Articles Posted in Breach of Contract

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Indianapolis, IN – A trade secret and breach of contract lawsuit filed in Marion County Superior Court has been removed to the Southern District of Indiana. In December, intellectual property attorneys for Angie’s List Thumbnail image for AngiesList.jpgof Indianapolis, Indiana filed a suit in Marion County Superior Court alleging Click and Improve, Inc. d/b/a, ClickAndImprove.com, Avi Zikry and Jesse Friedman of New York State breached a membership agreement by misappropriating trade secrets and committing computer fraud and abuse.

Angie’s List provides consumer reviews of different service providers. Click and Improve is a competitor website started in 2011. Zikry and Friedman are Click and Improve’s principles. The complaint alleges Zikry and Friedman became a member of Angie’s List in 2011 and signed a membership agreement that limited the ways that members could use the information on Angie’s List. The complaint alleges Zikry and Friedman essentially stole reviews and other information on Angie’s List and published the information on their competing website. The complaint states over 24,000 proprietary files were stolen. The complaint makes claims of breach of contract, tortuous interference with contract, misappropriation of trade secrets, computer fraud and abuse, computer trespass, conversion, fraud and theft. Angie’s List seeks an injunction, damages, treble damages, costs and attorney fees.

Practice Tip: Any case filed in state court that makes a federal claim can be removed to federal court upon request. Most intellectual property cases involve a federal claim under the federal patent, trademark or copyright laws. Here, however, the plaintiff made a federal claim under the Computer Fraud and Abuse Act, 18 U.S.C. § 1030.
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Indianapolis, IN – Judge Magnus-Stinson of the Southern District of Indiana has issued a partial summary judgment in a trademark infringement case. Trademark attorneys for Norwood Promotional Products, Inc. of Indianapolis, Indiana had filed a trademark infringement lawsuit in the Southern District of Indiana alleging that Collapsible Koozie.jpgKustomKoozies, LLC and Steve Liddle of Raleigh, North Carolina infringed trademark registration no.3,240,989 for the KOOZIE mark registered with the US Trademark Office. Trademark attorneys for Norwood had sued Kustom in 2005 and 2006 over the use of the term “Koozie.” The parties reached a settlement of those lawsuits that included the terms that Kustom abandon its trademark application for the mark “KUSTOM KOOZIE”and accept a royalty-free license agreement regarding Norwood’s claimed mark, “Koozie.” In 2008, Norwood alleged that Kustom was not complying with terms of the license agreement, specifically it was required that KOOZIE be in all capital letter in any use and was not displaying ® after the mark. Further it was alleged that Kustom had registered internet domain names and sold products that were not allowed by the license agreement. The defendants attempted to cure the non-compliance, but in 2009 Norwood informed Kustom that it was cancelling the license agreement due to Kustom’s non-compliance and filed this lawsuit. Both parties moved for summary judgment.

One of Kustom’s counterclaims was that Norwood’s registered trademark for “KOOZIE” should be cancelled. Kustom argued that the mark was invalid. However, the Court rejected this claim finding that Kustom was estopped from challenging the legitimacy of the KOOZIE mark because it had voluntarily gave up the right to challenge this mark in the prior settlement agreement. The Court also cited the doctrine of “licensee estoppel” that a trademark licensee is barred from challenging the validity of the licensor’s mark. The Court granted summary judgment in favor of Norwood, finding that Kustom had breached the settlement and license agreements. The issue of damages was reserved for trial. The Court, however, granted summary for Kustom, finding that it had not infringed the trademark after the license agreement was cancelled. Several issues in this case remain pending for upcoming trial.

Practice Tip: In its opinion, the Court is critical of both parties’ trademark attorneys litigation strategies. The Court notes “The advocacy in this matter has been zealous if not always effective or efficient.” Later, the Court notes “the briefs have defined the issues with a preference for litigation tactics and strategy, as opposed to clarity.” The court then noted that the parties’ briefs were not well organized and noted it was structuring its opinion in a more logical organization.
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Indianapolis, IN – Brightpoint of Indianapolis has filed a lawsuit against former executive, Mitch Black, of Miami, Florida, alleging he has breached an employment contract that included protection of Brightpoint’s trade secrets.Brightpoint.jpg The lawsuit also names Brightstar Corporation as a defendant, arguing that the company knew or should have known that Mr. Black had violated trade secret laws.

According to an Indianapolis Star news report, Mr. Black left Brightpoint in 2010 and has recently taken a new job at Brightstar Corporation of Miami, Florida. Mr. Black served as senior vice president and was in charge of North American division. The complaint states that Mr. Black had daily access to trade secrets including strategic planning. According to a report from the Indianapolis Business Journal, Mr. Black has admitted to removing confidential information such as business plans, spreadsheets, accounting information and customer lists from Brightpoint.

