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Georgia IP Litigation: November 2012

BLOGS: Georgia IP Litigation

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Friday, November 30, 2012, 5:32 PM

Acceleron Asserts its '021 Patent Against Dell, Inc.

Acceleron, LLC has filed another lawsuit asserting U.S. Patent 6,948,021 (“the ‘021 Patent”), now against defendant Dell, Inc., the second lawsuit filed on the ‘021 Patent in roughly the last 3 months.

As previously mentioned in a September 5 post, Acceleron had sued Hitachi Data Systems Corporation in late August 2012 for infringement of the ‘021 Patent.

On November 28, Acceleron filed a complaint in the Northern District of Georgia against Dell for infringement of the ‘021 patent, which is entitled “Cluster Component Network Alliance System and Method for Enhancing Fault Tolerance and Hot-Swapping.”   Acceleron identifies Dell’s
PowerEdge[]  M1000e Blade Enclosure, associated models, and [certain specified] server blades” as the accused products.  

Acceleron believes the infringement to be willful, and pursuant to 35 U.S.C. § 284 seeks increased damages as well as injunctive relief and the costs of the action.

The case is Acceleron, LLC v. Dell, Inc., No. 1:12-cv-4123-TCB, filed 11/28/12 in the U.S. District Court for the Northern District of Georgia, Atlanta Division, assigned to U.S. District Judge Timothy C. Batten, Sr.

Note:  The assistance of Womble Carlyle paralegal Nick Vaughan in the preparation of the foregoing summary is gratefully acknowledged.

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“The Librarian” Makes Noise: Copyright Claims Included in Multi-Count Complaint Detailing Split Between LLC Members

Assertions of copyright infringement, breach of contract, and tortious conduct appear in a 30-page complaint filed by and against LLCs and individuals all based in the Atlanta metro area.

On November 20, 2012, Brightharbour Consulting, LLC3Lins, LLC, Alden D. Kent, and Hsi-Ming Lin filed a complaint in the Atlanta Division of the Northern District of Georgia against Docuconsulting, LLC, Pivot LLC, Broadwater LLC, Richard Lee, and Daniel Haggerty. The complaint asserts copyright infringement counts and a count under O.C.G.A § 13-6-11 against all defendants, as well as other counts against all defendants except Broadwater, namely, breach of fiduciary duty, unjust enrichment, civil conspiracy, and breach of contract.

The complaint includes the following allegations:
  • In November of 2008, Brightharbour LLC and Pivot LLC, owned by Alden Kent and Richard Lee respectively, joined to form Docuconsulting LLC (“Docuconsulting”).  Docuconsulting specializes in “…the business of assisting insurance companies and companies in the insurance industry to improve their processes through computer software technology.”  Several months later, 3Lins, LLC and Broadwater LLC, owned and operated by Hsi-Ming Lin and Daniel Haggerty, respectively, joined Docuconsulting.
  • On January 1, 2011, the members of Docuconsulting LLC (namely, Brightharbour, Pivot, 3Lins, and Broadwater) entered into an Operating Agreement (Exhibit A to the complaint).  The agreement established Lin, Kent, Lee and Haggerty as Docuconsulting’s managers, and split its ownership to 25% per member, with distributable profits paid to each owner.
  • “From November 2008, until March 2012, Plaintiffs Brightharbour and 3Lins received compensation through member distributions.”  However, the Docuconsulting distributable cash to which they were entitled under the Operating Agreement has not been paid to them since February 2012, and certain other distributable cash has been withheld since 2010.
  • All 4 Docuconsulting members had access to the Docuconsulting bank account until approximately January 2012, when the defendants, “…transferred all of the funds from the Docuconsulting bank account to a new account in which Lee and Haggerty, on behalf of Pivot and Broadwater, are the sole signatories.”
  • Since February 2012, 3Lins and Brightharbour “…have not been provided with any distributions…resulting in not getting paid their share of over $500,000.”  During this same time period the defendants have allegedly transferred an inordinate amount of funds to Pivot, Broadwater, and their owners.
  • Alden Kent and Hsi-Ming Lin are the creators and owners of a software program called The Librarian.  Additionally, Kent is the sole author and owner of a software program called ExPRS Manual Correspondence.  Both The Librarian and ExPRS Manual Correspondence were registered with the U.S. Copyright Office.[1]  
  • Both programs “are being used without the permission of Plaintiffs Kent and Lin by the Defendants or and with customers of Docuconsulting.”  Defendants Lee and Haggerty have allegedly blocked the plaintiffs’ access to essential work materials since April of 2012, “…preventing them from participating in Docuconsulting’s operations and from performing work for Docuconsulting’s clients and customers.” Since that time, Docuconsulting, Lee, and Haggerty have continued to use both aforementioned software programs without permission, resulting in the collection of profits to which they are not entitled.
  • Plaintiffs sent Defendants a cease-and-desist letter on October 17, 2012.
Plaintiffs seek an accounting as well as various forms of injunctive and monetary relief recited in the Copyright Act, stemming from their counts for direct, contributory, and vicarious copyright infringement as to both computer software programs. 

