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Georgia IP Litigation: September 2013

BLOGS: Georgia IP Litigation

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Thursday, September 19, 2013, 3:12 PM

Printing Industries of America Goes to Bat for Companies Targeted by CTP Innovations

As reported here, CTP Innovations recently filed patent infringement lawsuits against nine commercial printing companies.  As alluded to in our prior post, the Printing Industries of America ("PIA"), a nonprofit trade association representing the printing and graphic arts industry, issued a notice denouncing the CTP actions and vowing to form a strategy to protect its targeted members.

True to its word, on July 29, 2013 and August 2, 2013, PIA filed Petitions for Inter Partes Review asking the PTO to invalidate all of the claims of U.S. Patent Nos. 6,611,349 and 6,738,155, respectively.  Soon thereafter, joint or unopposed motions to stay litigation were filed in eight of the nine cases.[1]  In the majority of the motions, the defendants asked the Court to stay the case as to all matters, deadlines, and discovery pending reexamination of the '349 Patent and the '155 Patent, including any appeals.  CTP did not oppose a stay, but disagreed that the cases should be stayed through all appeals.  In orders issued on August 23, 2013, Chief Judge Carnes agreed with CTP and granted the motions to stay, but held that CTP may seek to lift the stay upon completion of the PTO proceedings.

PIA also issued a press release regarding the cases, in which PIA's President and CEO, Michael Makin, had strong words for CTP: “We’re not going to stand by and let a patent troll intimidate our members into paying unnecessary licensing fees.  The patents should never have been granted, since the claims were obviously based on prior patents and published documents.  I hope this action will give our members the upper hand in fighting these frivolous lawsuits and causes the patent owner to discontinue its licensing campaign.”  PIA also indicated in its press release that it has "mobilized its lobbying efforts in Congress in support of legislation to combat patent troll activity."

The cases are:

CTP Innovations, LLC v. Benson Integrated Mktg. Solutions, Inc., No. 1:13-cv-02166-JEC
CTP Innovations, LLC v. Walton Press, Inc., No. 1:13-cv-02174-JEC 
CTP Innovations, LLC v Meyers Printing Co., Inc., No. 1:13-cv-02168-JEC
CTP Innovations, LLC v. Primary Color Sys. Corp., No. 1:13-cv-02169-JEC 
CTP Innovations, LLC v. Progress Printing Co., No. 1:13-cv-02170-JEC
CTP Innovations, LLC v. Rohrer Corp., No. 1:13-cv-02171-JEC
CTP Innovations, LLC v. SleeveCo, Inc., No. 1:13-cv-02172-JEC 
CTP Innovations, LLC v. Tucker-Castleberry Printing, Inc., No. 1:13-cv-02173-JEC 
[1] CTP voluntarily dismissed one of the actions -- CTP Innovations, LLC v. Datamatx, Inc., No. 1:13-cv-02167-JEC -- without prejudice on July 22, 2013.

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Wednesday, September 18, 2013, 4:23 PM

Sequel Lawsuit over Tablet-Docking Phones Continues New Front in Smartphone Wars

ExoTablet, Ltd. (“ExoTablet”), filed suit against Overseas Electronics, Inc. (“Overseas”), on August 16, 2013, alleging infringement by the “Padfone” and “Padfone2” devices offered for sale and sold by Overseas.  The complaint mirrors the allegations of patent infringement by the “Padfone” and “Padfone2” asserted by ExoTablet’s complaint against Negri Electronics, Inc. in January of this year.  That case was reported on our blog in a report authored by Michael Cicero, which can be accessed here.

Other than the name of the defendant, the cases are virtually the same. 

The Negri Electronics case was dismissed on the same day the instant case was filed.  The new case indicates that perhaps further investigation identified a different more appropriate defendant.

The case is ExoTablet Ltd. V. Overseas Electronics, Inc., Case 1:13-cv-02740-TWT in the United States District Court for the Northern District of Georgia, Atlanta Division, assigned to Judge Thomas W. Thrash, Jr.

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Good Technology: Airwatch's Defamation Claim in Georgia was Compulsory Counterclaim in California Patent Infringement Action

On the surface this appears to be a fairly straightforward diversity removal of a superior court action to federal court based on full diversity between the parties under 28 U.S.C. § 1338.  AirWatch, LLC (“AirWatch”) is alleged to be an LLC with its principal place of business in Atlanta, Georgia, with Atlanta and Washington, D.C., shareholders, while Good Technology Corporation and Good Technology Software, Inc. (collectively “Good”) is principally based in California  However, the original Good patent action, attached as an exhibit, alleges that both Good and AirWatch are Delaware corporations.  In addition, Good asserts federal jurisdiction based upon 28 U.S.C. § 1441(a) alleging AirWatch’s entitlement to relief necessarily depends on a substantial question of federal patent law.

Good points out that the Fulton County Superior Court Action follows the patent infringement action filed by Good against AirWatch in California on November 14, 2012 – Case No. 5:12-cv-05827 (EJD) (“Patent Infringement Action”).  Good denominates a number of quoted statements from AirWatch’s state court action complaint that are taken from Good’s website and are also direct quotes of allegations made by Good in the Patent Infringement Action.  Good asserts that in order to prevail in the state court action, AirWatch must disprove statements made in the Patent Infringement Action, giving rise to the possibility of inconsistent rulings impacting patent law.  However, Good did not note that the alleged defamation includes an accusation of "cheating," whereas that term was not used in the Patent Infringement Action.

