the request, largely because the information is not available elsewhere, and the case cannot proceed without identifying the defendants.

• Print
• Comments
• Trackbacks

The Eastern District of Missouri denied summary judgment in St. Louis Cardinals, LLC v. Lewis, 2007 WL 4205798 (E.D. Mo. 11/26/07).

 

Douglas Lewis has attempted to obtain federal trademark registrations based on the St. Louis Cardinals' trademarks, such as this application for "Go Cards." He also obtained a number of state registrations. The Cardinals filed this action for trademark infringement, and  Lewis moved for summary judgment. In a one-page opinion, the court denied the motion without comment. It is likely the Cardinals will file their own motion for summary judgment before the trial.

• Print
• Comments
• Trackbacks

The District Court of North Dakota granted a temporary restraining order based on trade secret misappropriation in CDI Energy Services, Inc. v. West River Pumps, Inc., 2007 WL 4180581 (D.N.D. 11/20/07).

 

CDI Energy sells oilfield supplies and provides services to oil companies. The industry is specific an individualized, requiring detailed customer information. Three employees ran CDI's branch in Dickinson, North Dakota. On October 16, 2007, these employees resigned and opened West River Pumps, Inc. They took with them all CDI's customer information, and almost all CDI's customers transferred their business to West River.

 

The defendants chose October 16 because this was a time of year when CDI's customers had increased business. When the defendants resigned, CDI had no employees in Dickinson to meets its customers' needs. The customers had to transfer their business to West River to ensure their needs were met.

 

The court had no trouble issuing the temporary restraining order, finding CDI had established likelihood of success and irreparable harm on its trade secrets claim. CDI was not required to post a bond.

• Print
• Comments
• Trackbacks

The Eastern District of Missouri transferred a case involving trade secret misappropriation and breach of a Missouri noncompete agreement in Buckeye Int'l, Inc. v. Unisource Worldwide, Inc., 2007 WL 4178615 (E.D. Mo. 11/19/07).

 

The dispute centered around Craig Sasso. Sasso was a salesman and then manager for Buckeye International's facility in Georgia. He signed a noncompete agreement that was limited to his sales area. Unisource Worldwide hired Sasso, and he began selling products in Georgia. Buckeye filed this suit in Missouri. Unisource filed suit in Georgia and moved to transfer the Missouri case to Georgia.

 

The court transferred the case to Georgia because the witnesses and documents regarding this dispute are located in Georgia. Additionally, the dispute at issue is Sasso's contact of customers in Georgia. Although these are not the typical red flags stated by the Eighth Circuit, the court felt these were compelling circumstances to supersede the first-filed rule.

• Print
• Comments
• Trackbacks

The Western District of Arkansas dismissed some of the counts in the counterclaim in Cook v. Illumination Station, Inc., 2007 WL 4166215 (W.D. Ark. 11/20/07) (most recently posted 8/1/07).

 

Cook based her claim for fraud and deceptive trade practices on an employment contract which turned up during the litigation. Cook claimed her signature on this contract was forged. The court held the fraud claim must fail because Cook could not establish detrimental reliance if she did not know about the signature. The deceptive trade practices claim failed because that law protects consumers; it does not regulate the conduct of litigants.

 

Both sides have now dismissed some of the other side's claims. (Cook's dismissal of various claims previously posted 6/15/07)

• Print
• Comments
• Trackbacks

Nelson Design Group (NDG) filed an architectural design copyright infringement lawsuit in the Eastern District of Arkansas. Nelson Design Group, LLC v. Puckett, No. 07-177 (filed 11/21/07). Puckett is a former employee of NDG. According to the Complaint, Puckett copied NDG's designs and gave them to defendants. The defendants used these designs to build houses in Jonesboro, Arkansas. 

 

The Complaint alleges eight counts of copyright infringement and breach of Puckett's employment contract. The Complaint is accompanied by a motion for preliminary injunction but does not include a count for computer fraud.

 

• Print
• Comments
• Trackbacks

The Western District of Arkansas found the defendant in civil contempt for violating a court order in Rotoworks Int'l Ltd. v. Grassworks USA, LLC, 2007 WL 3444261 (W.D. Ark. 11/8/07). The most interesting part of the ruling came from the court's frustration with the attorneys, which was already evident in the last order (previously posted 9/12/07).