Practice Tip: This case makes a claim under Indiana’s Trade Secrets Act, which allows a plaintiff to seek an injunction and damages when someone has misappropriated a trade secret.

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Indianapolis, IN – Trademark attorneys for The St. Joe Company of Watersound, Florida filed a trademark infringement suit in the Southern District of Indianaalleging Epcon Community Franchising, Inc. of Dublin, Ohio, Property Group One, Ltd., Sherri Meyer, and Watercolors Owners Association, Inc. of McCordsville, Indiana, infringed trademark registration no. 2,480,515, 2,532,581, 2,626,297, 2,713,757, and 3,434,972, known as the “Watercolor Registrations” registered with the US Trademark Office.

The complaint states that St. Joe owns the Watercolor marks and uses the marks in association with a variety of goods and services, including real estate development, recreational services, hotel services and clothing.StJoeWatercolor.jpg According to the complaint, in 2009 St. Joe became aware that Epcon was planning to use WATERCOLORS to identify an Indiana real estate development and sent a letter to Epcon demanding that it cease using the WATERCOLORS name. Epcon’s franchisee, Property Group, was the entity actually using the WATERCOLORS name. The complaint states that the defendants agreed to stop using the WATERCOLOR name over a 6 month transition period. At the end of the 6 months, the defendants chose the name AQUARELLES as the new name for the Indiana real estate development project. The complaint states that AQUARELLES is French for WATERCOLORS and that the defendants have not ceased to use the name WATERCOLORS in association with the development. St. Joe’s subsequently demanded the defendants cease using the registered marks, but the defendants refused. The complaint states the defendants continue to use the Watercolors marks to this date and maintain a website at www.watercolorsinfishers.com. The complaint makes claims of trademark infringement, unfair competition, common law infringement, common law unfair competition, breach of contract and tortuous interference with a contractual relationship.

Practice Tip: An interesting issue may be the role of a real estate title insurance policy and whether the policy covers claims for trademark infringement related to the name of a real estate development. As shown by Exhibit L, the Defendant Homeowner Association’s title insurance company was engaged in efforts to negotiate a settlement.
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Indianapolis, IN – A trademark infringement lawsuit filed in Hamilton County Circuit Court has been removed to the Southern District of Indiana. Trademark lawyers for Wine & Canvas Development, LLC of Indianapolis, Indianawine&Canvas.jpg filed a recent trademark infringement suit in Hamilton County, Indiana in alleging Theodore Weisser and Christopher Muylle of Indiana, YN Canvas CA, LLC of Nevada, Art Uncorked and www.ArtUncorked.com, infringed trademarks WINE & CANVAS, COOKIES & CANVAS, PAINTING WITH A COCKTAIL TWIST, LIFE IS TOO SHORT FOR BLANK WALLS, UNLEASE YOUR INNER PICASSO, and CRUISE AND CANVAS that are registered with US Trademark Office. This case was removed to the Southern District of Indiana on December 2, 2011.

The trademarks at issue here, known as the WC Marks, are associated with Wine & Canvas’s business model. The complaint states that Weisser was an employee of Wine & Canvass and that Wiesser, on behalf of Wine & Canvas, entered a licensing and franchise negotiation with Muylle. The complaint states that Wiesser and Muylle, however, then entered certain agreements without Wine & Canvas’s knowledge and misled Wine & Canvas about the agreements. When Wine & Canvas discovered the issue, it demanded the defendants cease using the WC Marks. However, the defendants continued to sell products and services using the WC marks. The complaint further states that the defendants have threatened to “expose” the Plaintiff “to hatred, contempt, disgrace and/or ridicule or otherwise unlawfully injure” Wine & Canvas. The complaint makes claims of trademark infringement, false designation of origin, trademark dilution, sale of counterfeit items, unfair competition, breach of contract, fraud, and damages under the Indiana crime victims act. The complaint seeks a declaratory judgment, temporary and permanent injunction, damages, costs, attorney fees and for a writ of attachment.

Practice Tip: The complaint appears to largely make state law claims that come out of a failed attempt to create a California franchise of Wine & Canvas. The complaint paints a picture of the defendants essentially stealing the business ideas of Wine & Canvas and opening their own entity, rather than operating the California business as a franchise. While these contract-type disputes are typically appropriately filed in state court, the fact that the plaintiff also makes trademark infringement claims resulted in the case being removed to federal court. Under the supplemental federal jurisdiction doctrine, the district court will be able to hear both the state law and federal law claims since it would clearly have subject matter jurisdiction over the trademark claim.
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Hammond, IN – Copyright attorneys for Abandoned Property, LLC have filed a copyright infringement suit against Netcentric Publishing. LTD. and Stacie Kellams and others. The lawsuit alleges that Abandoned Property AbandonedProperty.jpgdeveloped a course called “We’re hooked on overages” that teaches people how to recover amounts owed to them by various taxing authorities. Allegedly, the Defendants “purchased a copy of Plaintiff’s phenomenal course in January, 2010, but did so under what appears to be an alias, “Luke Matthews.””The complaint then alleges that the Defendants began selling a competing Course that was “identical” to the Plaintiff’s Course for $997.00 each.