In the Patent Infringement Action Good alleges that it “has spent hundreds of millions of dollars researching, developing, and marketing [technology and products critical to the backbone and safety of smartphones and tablets] that have revolutionized and improved users’ experiences on remove devices and provide a secure environment to access the most sensitive business and personal data.”  The company owns over 75 patents – “many of which are early, highly-cited, and foundational patents.”

 According to the complaint, as the owner of the de facto standard for secure access to email and other business data on smartphones and tablets Good has intellectual property agreements with technology leaders – Research In Motion (RIM), Microsoft, and Nokia.  The Patent Infringement Action accuses AirWatch of widespread patent infringement chosen as a corporate policy instead of investing in its own product development.

The Patent Infringement Action asserted infringement of U.S. Patent Nos. 6,151,606, 7,702,322, 7,970,386, and 8,012,219.  The complaint does not delineate which patent claims are allegedly infringed or provide details of any copying activity by AirWatch.  The AirWatch response to the complaint in the Patent Infringement Action is a comprehensive assertion of denials and affirmative defenses and a reservation of the right to assert further affirmative defenses once Good further clarifies the nature of its claims.

The AirWatch Fulton County Superior Court Proceeding tells a story of AirWatch’s growing dominance in the Enterprise Mobility Management field and Good’s demise.  The state court complaint details Good’s allegedly inaccurate publications that AirWatch does not develop its own technology and, instead, copies Good’s technology.  Unlike the Good Patent Infringement Action, AirWatch provides details of Good’s inaccurate statements and contrary facts, which should be verifiable in discovery.  Overall, AirWatch pleads pages of details of a scheme by Good to mislead the public into mistrusting AirWatch and its technology allegedly because Good's outdated technology is fading in the market place.

On September 3, 2013, Good filed a motion to dismiss, stay, or transfer the proceedings.  Again, Good has refrained from providing any details backing up its claims of infringement or countering AirWatch's assertions regarding defamatory statements.  Instead, Good asserts that the false statements AirWatch asserts as being published on its website were already in its complaint and, therefore, AirWatch either was required to assert its claims as a compulsory counterclaim or has no claim because those statements are merely reporting assertions from the Patent Infringement Action.  Good asserts that AirWatch "by error or design" "missed its opportunity to raise its compulsory counterclaims.  Good's brief acknowledges that the 11th Circuit has not addressed this issue, but references one Northern District of Georgia decision and one 9th Circuit ruling and four lower court decisions from other circuits.  Good relies upon Fed. Rule Civ. Proc. 13(a)(1)(A) as requiring AirWatch to file as a compulsory counterclaim any claim that "arises out of the transaction or occurrence that is the subject matter of the opposing parties claim" - held "at the time of its service."  [Emphasis added.]

In a recent opinion, MDS (Canada) Inc. v. Rad Source Technologies, Inc., 720 F.3d 833 (reported here), the 11th Circuit held that jurisdiction over a contract claim could be retained by the 11th Circuit even if construing a patent claim was required, as long as the contract claim was not substantially related to the patent claim.  AirWatch may point out that the defamation action arose by a non-privileged publication after the Patent Infringement Action was filed.  While it appears from Good's motion that certainly the cause of action was known by the time the Answer was filed to the Patent Infringement Action, AirWatch may argue the publication goes beyond what is necessary for Good to win on patent infringement, or even willful patent infringement or enhanced damages.  Good could prevail on all its claims in the Patent Infringement Action and still lose the defamation suit, if it is allowed to proceed.  Nevertheless, Good points out factual determinations that are addressed by the pleadings in both cases.  

However, AirWatch's motion to remand filed on September 17, 2013 introduces an interesting twist to the status of the matters before the District Court.  In order to rule on Good's motion, the court must have jurisdiction.

As pointed out previously, both Good and AirWatch are Delaware corporations.  Though AirWatch concedes that its residence is determined by the residence of its members, AirWatch provides affidavits to show that prior to its filing of the superior court complaint, it membership changed to include Delaware and California residents.  This, AirWatch alleges in its remand motion, defeats Good's diversity jurisdiction.  Assuming diversity jurisdiction is legitimately defeated, there must be a federal question for jurisdiction.  AirWatch vigorously argues that its complaint was a carefully crafted state court claim.  Good's argument that such a claim is nevertheless a barred compulsory counterclaim would only be reached by the federal court if it determined that the res judicata impact of failure to state that claim in the California action was a federal question.[1]  The motion to stay faces similar jurisdictional issues.

With regard to the federal question issue, AirWatch points out that where a determination of patent infringement is not put in issue by the plaintiff, there is a "special and small category" where a federal question can still be found.  AirWatch, citing Gunn v. Minton, 133 S. Ct. 1059, 1065 (2013), states: ""[F]ederal jurisdiction over a state law claim will lie if a federal issue is (1) necessarily raised, (2) actually disputed, (3) substantial, and (4) capable of resolution in federal court without disrupting the federal-state balance approved by Congress."

