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Georgia IP Litigation: October 2013

BLOGS: Georgia IP Litigation

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Wednesday, October 30, 2013, 12:50 PM

Video Game Controller Manufacturer Scuf Gaming Files Patent Infringement Claim Against French Competitor BURN Controllers

On September 27, 2013 Ironburg Inventions, Ltd. (“Ironburg”) of Somerset, Great Britain, and Scuf Gaming International, LLC (“Scuf Gaming”) of Atlanta, Georgia, the company through which Ironburg conducts business in the United States, filed a complaint against Playrapid EURL (“Playrapid”) of Tarascon, France and its subsidiary corporation BURN Controllers (“BURN”) also of Tarascon, France.  The complaint was filed in the United States District Court for the Northern District of Georgia and alleged patent infringement of two of Ironburg’s patents - U.S. Patent Nos. 8,480,491 (“the ‘491 patent”) and D677,892 (“the ‘892 design patent”), both entitled “GAME CONTROLLER.”

Both Scuf Gaming and BURN are in the custom video game equipment business, one aspect of which is custom game controllers.  According to the complaint, the companies have manufactured, sold, and/or offered for sale gaming controllers within the Northern District of Georgia and elsewhere.  The ‘491 patent and the ‘892 design patent issued to Ironburg on July 9, 2013 and September 25, 2012, respectively.  The complaint alleges that Scuf Gaming is the exclusive licensee of both patents in suit.

The ‘491 patent involves features that improve performance of video game controllers, such as the types of controllers used for the well-known Xbox or Playstation gaming consoles.  In short, the patent describes the invention as an improved trigger feature that allows for calibration or customization of trigger control.  By adjusting a screw, the user can set the minimum and maximum displacement of a trigger button on the gaming controller.  By appropriately setting displacements, this feature provides a number of benefits to the user such as enabling more rapid trigger button pressing or more accurate throttle or brake control.

Scuf Gaming alleges that gaming controllers manufactured and sold by BURN contain features and design that are substantially similar to features claimed by the ‘491 patent and the design claimed by the ‘892 design patent.

Because Ironburg and BURN are already involved in litigation disputes in France, the plaintiffs further allege that the infringement of the ‘491 patent and the ‘892 design patent has been willful.  The plaintiffs therefore seek treble damages under 35 U.S.C. § 284, and an order permanently enjoining the defendants from further infringement, plus costs and attorneys' fees.
          Scuf's Controller
Burn's Controller with trigger feature circled

The case is Scuf Gaming International, LLC et al v. Playrapid EURL et al No. 1:13-cv-03224-TWT, United States District Court for the Northern District of Georgia, Atlanta Division, and is assigned to Judge Thomas W. Thrash, Jr.

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Tuesday, October 22, 2013, 11:26 AM

National Photo Group Brings Copyright Suit to Protect Interests in Photos, Including Those that Contributed to Ending the Marriage of Jason Aldean and Jessica Ussery.

The complaint alleges that L&L Broadcasting, LLC (L&L), is displaying photos on its website for which National Photo Group (NPG) holds issued or pending copyrights.  NPG accuses L&L of attracting more viewers by use of the infringing photos and profiting from advertising sold to third parties.

NGP identifies its Copyright Application 1-830916271 relating to a photo of Jason Aldean getting “cozy” with Brittany Kerr, which was taken in California on September 26, 2012.  A copy of the photo obtained on the Internet appears below:

The photo was one of several which led to a “photo scandal” that ultimately contributed to Jason Aldean’s divorce.  http://www.people.com/people/article/0,,20637709,00.html and http://www.people.com/people/article/0,,20695461,00.html. 

NPG claims the rights to the photo and maintains that L&L did not license the photo but nevertheless seeks to profit from its use.  NPG asserts three counts – one for willful copyright infringement, two for contributory copyright infringement (in case the L&L website is merely hyperlinking to the infringing photos), citing, e.g., Perfect 10, Inc. v. Amazon.com, Inc., 508 F.3d 1146, 1171 (9th Cir. 2007), and three for vicarious copyright infringement as L&L is alleged to have profited from the direct infringement of others without acting to stop or limit it, citing, e.g., Perfect 10, Inc. v. Amazon.com, Inc., 508 F.3d 1146, 1171 (9th Cir. 2007).  NPG also seeks a permanent injunction.