The suit alleges various causes of action including Copyright Infringement, Misappropriation of Trade Secrets, Breach of Contract, Fraudulent Inducement, Declaratory Judgment and “Vicarious Liability.”

This may be a retaliatory suit. On July 18, 2011, Netcentric Publishing’s lawyer filed a suit against Abandoned Property and Joe Kaiser in Austin, Texas asserting claims for business disparagement, defamation, fraud, and tortious interference with existing and prospective business relationships. That case is in the Western District of Texas, Cause No. 1:11-cv-602.

Practice Tip: Plaintiffs complaint appears to suffer from several defects. It does not explicitly allege that the Plaintiff owns a Copyright Registration for its work, which is a prerequisite to filing a copyright infringement suit pursuant to 17 U.S.C. § 412. Also, it will be interesting to see how the Plaintiff can contend that its Course is a “trade secret,” in view of the fact that they make their Course available for purchase over the Internet. It is also not evident how the Plaintiff expects to assert personal jurisdiction over the defendants, who are in Texas.

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Indianapolis, IN – French Lick Resorts and Casino Group has been sued in the Southern District of Indiana by Pamela Mougin for Copyright Infringement, violation of the Visual Artist Rights Act (17 USC § 106A), Breach of Contract and Unjust Enrichment. The West Baden Hotel is a historic hotel in Southern Indiana that was extremely popular in the early 1,900’s. However, it fell in to disrepair. In the 2,000’s it was restored in connection and converted into a hotel / casino in an effort to revitalize the economically depressed region.

Copyright attorneys for Ms. Mougin allege that in 2006, she was commissioned by a Colorado Interior Design firm, Worth Group, to create “an archival hand-painted canvas series of angels with topography of story for the resorts Resort Dome.jpgWest Baden Hotel, featuring angels from an existing work in the dome of the resorts hotel.”

Later, in November, 2007, Mougin claims she entered into an agreement with the hotel whereby, in exchange for $2,800 she granted permission on a “one time print agreement only” to make “large prints to be displayed at the resort West Baden Hotel.” Allegedly, in the agreement, the hotel acknowledged Mougin’s Copyrights in the Works.

Copyright lawyers for Mougin further claim that on October 13, 2008, she discovered that additional “3D relief productions of the Works were present in the upper lobby mezzanine of the hotel” and at least 48 outdoor banners hanging on light posts. She alleges she notified the French Lick Resort of Copyright Infringement that same day.

The lawsuit was filed October 11, 2011, apparently two days before the 3 year Copyright statute of limitations would have run on the copyright claim.

Practice Tip: This lawsuit raises several interesting issues, among them, the scope of Copyright in Ms. Mougin’s work, since the complaint alleges that she made her angels from copies of what was preexisting at the hotel. The complaint also raises issues of the interplay between Copyright Infringement and Breach of Contract, as Mougin admits that the hotel had rights in the Copyrighted Works, although Mougin claims the scope of that license has been exceeded. Also, it appears that Ms. Mougin’s claim for Unjust Enrichment is preempted by the Copyright Act, as its only factual basis appears to be acts that would constitute copyright Infringement. It is unclear why Worth Group is named a Defendant; as no specific actions of it are implicated.
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Indianapolis, IN – The Honorable William T. Lawrence of the Southern District of Indiana has granted a Motion to Remand to the Marion County Superior Court in a case that had been removed to federal court due to Lanham Act trademark infringement claims in the original complaint. The complaint originally filed by intellectual property attorneys for the Jackson Group LLC of Indianapolis, Indiana in the Marion County Superior Court made claims of breach of fiduciary duty, fraudulent inducement, civil conspiracy, misappropriation of trade secrets and confidential and proprietary information, tortuous interference with existing and prospective business relationships, breach of contract and trademark infringement claims under the Lanham Act against defendants Touch Point One, LLC of Indianapolis, Indiana, Convergent Resources, Inc. and Dean Weathers.

After the defendants indicated to the plaintiff that they would seek removal to federal court due to the federal Lanham Act claims, the plaintiff amended its complaint to drop the trademark infringement claim. The plaintiff’s trademark infringement claim was the Marion County court’s basis for removing the case to federal court. After filing its amended complaint, the Jackson Group sought to have the case remanded back to the Marion County Superior Court since there were no longer any federal claims. While the other defendants consented to remand, Convergent opposed remand arguing that the breach of contract claim required a determination of whether trademarks or copyrights were infringed. The court, however, found that Convergent did not demonstrate that there were any actual disputed and substantial federal issues involved in the case. Therefore, the court remanded the case to the Marion County Superior Court.