AirWatch argues that intent is not a necessary element of patent infringement and therefore there is no necessity to invoke patent law in relation to its assertion that Good's allegations of intent as repeated and embellished in its publications are false.  Good may argue that willful infringement is, nevertheless, a separate federal question with an established body of federal law to be applied in resolving the issue.  If so, is there a different standard for intent for willful infringement than for the truthfulness of the statements made by Good - particularly those not merely repetitive of the complaint?  Different standards and burdens of proof (which lies on separate parties in the two actions) could result in different awards that are not, however, inconsistent.  AirWatch goes further in its motion for remand and cites both Gunn and MDS as holding the intent issue is not a substantial question of federal law.  Gunn at 1068 and MDS at 842.

This procedurally complex case could ultimately depend (after remand) on the state court determining res judicata application of Fed. Rule Civ. Proc. 13(a)(1)(A) dependent on whether the AirWatch cause of action is determined to be a federal compulsory counterclaim.

The case is AirWatch LLC v. Good Technology Corporation, and Good Technology Software, Inc., No. 1:13-cv-002870-WSD, filed 08/28/13 in the U.S. District Court for the Northern District of Georgia, Atlanta Division, assigned to U.S. District Judge William S. Duffey, Jr.

The related case is:  Good Technology Corporation and Good Technology Software, Inc. v. AirWatch LLC, No. CV12-05827(HRL), filed 11/14/12 in the U.S. District Court for the Northern District of California, San Jose Division, assigned to U.S. District Judge Edward J. Davila.
[1]  Of course, even if the matter were remanded, Good would still be free to assert in the state court the res judicata impact of AirWatch's failure to raise a compulsory counterclaim in the Patent Infringement Action.

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Monday, September 16, 2013, 9:56 AM

Special Master Toasts Brinkmann Postitions on Construction of Copreci Patent Claims Regulating Gas Flow to Grills

As reported here, Special Master Sumner C. Rosenberg undertook construing certain claims of United States Patent Nos. 7,950,384 (the ‘384 patent) and 8,282,390 (the ‘390 patent) pursuant to an Order of April 25, 2013, entered by District Judge Amy Totenberg.  Plaintiffs Coprecitec, S.L., Copreci, S. Coop., and Mandragon Components U.S.A. Co. (collectively “Copreci”) asserted 4 claims of the ‘384 patent and 12 claims of the ‘390 patent against The Brinkmann Corporation (“Brinkmann”).  The Special Master solicited and reviewed briefs and held a hearing on July 17, 2013.

The Copreci patents cover gas control valve rotational travel on gas grills which convert between liquefied petroleum gas and natural gas.  The patents share “essentially the same specification,” which addresses the need for different minimum settings for gas flow to allow a greater opening to deliver the lower pressure “lower calorific” natural gas than for liquefied petroleum gas, which requires greater limitation of flow.  Combustion heat is conventionally measured with a bomb calorimeter (example pictured below).  Thus, natural gas produces less heat than liquefied petroleum gas.
The claim construction dispute fell into two categories: (1) Whether certain terms (“first part,” “second part,” and “rotatable structure”) were “means plus function” elements under 35 U.S.C. § 112, paragraph 6 (§ 112, ¶6); and (2) How the following term should be construed: “absent the presence of the first part or the second part the regulating organ is rotatable to the second angular position.”
The Special Master set forth the claim construction principles as recited in Phillips v. AWH Corp., 415 F.3d 1303 (Fed. Cir. 2005)(en banc), stressing the importance of the ordinary and customary meaning to a person of ordinary skill in the art in question at the time of the invention.  It is presumed the claim term is read in the context of the entire patent and the court looks to sources available to the public including the prosecution history, extrinsic evidence of relevant scientific principles, of technical term definitions, and of the state of the art.  The Special Master noted the usually dispositive role of the specification cited by Phillips.[1]
Claim 1 was quoted in relevant part:
the valve having a first part that rotates simultaneously with a rotation of the control knob and that is co-operable with a second part, apart from the valve, situated on the appliance to prevent rotation of the regulating organ beyond the first angular position, absent the presence of the first part or the second part the regulating organ is rotatable to the second angular position.
‘384 patent, 6:32-38.
The Special Master noted that since the word “means” was not used in the claim language, there is a rebuttable presumption that the terms are not a “means plus function.”  No expert testimony was offered by either side, and the Report found that Brinkmann did not meet its burden.  Although the terms “first part” and “second part” did not independently connote their use in the claims in which they were used, Lighting World, Inc. v. Birchwood Lighting, Inc., 382 F.3d 1354, 1359 (Fed. Cir. 2004), held
[I]t is sufficient if the claim term is used in common parlance or by persons of skill in the pertinent art to designate structure, even if the term covers a broad class of structures and even if the term identifies the structures by their function.
Although “part” in itself is “a generic word” it is to be considered “in the context in which it appears in the claim.”  The Special Master dismissed Brinkmann’s argument that the contextual language described the “function” or “purpose” in favor of a conclusion that the contextual language expressed the “objective” of the two parts interacting together.  Importantly, the Special Master pointed out neither part could alone provide the “prevent rotation” functionality argued by Brinkmann. 
The Special Master noted an example of means plus function language provided by Copreci as illustrating that the patent was less broad and constituted a general way in which the inventive concept was physically implemented rather than the function performed.  The persuasive means plus function language suggested by Copreci was:
means for selecting whether the valve provides flow at the minimum rate of nature gas or the minimum rate of liquefied petroleum gas.
Special Master Rosenberg noted that the means plus function language would support a broader range of potential solutions, including, e.g., “a programmable servo that limits the travel of the valve based on the type of fuel being used.”  He found “that the claim language is sufficiently plain and common that one of ordinary skill in the art would understand . . . sufficient structure for the ‘first part’ and ‘second part.’”
The Special Master’s construction of “rotatable structure” as emphasized in the claim language quoted below was similar to the analysis used in construing parts.
a rotatable structure configured to rotate with the shaft, wherein the rotatable structure and the stop are configured to cooperate to prevent rotation of he regulator beyond the first angular position and to prevent rotation of the regulator to the second angular position.
Claim 7:1-5 of the ‘390 patent.
He found the rotatable structure was “configured to rotate” or “configured to cooperate” and thus set “forth the physical operation of the device in terms of the relationship and operation of the parts” rather than constituting a function. 
Brinkmann argued that the ambiguity in the phrase: “Absent the presence of the first part or the second part the regulating organ is rotatable to the second angular position” should be construed broadly – such that the first part, the second part, or both could be absent.  Although the embodiments shown in the patent showed first one part then the other being removable, neither showed both parts being removable.  The Special Master found Copreci’s argument that a claim should not be construed to exclude a preferred embodiment persuasive.  The special master construed the claim as follows to remove any ambiguity: “wherein the regulating organ may rotate to the second angular position if either the first part or the second part is not present.” 
The report does not appear to bode well for Brinkmann’s non-infringement positions.
The case is Coprecitec, S.L., et al. v. The Brinkmann Corp., No. 1:12-cv-01480-AT, Special Master’s Report on Claim Construction filed 8/20/13 in the U.S. District Court for the Northern District of Georgia, Gainesville Division, assigned to U.S. District Judge Amy Totenberg – Special Master Sumner C. Rosenberg.
[1] Vitronics Corp. v. Conceptronic, Inc., 90 F.3d 1576, 1582 (Fed. Cir. 1996).