The case is Brightharbour Consulting LLC, 3Lins LLC, Alden D. Kent, and Hsi-Ming Lin v. Docuconsulting LLC, Pivot LLC, Broadwater LLC, Richard Lee, and Daniel Haggerty, Case No. 1:12-cv-4050-TWT, U.S. District Court for the Northern District of Georgia, Atlanta Division, and is assigned to U.S. District Judge Thomas W. Thrash Jr.

Note:  The assistance of Womble Carlyle paralegal Nick Vaughan in the preparation of the foregoing summary is gratefully acknowledged.

[1] According to on-line Copyright Office records, the Librarian program was registered on September 12, 2012, and the ExPRS Manual Correspondence program was registered on October 22, 2012.

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Thursday, November 29, 2012, 2:21 PM

3form Files New Suit Over Design Patents, Utility Patents, and Trademark Relating to its Architectural Panels

With one recent Northern District of Georgia action under its belt (see our October 31 and November 16 posts), 3form, Inc. ("3form") has launched a nationwide campaign to enforce its design patents, utility patents, and trademark relating to architectural wall designs and products. 

On November 20, 2012, Utah-based 3form and Swiss-based Hunter Douglas Industries Switzerland GmbH ("Hunter Douglas") filed a complaint in the Northern District of Georgia against Novateur Design Solutions, LLC ("Novateur"), of Alpharetta, Georgia.  Unlike 3form's previous action, which asserted a single design patent, this sixteen-count complaint alleges infringement of eight design patents, six utility patents -- one of which is assigned to Hunter Douglas but exclusively licensed to 3form, and a trademark.  On the same day, 3form and Hunter Douglas filed virtually identical suits in California, Texas, Washington, Minnesota, Arizona.  On the following day, the plaintiffs filed yet another similar case in Ohio.  

All of the allegations in the complaint relate to products manufactured, designated, and sold by New GlasPro, Inc. ("GlasPro") of California.  Upon a review of the related cases throughout the country, it appears that the plaintiffs are targeting customers/distributors of GlasPro's products, one of which is Novateur, but are not pursuing GlasPro.  The following chart indicates the patents asserted, the titles of each patent, and the GlasPro products accused to infringe each patent.

Accused Products
Architectural Panel with Thatch Reed Design
Polychrome Bamboo
Architectural Panel with Large Blade Grass and Flower
Asian Harvest
Asian Harvest Spring
Architectural Panel with Plant Stem and Leaf
Ting Ting Flowers Red
Ting Ting Flowers
Architectural Panel with Translucent Wood Design
Echo Woods in Glass
Architectural Panel with Buri Palm and Reed
Techweave Silver Smoke
Pearl Linen
Architectural Panel with Large Blade Grass and Thatch Reed
Sea Grass
Architectural Panel with Line and Bunch Interlayer Design
Linear Array Tea
Linear Array Bloom
Linear Array Gold
Linear Array Charcoal
Architectural Panel with Woven Textile Interlayer
Linear Array Tea
Linear Array Bloom
Linear Array Gold
Linear Array Charcoal
Resin-based Panels having Thin or Brittle Veneer Layers and Methods of Making Same
Echo Woods
Resin-based Panels having Translucent Veneer Layers
Echo Woods
Formable Fused Polymer Panels Containing Light Refracting Films
DS Dichroic
Architectural Panels with Objects Embedded in Resin Interlayer
Naturals in Glass
Architectural Panels with Objects Embedded in Resin Interlayer
Naturals in Glass
Thermoplastic Article Having Textile Fabric Embedded Therein
GlasPro-Rp Textiles in Resin