 

The final straw came when the parties sent letters to the court without first getting permission to do so.  Aside from suffering service defects, these letters were "presumptuous and inappropriate." The court stated:

This is not the first time that personal feuding between the attorneys has disrupted the orderly progress of this case and wasted judicial resources, and the Court will have no more of such conduct

The court then stated it may hold a hearing to examine the conduct of the attorneys and concluded with this directive:

It may be that, after such a hearing, it will be appropriate to refer the entire matter to the Arkansas Supreme Court on Professional Conduct for a review of the conduct of the attorneys throughout the case. In the meantime, the Court will insist that the attorneys focus their efforts and energies on the issues which affect their respective clients, and cease bickering among themselves.  

• Print
• Comments
• Trackbacks

The Eastern District of Arkansas imposed sanctions in Kashlan v. TCBY Systems, LLC, 2007 WL 3309123 (E.D. Ark 11/6/07).

 

Kashlan sued TCBY for breach of contract and trademark infringement. Kashlan refused to comply with discovery requests and provided inadequate information to others. The Court was clearly most disturbed by Kashlan's counsel refusing to communicate with TCBY's counsel regarding discovery issues:

The Court notes that the majority of these discovery issues could have and should have been resolved without court intervention if Kashlan's counsel had taken the time to communicate. That Plaintiff's counsel refused to engage in any discussions regarding discovery, thereby necessitating the filing of a motion, supports an award of sanctions.

The Court will award reasonable expenses, including attorney's fees. Kashlan's counsel will be responsible for paying the expenses.  

• Print
• Comments
• Trackbacks

A recent trademark infringement case featured the seldom-used counterclaim-in-reply. Feed Management Systems, Inc. v. Brill, 2007 WL 3156282 (D. Minn. 10/30/07).

 

Feed Management filed suit for breach of contract and related claims. With permission from the court, Brill filed a counterclaim for trademark infringement after the deadline to amend pleadings. Feed Management filed a counterclaim-in-reply for trademark infringement, which Brill moved to dismiss as not permitted under Fed. R. Civ. P. 7(a).

 

The court stated a counterclaim-in-reply is a proper pleading if it is a compulsory reply to the counterclaim. The court determined that Feed Management's counterclaim-in-reply for trademark infringement was a compulsory reply to Brill's counterclaim and permitted the pleading.

• Print
• Comments
• Trackbacks

Coulson Oil has filed a declaratory action of no trademark infringement in the Eastern District of Arkansas. See Coulson Oil Co., Inc. v. Deweese Enterprises, Inc., No. 07-1102 (filed 11/9/07).

 

According to the Complaint, Coulson Oil operates gas stations under the trademark "SuperStop" (picture below, obviously a few years old from the gas prices). Deweese obtained a federal trademark registration in 1982 for "Super Stop." The Complaint alleges that Coulson obtained trademark rights in Arkansas before Deweese obtained its registration.

 

• Print
• Comments
• Trackbacks

Lindsey Management filed a trademark infringement action in the Eastern District of Arkansas. See Lindsey Management Co., Inc. v. The Links at Northcreek, LLC, No. 07-1076 (filed 11/1/07).

 

The main defendant is Hayden Properties, LLC, an Oregon company. The Complaint states that Hayden owns The Links at Northcreek, LLC. The dispute arises over an apartment community in Mississippi called The Links at Northcreek. Lindsey Management owns a federal trademark for "The Links" as applied to residential real estate development services.  

 

Two issues look interesting from reading the Complaint. First, it is unclear how Arkansas has jurisdiction over these defendants. The Complaint just makes a conclusory allegation that defendants conduct business and commit trademark infringement in Arkansas. Second, the word "links" seems to be common for apartments. A quick Google search shows one here in Georgia and one here in North Carolina; neither of these are Lindsey properties.

 

• Print
• Comments
• Trackbacks

Several plaintiffs have filed a lawsuit for copyright infringement and Lanham Act claims against Thomas Simon. See Baca v. Simon, No. 07-4447 (E.D.N.Y., filed 10/24/07) (view full text of the complaint here).

 

What makes this case so remarkable is that everything occurred in Second Life. Simon copied various items that the plaintiffs create and sell in Second Life. The lawsuit has received nationwide attention (coverage at the Patry Copyright Blog and Second Life Blogger). This should be a straightforward copyright infringement case.  

• Print
• Comments
• Trackbacks

The District Court of Minnesota refused to dismiss part of an architectural design copyright infringement complaint in U.S. Home Construction v. R.A. Kot Homes, Inc., 2007 WL 3037321 (D. Minn. 10/16/07).

 

Plaintiff owns two copyright registrations for an architectural design called the Remington. Defendant built a home that allegedly copied this design. Plaintiff filed a copyright infringement suit and asked for reputational damages but did not include a Lanham Act claim for unfair competition.