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Thursday, September 12, 2013, 1:49 PM

Folks Alleges Jim ‘N Nick’s B B Que South, Inc.’s use of GOOD TO GO MARK Should Get Up and Go.

Folks owns and operates eleven Folks Southern Kitchen restaurants in the north Georgia after starting with one in 1978.  Folks began using the mark “GOOD TO GO” no later than 1994 according to the complaint (the “GTG Mark”).  The GTG Mark was registered on May 26, 1998, and is Registration No. 2,159,864.  Pictured below is a sample of Folks use of the GTG Mark.

 Folks licensed the GTG Mark to Taco Bell Corp. (“Taco Bell”) in 2006 and Taco Bell widely promoted the mark (in all fifty states) from 2006 through 2009 emphasizing its most successful menu item of all time – Crunchwrap® products.  See the Crunchwrap Superbowl ad at:  http://www.youtube.com/watch?v=k_sVzMWtieA

Folks has used the mark ‘FOLKS SOUTHERN KITCHEN” since 1998 and registered that mark on November 16, 1999, as Registration No. 2,293,550 (the “FSK Mark”).

The complaint alleges that defendant has infringed both the GTG Mark and the FSK mark.  Infringement of the GTG Mark attached to the complaint is depicted below:

 Folks alleges that Defendant displays the marks “in virtually identical fonts and stylizations” and for the identical services.  See complaint paragraphs 22 and 23.

Folks asserts four counts, including federal trademark infringement (15 U.S.C. §§ 1114 and 1117), federal unfair competition (15 U.S.C. § 1125(a)), and common law trademark and unfair competition.  Folks prays for preliminary and permanent injunctive relief, destruction of infringing materials, a report on compliance from defendant, defendant’s profits, damages, trebled damages, expenses and attorney fees, damages for loss of business and goodwill, and other relief as appropriate.

The case is Folks, Inc. v. Jim ‘N Nick’s Bar B Q South, Inc., No. 1:13-cv-00196-WCO, filed 08/26/13 in the U.S. District Court for the Northern District of Georgia, Gainesville Division, and has been assigned to U.S. District Judge William C. O’Kelley.

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Wednesday, September 11, 2013, 11:46 AM

Refrigiwear Seeks to Protect Trademarks and Copyrights in the United States from Encroachment by Parties Holding Limited International Rights Pursuant to Contract

The Refrigiwear, Inc. (“Refrigiwear”) complaint asserts trademark counterfeiting, trademark infringement, and unfair competition under state and federal law and copyright infringement against Sixty International S.A., Sixty Group SPA, and Sixty SPA (collectively “Sixty”) relating to Refrigiwear’s trademarks used on the insulated clothing, accessories, and protective equipment it manufactures.

Refrigiwear has used its REFRIGIWEAR Marks in commence in connection with clothing and other goods since 1954.  The complaint depicts the following designs and the dates of first use by Refrigiwear.