3form's CHROMA® product

One interesting aspect of 3form's allegations relates to the Lanham Act count.  According to the complaint, 3form markets its architectural panels in connection with the federally registered trademark "CHROMA."  (Although the complaint does not reference the USPTO registration number, it is Reg. No. 3523487.)  But 3form does not allege infringement of that trademark; rather, 3form claims that the "distinctive three-dimensional appearance of 3form's CHROMA® products have also obtained recognition, goodwill, and secondary meaning in the relevant marketplace, thereby affording 3form common law trademark protection in a three-dimensional trademark for its CHROMA® products."  Presumably these allegations refer to the CHROMA® products found here on its website.  

3form has attempted to register the alleged "3D" trademark with the USPTO, but to no avail at this point.  US Serial No. 85642498 is described as being directed to the "product configuration of decorative plastic panels for use in building and construction, consisting of a substantially flat and substantially translucent plastic sheet having a single color layer on one side and all of the sides and edges having a substantially consistent sanded finish, such that the product produces a glowing translucent appearance and the color appears to be diffused throughout the material."  The drawing and specimen submitted to the USPTO are below.  In the latest Office Action refusing registration, the Examiner stated that "the applied-for mark, as used on the specimen of record, does not function as a trademark to identify and distinguish applicant’s goods from those of others and to indicate the source of applicant’s goods.  Trademark Act Sections 1, 2, and 45, 15 U.S.C. §§1051-1052, 1127; see In re Phoseon Tech., Inc., 103 USPQ2d 1822, 1827-28 (TTAB 2012); In re Remington Prods., Inc., 3 USPQ2d 1714, 1715 (TTAB 1987); TMEP §§904.07(b); 1202 et seq."

SN 85642498 drawing
SN 85642498 specimen

3form seeks damages, injunctive relief, a declaration that this is an exceptional under 35 U.S.C. § 285 such that costs and attorneys' fees are warranted.

The case is 3form, Inc. et al. v. Novateur Design Solutions, LLC, No. 1:12-cv-04060-RLV, U.S. District Court for the Northern District of Georgia, Atlanta Division, and is assigned to U.S. District Judge Robert L. Vining, Jr. 

NOTE: For more information on design patents as distinguished from utility patents, and the current state of the law with respect to design patents, see these posts (here and here) written by our colleague Jake Wharton on his Furniture Law Blog.

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Monday, November 26, 2012, 6:11 PM

Trademark Infringement Asserted by American Deli against Boa Cho Corporation in Franchise Termination Case

Our posts of September 6, September 24, and October 16 covered cases involving holdover licensees, all in the context of hotel franchises.  The latest addition to the list of holdover licensee cases involves the restaurant business.

In a complaint filed in the Atlanta Division of the Northern District of Georgia on November 19, 2012, American Deli, Inc. (Deli) seeks to enjoin Boa Cho Corporation’s (Boa) allegedly improper use of proprietary marks, methods, systems, and techniques as violating the terminated franchise agreement between the parties, 15 U.S.C. §§ 1114 and 1125(a) (Trademark Infringement), 15 U.S.C. § 1125(c) (Lanham Act – Dilution), and 15 U.S.C. § 1125(c) (Lanham Act – Tarnishment).   Two principals of Boa, Ki Joon Koo and Hee Sook Kim are also named defendants.  Both Deli and Boa have their principal place of business in Georgia.