The case is National Photo Group, LLC, No. 4:13-cv-002157-WTM-GRS, filed 9/20/13 in the U.S. District Court for the Southern District of Georgia, and has been assigned to U.S. District Judge William T. Moore, Jr.

The case parallels an earlier case:  National Photo Group, LLC v. Transworldnews, Inc., No. 1:13-cv-03095-TCB, filed 9/16/13 in the U.S. District Court for the Northern District of Georgia, assigned to  U.S. District Judge Timothy C. Batten, Sr.  (The Transworldnews case involves the same photograph but only one count of copyright infringement was alleged.)

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Friday, October 18, 2013, 3:46 PM

Penhall Company Files Complaint Against Competitor Southeast Grinding and Grooving Over "SGG" Mark

On September 12, 2013 Penhall Company (“Penhall”) of Anaheim California filed a complaint against Southeast Grinding and Grooving, LLC (“Southeast”) of Marietta, Georgia and Stefan Frame, also of Marietta, Georgia alleging trademark infringement under Section 32(1) of the Trademark Act of 1946 [15 U.S.C. § 1114(1)], unfair competition under Section 43(a) of the Trademark Act of 1946 [15 U.S.C. § 1125(a)], dilution and injury to business reputation under O.C.G.A. § 10-1-451(b), deceptive trade practices claim O.C.G.A. § 10-1-370 et seq., false advertising under O.C.G.A. § 10-1-421 et seq., violation of fair business practices under O.C.G.A. § 10-1-390 and trademark infringement and unfair competition under common law.

Southeast is a provider of concrete cutting, breaking, excavation and highway grinding services across the southeastern United States and has offices in the Atlanta and Dallas/Ft. Worth areas. Penhall provides similar services in large portions of the United States and Canada, including the Southeastern United States and has 40 locations across 17 states and Canada, including offices in the Atlanta and Dallas/Ft. Worth areas.

Penhall's grinding trucks
The controversy involves use of the letters “SGG” as a trademark for grinding and grooving services.  In short, Penhall’s complaint states that it acquired the “SGG” mark on December 7, 2012 as part of a larger transaction from Safety Grooving & Grinding, L.P. (“Safety Grooving”), another grinding and grooving service company, who had been using the mark at least since August 22, 1988.  Safety Grooving’s registration of the mark issued October 4, 2011.

According to the complaint, the problem arose when defendant Stefan Frame, who was a Penhall employee from 1999-2009, formed Southeast on January 15, 2010 and soon after began using “SGG” on equipment, marketing materials and a company web site.  The complaint also alleges Frame had contacted the then-current president of Safety Grooving during that same month, on January 8, 2010, to inquire about job opportunities.  The complaint asserts that this demonstrates notice and willfulness in use of the mark.

Southeast's trucks grinding a race track
Between its issuance in October 2011 and Penhall’s acquisition of the mark fourteen months later, Safety Grooving sent two cease and desist letters to Southeast in a back and forth about the allegedly infringing use.  The second reiterated Safety Grooving’s demands after Southeast refused to cease the allegedly infringing actions in its reply to the first letter.

The complaint also details several specific instances of alleged actual customer confusion between Penhall and Southeast as a result of the “SGG” mark being associated with the wrong company or from customers not realizing there were two distinct companies.  Penhall alleges irreparable harm as a result.  Penhall’s complaint further asserts that Southeast’s alleged use of the “SGG” mark is intentional, willful, and maliciously calculated to cause confusion, to cause mistake, or to deceive as to the affiliation, connection, or association of Southeast with Penhall as to the origin, sponsorship or approval of Southeast’s goods or services by Penhall.

These allegations form the basis of Penhall’s aforementioned claims.  Penhall seeks judgment enjoining Southeast from using the “SSG” mark, an order to destroy anything of Southeast’s that bears the “SSG” mark, a report detailing compliance with the injunction, and lost profits, treble damages, costs and attorney’s fees.