 The complaint puts the following registrations in issue:  0633681, 0869036, 3150046, 3221504, and 3221505.  Registrations 0633681 and 3221505 are for the word REFRIGIWEAR and the others are for the designs depicted above.  In addition, Refrigiwear obtained copyright registrations on the image depicted as Trademark Registration 0869036 (“Reggie” – Certificate of Registration No. VA0001753512) and on the image depicted as Trademark Registration 3150046 (“Reggie II” – Certificate of Registration No. VA0001763069).  The marks are collectively referred to as the “Refrigiwear Marks.”

In October 2004, Refrigiwear sold certain international rights to the Refrigiwear Marks to Cruz SRI, plus several registrations it had obtained in Europe (collectively the “European Refrigiwear Marks”).  The geographical areas were limited to Europe, Japan, and Russia.  According to the complaint, it appears Refrigiwear is not challenging that Sixty has obtained ownership or a license with regard to European Refrigiwear Marks.

The complaint targets two websites known as “sixty.net” and “refrigiwear.it” on which it alleges goods bearing Refrigiwear Marks are offered for sale and sold to customers in the United States.  A visit to the sixty.net site directs you to refrigiwear.it (when you click on the Refrigiwear logo).  When you seek to place an order on the refrigiwear.it site, you are directed to the page appearing below:

This page appears to limit shipments to certain countries, presumably those covered by the October 2004 agreement.  This is a current snapshot of the page and may, therefore, not represent the website as it appeared at the time the complaint was filed.  The complaint alleges in paragraph 30 that the website offered to ship Refrigiwear goods to the United States, Canada, or India.

Prior to filing the complaint, Refrigiwear alleges that it made demand on Sixty to cease distributing products with the Refrigiwear Marks in the United States on October 26, 2010, and again on January 21, 2011, and again to a purchaser of Sixty on October 16, 2012.  The complaint alleges that in July 2013 Sixty’s web site advertised that products bearing the Refrigiwear Marks would be shipped to the United States and Refrigiwear purchased such a product which it received in the United States on July 31, 2013.

The complaint seeks a preliminary and permanent injunction, a report on compliance, an accounting of profits, a judgment for actual damages or profits or, alternatively, statutory damages, funds for corrective advertising, and expenses and attorney fees.  Count III also seeks a trebling of profits or damages based on the nature of Sixty’s violation of 15 U.S.C. § 1117.

The case is Refrigiwear, Inc. v Sixty International S.A., Sixty Group SPA, and Sixty SPA, No. 1:13-cv-00183-WCO, filed 08/14/13 in the U.S. District Court for the Northern District of Georgia, Gainesville Division, and has been assigned to U.S. District Judge William C. O’Kelley.

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Monday, September 9, 2013, 12:10 PM

Atlanta Resident Accused of Counterfeiting and Distributing Confusingly Similar Imitations of Trademarked Chanel Handbags and Wallets

Chanel, Inc. (“Chanel”), based in New York, brings this complaint in the Northern District of Georgia asserting counterfeiting and trademark violations against Sarah Janelle, several aliases, and d/b/a’s (“Janelle”), as well as 10 Does.

Six United States Federal Trademark Registrations are alleged to have been violated:  0,626,035, 1,314,511, 1,347,677, 1,733,051, 1,734,822, and 3,025,934.  All of the registrations relate at least to handbags.  Three are for the word CHANEL and three comprise the following two symbols:

The complaint describes the marks as having been used and promoted for an extended period of time and having acquired stature as famous marks (as defined in 15 U.S.C. §1125(c)(1) and secondary meaning.

Defendants are allegedly “promoting and otherwise advertising, distributing, selling and/or offering for sale counterfeit products, including at least handbags and wallets, bearing trademarks that are exact copies of the Chanel Mark” . . . “for different quality goods.”  Defendants are further accused of misappropriating Chanel’s “advertising ideas” to the detriment and damage of Chanel.

An emergency Temporary Restaining Order was sought ex parte by Chanel and has been granted.  The website identified in the complaint (PURSE-PRINCESS.COM) now leads browsers to a docket of the papers filed in the court proceeding.

The case is Chanel, Inc. v. Sarah Jannelle, et al., No. 1:13-cv-02790-JEC, filed 08/21/13 in the U.S. District Court for the Northern District of Georgia, Atlanta Division, and has been assigned to U.S. District Chief Judge Julie E. Carnes.

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Thursday, September 5, 2013, 4:13 PM

Singer-Songwriter Lee Hutson Sues Rapper Young Jeezy Over Alleged Use of "Getting It On" Sample

Lee Hutson, Sr., Miami, Florida resident and former frontman of 1970s R&B group The Impressions, filed a complaint on August 27, 2013 in the Northern District of Georgia against Jay Jenkins, known in the music world as Young Jeezy, as well as Donald Earl Cannon and Cannon Music, LLC, the producers of the music in question.  Hutson alleges that Young Jeezy's song "Time" inappropriately incorporates the instrumental portion of his song "Getting it On," which was registered with the U.S. Copyright Office in March (composition) and April (sound recording) of 1973.

Hutson claims that his songs have been sampled by many popular artists over the past decade, including T.I., Paul Wall, Bone Thugs & Harmony, Erykah Badu, and Snoop Dogg (now Snoop Lion).  According to the complaint, although Young Jeezy's song "Time" was created in May 2010 and featured on the mixtape "Trap or Die 2," Hutson did not discover the track until February 10, 2012 when his daughter came across it on the website whosampled.com, a website which identifies sound recordings which have been reincorporated into other recordings.