Deli asserts ownership of the following trademarks at issue in the case:

     -   AMERICAN DELI with accompanying logo, registered on March 16, 2010 as U.S. Trademark Reg. No. 3,759,934, reciting a first use date of February 1989.  [This mark was erroneously designated with Registration Number 3741212 in the complaint.] 
     -  AMERICAN DELI word mark, registered on March 16, 2010 as U.S Trademark Reg. No. 3,759,938, reciting a first use date of February 1989.

     -   AMERICAN DELI word mark, registered on January 19, 2010 as U.S. Trademark Reg. No. 3,741,212, reciting a first use date of September 21, 2009.

The parties entered the franchise agreement (attached as Exhibit A to the complaint) on April 14, 2011, which included the following exhibit agreements executed by the defendant Ki Joon Koo:  Controlling Principals Personal Guaranty and Covenant and the Confidentiality Agreement and Ancillary Covenants Not To Compete.

Deli alleges that the Boa franchise was terminated due to the following seven intentional material breaches which are collected in three categories summarized below:[1]

(1) Competing during the term of the franchise by operating or selling restaurant locations with a menu similar to Deli (primarily focusing on chicken wings or philly cheese steak sandwiches), including competing directly with Deli and stores outside of Georgia;

(2)  Infringing Deli’s trademarks and using Deli’s proprietary marks and confidential materials in connection with the development building and sale of unauthorized locations; and

(3)  Inaccurately reporting store revenues and underpaying royalties.

Deli asserts that after termination of the franchise, Boa continued to use Deli’s proprietary marks and compete directly with Deli in violation of post-termination non-competition covenants.

The complaint accuses the defendants of operating the following Georgia restaurants in violation of their contractual obligations and Deli’s proprietary rights:  American Deli House, 801 No. Houston Rd., Warner Robins; American Deli, 919 Pio Nono Ave., Macon; American Deli House, 131 E. Solomon St., Griffin; and American Deli House, 5576 Bloomfield Rd., Macon.

Deli charges defendants with developing, building, and selling World Deli locations using Deli confidential information and propriety information including an almost identical menu  in other Georgia locations (Dublin and Claxton), as well as in Alabama and South Carolina.  Furthermore, Deli alleges that defendants use Deli’s preferred pricing with its food distributor, US Foods, for use at World Deli locations.

In addition to the injunction, Deli seeks a disgorgement of profits.  Should Deli be successful, a future blog may be entitled:  “Boa Constricted and Dewinged.”

The case is American Deli, Inc. v. Boa Cho Corporation, Ki Joon Koo, and Hee Sook Kim, No. 1:12-cv-4031, filed 11/19/12 in the U.S. District Court for the Northern District of Georgia, Atlanta Division, and has been assigned to U.S. District Judge Julie E. Carnes.

[1] Deli maintains that this list is not exhaustive of defendants’ material breaches.

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QVC and Two Florida-Based Corporations Sued for Patent and Trade Dress Infringement

On November 15, 2012, Atlanta-based Pursen, LLC ("PurseN"), claiming exclusive rights to a purse organizer insert, sued QVC, Inc. and two Florida-based corporations (Great Innovations, Inc. and For Life Products, Inc.) for patent infringement, trade dress infringement, and related state law causes of action.

PurseN is the owner of record of U.S. Patent No. 8,225,829 ("the '829 Patent"), issued July 24, 2012 from an application filed in 2008, which claims priority to an earlier application filed on March 29, 2007.  Titled "Transferable Purse Organizer," the '829 Patent discloses an organizer insert, transferable from one bag (purse) to another, that "stabilizes the contents of the bag, while positioning the contents of the bag for ease of location and removal."  Figures 1 and 2 of the '829 patent are reproduced below.
Fig. 1, showing organizer insert 100 positioned within bag 10
Fig. 2, isolating the organizer insert 100

PurseN asserts that the '829 Patent covers its PurseN Organizer Insert, a product that PurseN alleges it first sold "at trade shows in or around August of 2008."  PurseN alleges that by the end of 2009, that product "was being sold to 500 customers, mostly retail stores, throughout the United States," and it earned over $595,000 in sales from that product in 2008 and 2009.  Additionally, PurseN claims rights to what it calls the "PurseN Trade Dress," which "established secondary meaning in the marketplace such that purchasers have come to associate it with PurseN."  The complaint identifies the following elements of that trade dress:
a.       Smooth, satiny matte fabric covering rigid side walls, and expandable end and bottom walls, with a coordinating patterned fabric lining the inside surfaces of the walls;
b.      A fabric strip extending horizontally across the outer surface of each end wall, at approximately mid-height; and
c.       Two pockets arranged on one outer side wall and one pocket centered on the opposing outer side wall of the purse organizer.