The case is Penhall Company v. Southeast Grinding and Grooving, LLC et al, case no. 1:13-cv-03052-WSD in the United States District Court for the Northern District of Georgia, Atlanta Division, and is assigned to Judge William S. Duffey, Jr.

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Thursday, October 17, 2013, 2:07 PM

Unremoveable Case Meets Exclusive Federal Jurisdiction – The Omnipotence Paradox Reaches the Northern District of Georgia

TransCardiac Therapeutics, Inc. (“TransCardiac”), as a citizen of Georgia sued agents of the State of Georgia and their agents for contractual and tort claims on August 9, 2013, in the State Court of Fulton County.  With the consent of the Georgia Tech defendants (Georgia Tech Research Corporation and Georgia Tech Foundation, Inc.) and one of three individual named defendants, Vinod H. Thourani, M.D., Emory University (“Emory”) removed the action to federal court based on authority that patent inventorship is a federal question under MCV, Inc. v. King-Seeley Thermos Co., 870 F.2d 1568, 1571 (Fed. Cir. 1989).  Emory maintains that the inventorship dispute makes federal patent law issues essential elements of Plaintiff’s claims,[1] citing Christianson v. Colt Indus. Op. Corp., 486 U.S. 800, 807-09, 160 S. Ct. 2166, 2173-74; U.S. Valves, Inc., v. Dray, 212 F.3d 1368, 1372 (Fed. Cir. 2000); Rustevader Corp. v. Cowatch, 842 F. Supp. 171, 174 (W.D. Pa. 1993).

The original state court action filed by TransCardiac spanned 60 pages of in-depth factual recitations regarding contracts, ethical standards, institutional policies, and equitable principles alleged to have been violated by defendants. Perhaps paragraph 170 on page 42 sums up the gist of the Complaint more than any other:
Beyond disdain and lack of interest in truth and law, these facts reflect a belief by the defendants that they are above the law, and a belief by the Defendants that they are above their own rules.

TransCardiac seeks to invoke the presumption of O.C.G.A. § 24-14-23 to prevent defendants from denying factual representations contained in lengthy letters sent to them to which they did not respond.
Although TransCardiac identifies the patents it holds pursuant to a release from Emory with reservations for a 2% royalty, it basically alleges that Emory and the other defendants have set up a new company – Apica Cardiovascular Technologies, Inc. (“Apica”) – using the TransCardiac intellectual property to entice investors while falsely claiming ownership of TransCardiac’s technology.
TransCardiac paints a detailed mural of facts to which it asserts the defendants have feigned ignorance[2] and remained intentionally unresponsive to the detailed information provided to them in order to produce a “‘spun’ defense . . . required in response to litigation.”  Paragraph 169.
The defendants have taken a different path, filing three separate Motions for More Definite Statement on October 1, 2013, arguing that TransCardiac’s complaint is a classic example of a “Shotgun Pleading” where “a long factual section full of immaterial and often scandalous claims … [is] incorporated in full to each count.”  See, e.g., Georgia Tech Brief in Support at page 9.  The Georgia Tech Defendants, for example, cite Burch v. Baker, Civ. Action No. CV-11-S-3770-NW, 2013 WL 24017, at *3 (N.D. Ala. January 2, 2013), for the position “when a complaint takes the form of a ‘shotgun pleading,’ the defendant is not required to submit a responsive pleading [but] is encouraged-in fact, expected-to move for a more definite statement.”  Georgia Tech Brief in Support at page 8.
It appears that, while a fairly comprehensive timeline of events with supportive documents and testimony has been assembled and presented by TransCardiac, the specific facts so described have not been differentiated as to the 9 Counts asserted of Breach of Contract Written Contract, Breach of Oral Contract, Breach of Duty of Confidential Relations, Tortious Interference with Contract, Breach of Legal Duties and Contract, Fraud, Conspiracy, False Advertising, Expenses of Litigation, and Punitive Damages.
Pending the filing of responses to the Motions for a More Definite Statement, TransCardiac has moved to remand the case to the State Court of Fulton County on October 14, 2013, based in part on the requirement that actions asserting torts against state agencies be brought in the state courts of Georgia where the damage from the tort was incurred.  TransCardiac relies on the Eleventh Amendment and specifically Principality of Monaco v. Mississippi, 292 U.S. 313, 322 (1934) (“although a case may arise under the Constitution and laws of the United States, the judicial power does not extend to it if the suit is sought to be prosecuted against a State, without her consent, by one of her own citizens”) and Gouch v. Cal. Franchise Tax Bd., 2009 U.S. Dist. LEXIS 84023 (N.D. Ga. 2009) (“[S]uits in federal court against a state or its agencies by a citizen of its own or another state are barred.”). 
As TransCardiac points out in its motion, the Attorney General of Georgia has filed an answer on behalf of two of the three individual defendants (Yoganathan and Jiminez), challenging the jurisdiction of the federal court, invoking the Georgia Tort Claims Act, and asserting sovereign immunity.
In arguing for remand, TransCardiac stressed the Four-Part test originally set forth in Grable & Sons Metal Prods. v. Darue Eng’g & Mfg., 545 U.S. 308, 313-314 (2005).  Gunn v. Minton, 133 S. Ct. 1059, 1065 (2013), summarized those elements as a federal issue if “(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.”
Thus, the District Court is presented with the irresistible force or unstoppable force paradox[3] – Georgia state courts must decide the case and federal courts must decide the case.  Or will the Court fashion a solution that neither party has sought – severing the case in Solomon-like fashion to let the state courts administer the litigation as it relates to state claims and the federal court administer the “essential” patent law aspects of the case.
The case is TransCardiac Therapeutics, Inc. v. Ajit Yoganathan, Ph.D., Jorge H. Jiminez, Ph.D., Vinod H. Thourani, M.D., Emory University, Georgia Tech Research Corporation, and Georgia Tech Foundation, Inc., No. 1:13-cv-03089-AT, removed 09/16/13 to the U.S. District Court for the Northern District of Georgia, Atlanta Division, assigned to U.S. District Judge Amy Totenberg.