Hutson alleges that the Defendants never obtained any permission or license to use his copyrighted work, never paid him for the reproduction and distribution of the work, and did not credit his work in any way.  The complaint alleges that the song is still available for purchase and download from a number of websites and venues.  Further, Hutson claims that Young Jeezy received payments from third parties for use of "Time" and that the song was used to market and promote Young Jeezy's 2011 album "TM: 103 Hustlerz Ambition."  Hutson's original song and Young Jeezy's allegedly infringing song can be heard here:


The complaint includes counts for copyright infringement and unjust enrichment, and seeks statutory and actual damages, temporary and permanent orders impounding and disposing of all allegedly infringing materials, attorneys' fees, and costs.

The case is Hutson v. Jenkins et al., No. 1:13-cv-2862-CAP, United States District Court for the Northern District of Georgia, and is assigned to Judge Charles A. Pannell, Jr.

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Homecare and its Attorneys Hammered with Rule 11 Sanctions for Pursuing Frivolous Trade Secrets Claim

A few tips worth considering:
1. Do not describe pre-filing investigation documents as "corporate espionage."
2. Do not send internal e-mails instructing employees to "rob whatever we can from any good product ideas they have."
3. Do not pursue a claim for misappropriation of trade secrets when the product of your "corporate espionage" concluded that you "have no intellectual property concerns."

These missteps and more led to a strongly-worded order from Judge Batten of the Northern District of Georgia imposing sanctions on Homecare CRM, LLC ("Homecare") and its attorneys for violation of Rule 11(b) of the Federal Rules of Civil Procedure.  The motion for sanctions was just one of many disputes in a hotly contested battle between Homecare and The Adams Group, Inc. of Middle Tennessee d/b/a PlayMaker ("PlayMaker"), two competitors in the business of developing customer-relationship management software for the home care and hospice industry.[1]  Each company has a core software product and an add-on product that allows more access to information and provides additional features.  Homecare's and PlayMaker's add-on products, "Harvest" and "TargetWatch," respectively, were the subject of the lawsuit that involved claims of trademark infringement, false advertisement, unfair competition, misappropriation of trade secrets, violation of Georgia's Uniform Deceptive Trade Practices Act and Tennessee's Consumer Protection Act, libel, slander, and tortious interference with business relations, among other things.  The trade secrets claim was the subject of the motion for sanctions.

In its original June 2012 complaint, Homecare alleged that PlayMaker "misappropriate[ed] significant portions of [Homecare's] proprietary software solutions, including the manner in which [Homecare's] software analyzes, compiles, presents and displays data on home health care referral sources, and using that information to design and develop competing software solutions."  After substantial discovery, PlayMaker filed a motion for sanctions asserting that Homecare and its attorneys violated Rule 11 because it knew or should have known that the factual allegations in support of the trade secrets claim were false, and that Homecare could not reasonably assert such a claim.  PlayMaker argued that Homecare nonetheless included the claim and throughout the litigation refused to dismiss the claim despite strong evidence of its lack of merit.  PlayMaker asked the Court to strike the misappropriation claim, to require Homecare to a monetary sanction to the Court, and to award PlayMaker its attorneys' fees and costs associated with the sanctions motion.

The Court started by noting that sanctions under Rule 11 is not something to be taken lightly or routinely granted.  The Court also remarked that while Rule 11(b) addresses the conduct of attorneys who sign a pleading, courts may nonetheless sanction a represented party for a Rule 11(b) violation, if the circumstances warrant.  The Eleventh Circuit employs a two-step inquiry when evaluating a Rule 11 motion, determining "(1) whether the party's claims are objectively frivolous; and (2) whether the person who signed the pleadings should have been aware that they were frivolous."[2]

As the Court put it, several "damning" pieces of evidence essentially sealed Homecare's fate with respect to this motion.  The most crucial among them was a matrix assembled by Homecare several months before it filed its complaint that compared the features of Homecare's Harvest product with the features of PlayMaker's TargetWatch product.  One version of the matrix uncovered during discovery included a paragraph entitled "Intellectual Property Concerns" which concluded that Homecare had "no intellectual property concerns" about TargetWatch.  Further, though Homecare insisted that PlayMaker had inappropriately accessed and misappropriated Harvest, the evidence overwhelmingly showed that it was Homecare who was clandestinely accessing TargetWatch for what it deemed "corporate espionage."  One particularly indicting internal Homecare email instructed an employee to "rob whatever we can from any good product ideas they [Playmaker] have so we can incorporate into our product ASAP."  Judge Batten said that this email made Homecare's contention that PlayMaker stole Homecare's trade secrets "farcical."

Homecare's pre-filing matrix also evidenced seven "key features" of the Harvest product that were missing in PlayMaker's TargetWatch product.  This evidence flew in the face of an allegation that PlayMaker copied or stole trade secrets from Homecare.  In addition, discovery did not support the contention that PlayMaker had access to or had in fact accessed the Harvest product.  The Court likewise rebuffed Homecare's argument that it needed an opportunity for "vigorous discovery" to support its claim, finding that (a) Homecare's belief at the time of filing was unreasonable regardless of discovery, and (b) the discovery uncovered to date contradicted Homecare's claims.