 

Defendant moved to dismiss the part of the complaint seeking reputational damages. The court rejected this argument and cited several cases that have permitted copyright owners to recover reputational damages. The court's opinion suggests Plaintiff will have additional remedies if it files an under the Lanham Act.

• Print
• Comments
• Trackbacks

The Central District of California granted a preliminary injunction in Ticketmaster, LLC v. RMG Technologies, Inc., No. 07-2534 (10/16/07; full text of order here).

 

Ticketmaster sells tickets for entertainment and sports events to the public. Access to its website is governed by specific Terms of Use, which prohibit the use of automated software. Ticketmaster has had some negative press recently when its events sell out in a matter of minutes. Tickets to these events then appear on websites such as StubHub at prices significantly above their face value (or they are offered for free with a $500 coffee mug). The problem comes from software that permits its users to infiltrate the Ticketmaster system and purchase bulk quantities of tickets.  

 

RMG is one such software provider that designs a software specifically tailored to elude the policing controls in force by Ticketmaster. The software is run through RMG's computer system.  RMG's customers log in to RMG's system and then use the software to purchase bulk tickets. Ticketmaster filed suit primarily for copyright infringement, violation of the Digital Millennium Copyright Act, violation of the Computer Fraud and Abuse Act, and breach of contract.

 

The court anchored its decision on two main points: (1) Ticketmaster owns a copyright in its website; (2) visitors to the website are granted a nonexclusive license to use the website under the conditions set out in the Terms of Use. The court held that RMG itself violated the Terms of Use and caused its customers to violate the Terms of Use. As a result, Ticketmaster showed a likelihood of success on all its causes of action.

 

As to irreparable harm, Ticketmaster received some help from the Arkansas Attorney General. The court observed that public outcry over the unavailability of Hannah Montana tickets caused the Attorneys General of Arkansas and Missouri to initiate investigations. The court held that RMG was causing extensive damage to Ticketmaster's goodwill, which amounts to irreparable harm. Ticketmaster was required to post a $300,000 bond.   

• Print
• Comments
• Trackbacks (1)

The Eighth Circuit issued its much anticipated opinion in a dispute regarding the use of professional baseball statistics in fantasy games. C.B.C. Distribution and Marketing, Inc. v. Major League Baseball Advanced Media, L.P., No. 06-3357/3358 (10/16/07). This was an important case, with amici briefs filed by the NFL, NBA, NHL, NASCAR, PGA and WNBA. The district court opinion was previously posted here (1/18/07).

 

CBC operates a fantasy baseball game using Major League Baseball players' names and statistics. In previous years, CBC licensed the names and statistics from the Major League Baseball Players Association. This dispute arose when MLBPA refused to renew the license but CBC continued to use the names and statistics in its games. The MLBPA brought claims under the Missouri right of publicity statute. The district court concluded that CBC did not violate the statute, that first amendment concerns trumped the statute, and that the statute was not preempted by the Copyright Act.

 

The Eighth Circuit affirmed on first amendment grounds. The right of publicity statute at issue only requires (1) the defendant use the plaintiff's name as a symbol of his identity (2) without consent (3) and with the intent to obtain a commercial advantage. The court held that CBC's use of the players' names and statistics satisfied these elements. However, state law rights of publicity must be balanced against first amendment considerations. Zacchini v. Scripps-Howard Broad., 433 U.S. 562 (1977).

 

Discussed more after the break, the court found that first amendment concerns trump the right of publicity statute. This determination made the preemption issue moot, and the court declined to address preemption.

Continue Reading...

• Print
• Comments
• Trackbacks

The Northern District of Iowa refused to compel production of customer names in J. Lloyd Int'l, Inc. v. Imperial Toy Corp., 2007 WL 2934903 (N.D. Iowa 10/5/07).

 

J. Lloyd filed a trademark infringement action against Imperial Toy. In discovery, J. Lloyd requested the names of Imperial Toy's manufacturers and customers. Imperial Toy objected, and J. Lloyd filed a motion to compel. The court denied the motion, noting that the names of the defendant's customers are rarely if ever revealed in litigation.

• Print
• Comments
• Trackbacks

The Eastern District of Arkansas declined to stay proceedings pending a reexamination by the USPTO in Monsanto v. Kyle, 2007 WL 2904143 (E.D. Ark. 10/3/07).

 

Monsanto's patent is being reexamined, and Kyle requested a stay of the court proceedings. The court easily declined this request. The case has been ongoing since November 2004, discovery (which was extensive) has concluded, dispositive motions have been filed and decided, and trial is scheduled for mid-November 2007. A stay would not simplify the issues at trial and would cause prejudice to Monsanto.

• Print
• Comments
• Trackbacks