[1] The 11th Circuit recently found patent law not to be an essential element in a contract case in which the Court actually construed patent claims.  See our blog post of July 29, 2013, at http://georgiaiplit.blogspot.com/2013/07/11th-circuit-retains-jurisdiction-in.html
[2] According to the complaint Defendants Thourani and Yoganathan became a member of the Transcardiac Therapeutics LLC Scientific Board and Yoganathan never resigned from that position and thus knew the TransCardiac technology intimately.
[3] A Greek mythological example of this paradox was the Teumessian fox, a huge ferocious fox, which could never be caught and which fed on the children of Thebes.  Cephalus sought to save the children by employing the magical dog, Laelaps, which was empowered by the gods to catch everything it hunted.   Zeus solved the paradox by turning both animals to stone and casting them into the stars.  Judge Totenberg may be no less creative.  More information can be found on these great and ancient creatures at http://en.wikipedia.org/wiki/Teumessian_fox or http://en.wikipedia.org/wiki/Laelaps_(mythology).

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Tuesday, October 15, 2013, 10:49 AM

New Jersey Patent Case Involving Electronic Calling Cards Transferred to Northern District of Georgia

Earlier this year, Krush Communications, LLC (Krush) of Brandon, Florida filed a complaint against Lunex Telecom, Inc. (Lunex) of Duluth, Georgia in United States District Court for the District of New Jersey alleging patent infringement, trade secret misappropriation, unfair competition, and tortious interference with business expectations.  The case was transferred to the Northern District of Georgia, Atlanta Division by an order signed by Judge Joseph E. Irenas on September 23, 2013.  
The charges in the complaint relate to pin-less prepaid long distance products and services.   Specifically, Krush is asserting rights related to a method and system of providing an electronic receipt, such as an SMS text message, that allows customers to purchase long distance minutes, 'top-off' wireless phone accounts with additional minutes, and seamlessly use the purchased long-distance minutes from a wireless phone without a personal identification number.  To make a phone call, users simply call the toll-free number found in the SMS receipt and enter the number to be reached.  
According to the complaint, Lunex launched its pin-less prepaid long distance web portal on or around July 26, 2010.  On January 12, 2011, Krush served Lunex with an infringement notice notifying Lunex that its pin-less calling card activities were believed to be covered by Krush's then pending patent application.  Krush’s patent application was published on December 30, 2010 and issued as U.S. Patent No. 8,295,805 ("the '805 patent") on October 23, 2012. Prior to issuance, Krush sent a cease and desist letter to Lunex on September 25, 2012. 
Fig. 1 of the '805 patent