In the end, the Court found that striking the claim for misappropriation of trade secrets and ordering Homecare to reimburse PlayMaker for the fees and costs incurred in bringing the sanctions motion would be a sufficient deterrent to Homecare.  The Court then stayed the case pending mediation, which is scheduled for September 6, 2013 before Magistrate Judge E. Clayton Scofield, III.

Homecare CRM, LLC v. The Adam Group, Inc. of Middle Tennessee d/b/a PlayMaker CRM, No. 1:12-cv-1958-TCB, 2013 U.S. Dist. LEXIS 95277 (N.D. Ga. July 8, 2013).
[1] Expressing clear exasperation, the Court stated that the parties had filed a plethora of motions and engaged in numerous discovery disputes that required the Court's involvement and attention.
[2] Baker v. Alderman, 158 F.3d 516, 524 (11th Cir. 1998)

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Superiority of Triangular Geogrids over Uniaxial and Biaxial Geogrids at Issue in Action Brought by Tensar Against Former Employee

On August 6, 2013, Tensar International Corporation (“Tensar”) filed a complaint in the Northern District of Georgia asserting false advertising, Georgia Deceptive Trade Practices Act violations, and violations of Georgia statutory and common law relating to it geogrid product “TriAx®” against James Penman (“Penman”) acting individually or on behalf of Alliance Geosynthetics, LLC (“Alliance”).

Tensar participates in the “geosynthetics” industry as a full-service provider of specialty construction products.  Tensar defines geosynthetics as being a family of products for earthwork applications made generally from thermoplastic polymers.  A geogrid is an oversized screen (usually one inch or larger openings) which captures aggregate or soil particles and interlocks them to create a mechanically-stabilized earthwork, such as a roadbed.  The geogrid serves to redistribute the load and thus protect the structure from isolated failure.

According to the complaint, Tensar originated the “punched and drawn” process to manufacture geogrid products.  This process begins with the extrusion of a sheet, which is fed into a press where fine holes are punched into it.  After the punching, the sheet is stretched to open up the holes in a large heated chamber.  This process not only enlarges the holes but aligns or orients the thermoplastic polymer, greatly strengthening the product.  “Punched and drawn” grids are referred to as “integral,” because the sheet is not a composition product but is rather a modified single element.  The products are generally classified by the shapes of the holes they contain – uniaxial (oblong), biaxial (square or rectangular), or triangular.  Tensar claims that it led research in geogrid materials and obtained the first patents in the uniaxial and biaxial categories and later the triangular categories introduced in 2007.  The triangular geogrid has the advantage of isotropic strength over the one-directional strength of uniaxial geogrids and the two-directions of biaxial geogrids.

Geogrid products are evaluated on several criteria, including material properties, performance testing, and governmental acceptance and approval.  Tensar’s triangular geogrids have been accepted by many departments of transportation and have been evaluated for material properties and performance.

In January 2011 Tensar terminated Penman’s employment with the company and he subsequently became Vice President of Sales for a Tensar competitor, Alliance, which does not offer geogrids in the triangular category.  Thereafter, according to the Tensar complaint, Penman disseminated advertising and promotional materials making false and misleading claims about a Tensar triangular product in comparison with unspecified biaxial geogrid Alliance products.  Specifically, Penman authored and distributed a “Product Equivalency Statement” used to persuade consumers to select Alliance biaxial geogrid products over a Tensar triangular product using at least seven allegedly false statements.

Tensar alleges violations of the Lanham Act [15 U.S.C. § 1125(a)], the Georgia Uniform Deceptive Trade Practices Act, and adds a count for libel, and seeks punitive damages and attorneys' fees for Penman’s intentional misconduct.  Preliminary and permanent injunctive relief is also sought.

The case is Tensar International Corporation v. James Penman, No. 1:13-cv-02594-WBH, filed 08/06/13 in the U.S. District Court for the Northern District of Georgia, Atlanta Division, and has been assigned to U.S. District Judge Willis B. Hunt, Jr.

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Wednesday, September 4, 2013, 10:08 AM

Two Toiletry Trademark Infringement Assertions in Georgia Suggest a Bad Odor in the Air

Lubin, SARL, takes on Rhinoceros Boutique and related individuals and entities in Trademark Infringement Action in the Northern District of Georgia.

The verified complaint relates an intriguing story of the efforts to reestablish in the United States the brands one of the oldest active perfumeries in the world.  Pierre-Franҁois Lubin opened his first boutique “Au Bouquet de Roses” in 1798 and his fragrances became a favorite of Empress Joséphine (wife of Napoleon I).  The Parfums Lubin, as they were known,  were first imported into America around 1830 through an American subsidiary – Lubin Company.  An image of a perfume bottle containing one of the brands in issue is depicted below (visit the website at http://www.lubin-parfum.fr/ for the accompanying music and visual effects).
Unfortunately, the Lubin Company’s U.S. operation was a casualty of the Great Depression but distribution continued through a New York City distributor.  The French company’s financial condition also deteriorated until in 1998 its then German owners entered negotiations to return ownership to a French company, which ultimately occurred in 2004.  At that time Lubin, SARL, was created by the purchaser “to manage and control the production and distribution of the products bearing the Lubin Trademarks,” while the purchasing company, Strategem, SAS, retained ownership of the 16 Lubin Trademarks, including Lubin (Registration No. 3,078,477), Idole de Lubin (Registration No. 3,154,199) and Inedit de Lubin (Registration No. 3,699,189).  In January 2007 Lubin, SARL was granted exclusive worldwide licensing rights to the Lubin Trademarks with the express authorization to sue for infringement.