To illustrate some of those elements, some views of a PurseN Organizer Insert are shown below.

Side, end, and top views of a PurseN Organizer Insert depicted in PurseN's website

Defendant Great Innovations, Inc. is the named registrant on U.S. Trademark Reg. No. 4,115,614, for the mark PURSFECTION®, for “a purse insert organizer in the nature of a pouch containing pockets and compartments that fits inside purses and handbags for use in storing personal items.”  That registration recites June 30, 2010 as the date of first trademark use.  Great Innovation's website, the "About Us" page of which recites the Florida address ascribed to it in the complaint, and the home page of which recites "As seen on [QVC logo]," depicts PURSFECTION® products such as that shown below.
PURSFECTION® "Deluxe Purse Organizer" shown in website

PurseN alleges that products sold by Defendants without its permission, including the “Pursefection™ Interchangeable Purse Organizer,” infringe not only the ‘829 Patent, but also the PurseN Trade Dress.  PurseN claims that it had notified Defendants in writing of its pending patent application “as early as November 19, 2010.”   Based on its trade dress infringement allegations, PurseN also asserts six claims under Georgia law.  The complaint seeks injunctive and monetary relief, including punitive damages and attorney's fees.

Below are summarized general legal principles governing trade dress infringement claims.

“Section 43(a) [of the Lanham Act] creates a federal cause of action for trade dress infringement.  ‘The term 'trade dress' refers to the appearance of a product when that appearance is used to identify the producer.’”[1]  “'Trade dress' involves the total image of a product and may include features such as size, shape, color or color combinations texture, graphics, or even particular sales techniques.”[2]  “In order to prevail on this claim for trade dress infringement under § 43(a), [one] must prove that (1) the product design of the two products is confusingly similar;  (2) the features of the product design are primarily non-functional; and (3) the product design is inherently distinctive or has acquired secondary meaning.”[3]  The Supreme Court has held that two categories of unregistered marks or trade dress are not “inherently distinctive” and thus that secondary meaning must be proven to make them protectible: (1) color; and (2) product configuration.[4]

“Secondary meaning is the connection in the consumer’s mind between the mark and the product’s producer, whether that producer is known or unknown,” [5] and “is used generally to indicate that a mark or dress ‘has come through use to be uniquely associated with a specific source.’”[6]  “In the absence of consumer survey evidence, the Eleventh Circuit considers four factors to determine whether a particular mark has acquired secondary meaning: 1) the length and manner of its use;  2) the nature and extent of advertising and promotion;  3) the efforts made by plaintiff to promote a conscious connection in the public’s mind between the name and plaintiff’s business;  and 4) the extent to which the public actually identifies the name with plaintiff’s goods and services.”[7]

Regarding the “primarily non-functional” requirement: “‘a product feature is functional,’ and cannot serve as a trademark, ‘if it is essential to the use or purpose of the article or if it affects the cost or quality of the article,’ that is, if exclusive use of the feature would put competitors at a significant non-reputation-related disadvantage.”[8]  If an asserted trade dress feature was also claimed in a utility patent, then the claimed trade dress feature is presumptively functional, and the plaintiff “must carry the heavy burden of showing that the feature is not functional, for instance by showing that it is merely an ornamental, incidental, or arbitrary aspect of the device.”[9]

The case is Pursen, LLC v. QVC, Inc., Great Innovations, Inc., and For Life Products, Inc., No. 1:12-cv-3997-WSD, filed 11/15/12 in the U.S. District Court for the Northern District of Georgia, Atlanta Division, assigned to U.S. District Judge William S. Duffey, Jr.