Practice Tip: As the Court wrote in its order, pursuant to 28 U.S.C. § 1441(a), removal from state court to federal court “is appropriate if the Plaintiff properly could have filed the amended complaint in federal court “as a civil action ‘arising under the Constitution, laws, or treaties of the United States.” Grable & Sons Metal Products, Inc. v. Darue Engineering & Manuf., 545 U.S. 308, 312 (2005) (quoting 28 U.S.C. § 1331).” When a an intellectual property attorney makes a federal trademark, copyright or patent infringement claim in a state court case, removal to federal court is generally appropriate.
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Indianapolis, IN – Trademark lawyers for AFC Enterprises, Inc. of Georgia, doing business as Popeye’s Chicken, filed a trademark infringement suit alleging Christopher Payne, LP&P Foods, and ten John Does of fIndiana infringed trademark registration no. 1030944 for the mark POPEYES, Thumbnail image for Popeyes.jpg1107575 POPEYE SIGN DESIGN WITH COLOR and numerous other trademarks registered with the US Trademark Office. Popeye’s has also registered copyrights for some of the items at issue here.

This dispute arises out of the operation of a Popeye’s restaurant at 6014 East 46th Street in Indianapolis utilizing the Popeye’s trademarks. According to the complaint, AFC had a franchise agreement with another individual, not a party to this suit, to operate a Popeye’s franchise at this Indianapolis location, however, that franchise agreement was terminated in August 2010. Following the termination of the franchise agreement, Mr. Payne, who operated a Popeye’s franchise in Fort Wayne with LP&P Foods, approached AFC and sought to become the franchisee at this location under a new franchise agreement. AFC declined to enter a franchise agreement with Mr. Payne. On July 31, 2011, AFC learned that Mr. Payne was operating a fried chicken restaurant at the East 46th Street location and was utilizing the Popeye’s marked items that were left behind when the franchise closed, including signs and menu boards. According to the complaint, the restaurant ceased operation on August 6, 2011 and tarps covered the signs.

Practice Tip: In Indiana, criminal conversion is defined as knowingly exerting unauthorized control over property of another person. Indiana law allows the person harmed by criminal conversion to sue for treble damages, equal to three times actual damages, as well as attorney fees and cost. If true, the allegations contained in this complaint appear to make a case for conversion, and the defendants are likely to be liable for a significant monetary sum.
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Indianapolis, IN – Judge Tanya Walton Pratt of the Southern District of Indiana denied summary judgment on what would have disposed of a dispute over the intellectual property rights to tax software used by many Indiana county governments.Nikish Picture.jpg Nikish Software Corporation of Commack, New York had sued Manatron Incorporated of Portage, Michigan, alleging breach of contract regarding intellectual property rights to the software.

This dispute arose over rights to software and related services that have been provided to over 80 Indiana county governments by Manatron and similar software and services provided by Nikish to Indiana counties. Nikish and Manatron originally worked together to develop software systems for Dauphin County, Pennsylvania and Baltimore County, Maryland. At the completion of these projects, the two companies parted ways and signed a settlement agreement whereby Nikish agreed not to disclose or reproduce any of Manatron’s confidential or proprietary information, specifically Manatron’s tax software. Thereafter, Nikish began developing its own tax software to compete with Nikish. In 2006, Nikish marketed its software to Vigo County, Indiana. When Manatron discovered Nikish’s marketing efforts in Indiana, it sent a letter to 56 Indiana counties and the Indiana Department of Local Government Finance stating that Nikish’s software was “nothing more than a misappropriated derivative copy” of Manatron’s software. In 2007, Nikish brought the present lawsuit. Manatron counterclaimed alleging copyright infringement of its software, but the court denied the copyright infringement claim in a prior ruling.

The court’s most recent ruling denied summary judgment in favor of Manatron on the breach of contract claim, allowing that claim to go forward. Judge Pratt granted summary judgment denying Nikish’s tortuous interference with contract, tortuous interference of business relationships, and defamation claims. Following the summary judgment, the breach of contract claim would have gone to a jury for ultimate disposition. However, the parties reached a settlement. The court then dismissed the case on July 15, 2011, pursuant the stipulation and settlement of the parties.
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Indiana Intellectual Property: IP Litigation, Patents, Trademarks, Copyrights
  • Seventh Circuit
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Paul B. Overhauser
Overhauser Law Offices, LLC
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Greenfield, IN 46140
Phone: 317.467.9100
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