Trademark Claims

Getting the Least Out of a Nondisclosure Agreement

SL Montevideo brought suit against Eaton Aerospace for trade secret misappropriation and breach of a nondisclosure agreement regarding an airplane motor. SL Montevideo could not establish the information was a trade secret, so it relied on the contract claim on appeal. The Eighth Circuit affirmed, noting that SL Montevideo somehow chose to structure the nondisclosure agreement as having a trade secret requirement:

To be sure, agreements such as the Proprietary Information Agreement (PIA) may protect broader categories of information than trade secrets. But the PIA’s exclusions limited its protection to information having the same characteristics of secrecy and novelty as trade secret.

Patent Litigation

Court Refuses to Transfer Travel Tags Patent Case

Travel Tags owns a patent for a process for making lenticular cards. On July 11, 2006, Travel Tags filed a patent infringement lawsuit against Performance Printing, a Texas company. Travel Tags did not serve the lawsuit, and the parties entered into licensing negotiations with. On November 1, 2006, Travel Tags served the lawsuit, but Performance Printing also filed a declaratory action in Texas.

Performance Printing moved to dismiss for lack of jurisdiction or to transfer the case to Texas. The court denied the motion but Performance Printing can raise the jurisdiction issue again after completing discovery.


Foremost Insurance Appeals $45 Million Discovery Order to Arkansas Supreme Court

The Southeast Texas Record notes an appeal (either an interlocutory appeal or a request for extraordinary writ relief) in Chivers v. State Farm, one of the many nationwide class actions simmering in the Texarkana, Arkansas-based state courts.

Chivers is a case against several major insurers over the way the insurers compensate contractors:

The lawsuit involves allegations that after a loss or damage to an insured’s property, insurance companies did not disclose or pay the general contractors’ overhead and profit. Although the insurance companies paid the claims to the insurers, the plaintiffs state they are entitled to the additional money. The complaint states that general contractors’ overhead and profit is 20 percent of an estimated construction job cost and is a paid-for-benefit to the customer.
The issue in the appeal is Circuit Judge Kirk Johnson’s order that one of the defendants, Foremost Insurance, produce discovery at a cost of $45 million.

Judge Johnson’s disagreed with Foremost’s cost estimate in his order and stated that non-lawyer clerks could be employed to search the discovery for privileged material:

After Judge Johnson analyzed the costs of production of Foremost’s claim files, he believes 90 percent of the costs are for attorneys’ fees for removing attorney-client work product, which “can be identified by company clerks for attorney review at a greatly reduced rate of pay.”


Puddle of Mudd Copyright Case Will Proceed for Now

This case centers around the alternative-metal group Puddle of Mudd. Patrick Spurgeon filed this suit claiming that, in 1999, he and Puddle of Mudd front-man Wesley Scantlin co-authored 2 songs. In August 2001, Puddle of Mudd released an album with a song substantially similar to the disputed songs.

The lawsuit was styled as a declaratory action of co-ownership rather than one for copyright infringement. Spurgeon argued this imposed the 5-year statute of limitations rather than the standard 3-year period for copyright cases. The district court rejected this argument and held the 3-year limitations period would apply. The court denied the motion to dismiss but hinted that Puddle of Mudd will likely win this case at the summary judgment stage.