In their October 5, 2012 response to the cease and desist letter, Lunex demanded a claims chart or other analysis detailing the alleged infringement.  Krush included both a chart and analysis in their October 24th response, along with a reiterated demand that Lunex cease and desist all infringing activity.  As a result of Lunex’s alleged failure to cease and desist, Krush now alleges willful infringement and irreparable harm by Lunex's ongoing acts of alleged infringement.
Regarding the charges of misappropriation of trade secrets and unfair competition, Krush alleges that Lunex approached Krush's former West Coast Manager, Mike Zarkau, to obtain trade secrets he had been introduced to while working for Krush.  Krush alleges that Mr. Zarkau revealed to Lunex trade secrets not generally known to the public that Lunex later used and copied, and that Mr. Zarkau worked with Lunex to create and launch Lunex's web portal system despite his having signed a nondisclosure agreement with Krush.  Krush seeks damages as a result of Lunex's alleged unjust enrichment and improper use of Krush's confidential information.
Finally, Krush alleges that Lunex's engaging in the use, sale, and/or distribution of a directly competing product using Krush's trade secrets and confidential information was an intentional interference with Krush's sales and distribution to the general public and therefore a tortious interference with business expectations.  As a result, Krush is seeking damages for the loss of prospective economic gain.
Krush seeks a declaration that the '805 patent is valid, has been infringed, and is being infringed by Lunex along with a declaration that Lunex misappropriated trade secrets and judgment that Lunex has engaged in unfair trade competition and tortious interference with business expectations.  Krush is also seeking a preliminary and permanent injunction enjoining Lunex from infringing the '805 patent and a permanent injunction against any further misappropriation or interference with business expectations.  Finally, Krush is seeking divestment or disgorgement of Lunex's unjust enrichment, treble damages, costs and reasonable attorneys' fees.
The case is Krush Communications, LLC. v. Lunex Telecom, Inc. No. 1:13-cv-03167-SCJ, United States District Court for the Northern District of Georgia, Atlanta Division, and is assigned to Judge Steve C. Jones.

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Thursday, October 10, 2013, 11:36 AM

YKK Corporation Files Patent Infringement Action Against Competitor Velcro USA

On August 26, 2013, YKK Corporation of Tokyo, Japan, and YKK (U.S.A.) Inc. of Marietta, Georgia (collectively, "YKK"), filed a complaint in the Middle District of Georgia against Velcro USA Inc. ("Velcro") of Manchester, New Hampshire, alleging infringement of United States Patent No. 6,720,059 (“the ’059 Patent”), “Fastener Strip Having Sealing Vertical Wall,” which relates to a fastener strip used in, for instance, foam molded products such as a cushion body used for an automobile seat.

YKK QUICKFIT® fastener strip
According to the complaint, both YKK and Velcro are in the business, among other things, of selling fastener products for use in various applications, and have sold and provided fastener products throughout the United States and in the Middle District of Georgia. Specifically at issue in the complaint are YKK's QUICKFIT® fastener strips for use in foam molded cushion bodies used for automobile seats. The complaint alleges Velcro is infringing under 35 U.S.C. §§ 271(a-c) by making, using, offering for sale, selling and/or importing in the United States fastener strips, specifically Velcro’s 4GI fastener strips, that are covered by the ’059 Patent. The complaint also alleges that Velcro did so with knowledge of or willful blindness toward the ’059 patent and with the specific intent that the 4GI fastener strips be used in a forming method as claimed by the ’059 patent.

YKK is seeking judgment that Velcro infringed the '059 Patent as well as enhanced monetary damages for the alleged willful infringement, injunctive relief enjoining further infringement, costs and reasonable attorneys' fees. The case is YKK Corporation et al. v. Velcro USA Inc., Case No. 5:13-cv-306-CAR, United States District Court for the Middle District of Georgia, Macon Division, and is assigned to Judge C. Ashley Royal.

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