According to the complaint, in 2008 Lubin, SARL’s General Director met Ms. Nathalie Welch in New York and began two years of discussions relating authorizing a new distributor.  In the meantime, Lubin, SARL authorized a new distributor in New York, Europerfumes.  Thereafter, in February 2010, Lubin, SARL’s General Director agreed in principle to the formation of a wholly-owned subsidiary of Lubin, SARL to be formed in the U.S. with shares or options to be sold to Welch after the subsidiary began operations.
The only documentation for the business arrangement appears to be the early 2010 exchange of emails.  Ms. Welch reported to Lubin, SARL in March 2010 that the U.S. Subsidiary “Lubin North America, Inc.” has been set up “pursuant to [our] contract.”  Thereafter, Lubin, SARL transferred $140,000 “to cover start-up and operating expenses” and supplied inventory with a value of $230,720.60 for which the subsidiary was invoiced.

For two and one-half years thereafter Ms. Welch provided financial information when requested.  By April 2012, Ms. Welch had hired with Lubin, SARL approval Mr. William Neville as an assistant manager on monthly salary and was expecting the company to turn a profit soon.  In later 2012 Lubin, SARL was paid $17,500 for perfume orders.

Reporting discontinued in early 2013, as Ms. Welch informed Lubin, SARL that she had incorporated Lubin North America “under her own name only” and would not be sending any more information to Lubin, SARL.  Shortly thereafter Lubin, SARL revoked the trademark license and demanded that defendants “immediately cease and desist form all operations using the Lubin Trademarks and Lubin name.”  The defendants declined.

Lubin, SARL’s 18 count complaint followed.  Leading with Trademark Infringement, Lubin, SARL crafted several commonly asserted counts (contract breaches, Deceptive Trade Practices, Fraud), several less common (Dilution by Blurring and Dilution by Tarnishment, Conversion, Promissory Estoppel, Equitable Lien, Money Had and Received, Equitable Accounting, Unjust Enrichment, Constructive Trust, and Appointment of a Receiver), and one unearthed from the distant past (Quantum Valebant).  After brief research the author equates the Quantum Valebant cause of action to Money Had and Received with two twists:  the items received were not money and the amount sought is the value of the items – not their return.  Despite all the perfume Lubin, SARL shipped to the U.S. the suggestion is that the smell wafting from the transaction is not a pleasant one.

If the case should be energetically defended, it promises a most entertaining docket.  Lubin, SARL has filed for a preliminary injunction, alleging that the infringing activity is continuing and asking the Court to order it stopped.

The case is Lubin, SARL v. Lubin North America, Inc., et al., No. 1:13-cv-02696-AT.  The verified complaint was filed on 08/13/13 in the U.S. District Court for the Northern District of Georgia, Atlanta Division and has been assigned to U.S. District Judge Amy Totenberg.

Trademark Infringement Asserted in Complaint by Mr. Rooter, LLC (“Mr. Rooter”), of Waco, Texas, against Kevin Coleman (“Coleman”) of Grovetown, GA, for Using the Name “Mr. Rooter Plumbing” in marketing plumbing services around Augusta.

Operating at the other end of the toiletry spectrum from a French perfume company, Texas based Mr. Rooter initiated suit in the Augusta Division of the Southern District of Georgia on August 2, 2013, against Coleman and John Doe installers for infringement of the registered mark “MR. ROOTER” – U.S. Reg. Nos. 933,403, 1,964,249, 2,688,517, and 3,722,155.  Mr. Rooter has over 250 franchisees according to the complaint and has been using the mark continuously since at least May 1970.
The Mr. Rooter graphic of the ‘403 and ‘155 Registrations is show below.
Mr. Rooter has an authorized Franchisee in the Augusta, Georgia, area, where the infringement has allegedly occurred. 

The complaint claims that Coleman left a prior Mr. Rooter franchisee which closed on January 24, 2013, and commenced a business with the name “Mr. Flush” in mid February.  For approximately three weeks, prior to his first use of the “Mr. Flush” name, Coleman “represented himself as being affiliated or associated with” Mr. Rooter.  During this period the complaint alleges that Coleman did over $45,000 of plumbing business, used Mr. Rooter form invoices and sold “three-year ‘Mr. Rooter Advantage Plans,’” confusing the public as to the source, origin, or sponsorship of the plumbing services provided in violation of the Lanham Act [15 U.S.C. § 1114], Federal Unfair Competition and False Designation or Origin [15 U.S.C. § 1125], and state law common law and Unfair and Deceptive Trade Practices [O.C.G.A. § 10-1-370 et. seq.].
The destruction of infringing materials and an award of punitive damages are also sought.

The case is Mr. Rooter, LLC v. Kevin Coleman, et al., No. 1:13-cv-00128-JRH-BKE, filed 08/02/13 in the U.S. District Court for the Southern District of Georgia, Augusta Division, and has been assigned to U.S. District Judge J. Randall Hall.

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