[1] Dippin’ Dots, Inc. v. Frosty Bites Distrib., Inc., 369 F.3d 1197, 1202 (11th Cir. 2004) (citations omitted).
[2] John H. Harland Co. v. Clarke Checks, Inc., 711 F.2d 966, 980 (11th Cir. 1983).
[3] Dippin’ Dots, 369 F.3d at 1202.
[4] Regarding color, see Wal-Mart Stores, Inc. v. Samara Bros., Inc., 529 U.S. 205, 211 (2000) (“Indeed, with respect to at least one category of mark -- colors -- we have held that no mark can ever be inherently distinctive.”) (citing Qualitex Co. v. Jacobson Prods. Co., 514 U.S. 159, 162-63 (1995));  see also Qualitex, 514 U.S. at 166 (secondary meaning established for green-and-gold color combination).  Regarding product configuration, see Wal-Mart, 529 U.S. at 216 (“We hold that, in an action for infringement of unregistered trade dress under § 43(a) of the Lanham Act, a product’s design is distinctive, and therefore protectible, only upon a showing of secondary meaning.”).
[5] AmBRIT, Inc. v. Kraft, Inc., 812 F.2d 1531, 1536 n.14 (11th Cir. 1986).
[6] Two Pesos, Inc. v. Taco Cabana, Inc., 505 U.S. 763, 766 n.4 (1992) (quoting Restatement (Third) of Unfair Competition § 13, Comment e (Tent. Draft No. 2, Mar. 23, 1990)).  That quote also appears in corresponding section of the final version of that Restatement, published in 1995.
[7] Gift of Learning Found., Inc. v. TGC, Inc., 329 F.3d 792, 800 (11th Cir. 2003).
[8] Qualitex, 514 U.S. at 165 (quoting Inwood Labs., Inc. v. Ives Labs., Inc., 456 U.S. 844, 850 n.10 (1982)).
[9] TrafFix Devices, Inc. v. Mktg. Displays, Inc., 532 U.S. 23, 30 (2001).

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Wednesday, November 21, 2012, 3:15 PM

Declaratory Judgment Action Filed Over Trailer Hitch Products

On November 16, 2012, Atlanta-based Tie Down, Inc. ("Tie Down") filed a declaratory judgment action against Demco, Inc. ("Demco"), based in Des Moines, Iowa, asking the Court to declare that its trailer hitch and integrated actuator products do not infringe Demco's U.S Patent No. 7,690,673 (the '673 patent), entitled "Self-Latching Ball Clamp Coupler," and that the '673 patent is invalid.  

Tie-Down's Model 600 Brake Actuator 
Tie Down and Demco are competitors that sell, among other things, trailer hitch products for boat trailers and other kinds of trailers.  Tie Down claims that Demco has alleged that Tie Down's Model 600, Model 700, and Model 800 trailer hitch and integrated actuator products infringe the ‘673 patent, and that Demco has contacted Tie Down aiming to prevent further sales of these products.  According to the complaint, in early November 2012 Kevin Ten Haken, Demco's executive vice president, contacted Tie Down and demanded that Tie Down cease offering for sale certain trailer hitch products that allegedly infringe the '673 patent.  In addition, Tie Down alleges that in February 2012 at the National Association of Trailer Manufacturers trade show, a Demco representative told a representative of a third party, Ranger Boats, that one or more of Tie Down's trailer hitch products infringed the '673 patent.  Taken together, Tie Down alleges that Demco's conduct has created a reasonable apprehension on the part of Tie Down that Demco will initiate a patent infringement suit such that there is an actual and justiciable controversy between the parties.
Tie Down seeks a declaration and judgment that it has not and does not infringe any claim of the ‘673 patent and that the claims of the ‘673 patent are invalid. Tie Down also seeks a finding that the case is exceptional and a judgment awarding Tie Down its attorneys' fees and costs under 35 U.S.C. § 285.
The case is Tie Down Inc. v. Demco, Inc., Case No. 1:12-cv-4007-SCJ, U.S. District Court for the Northern District of Georgia, Atlanta Division, and is assigned to U.S. District Judge Steve C. Jones. 
Note: Thanks to Nick Vaughan for his assistance in preparing this post.

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