What is a cease and desist letter?
A cease and desist (or demand) letter is correspondence that states or suggests that you are potentially infringing the trademark of another and demands that you stop using, or consider stopping use of, the accused mark. You should treat any such letter seriously. Before deciding how to proceed, consider your options as described below.
What are my options?
Washington, D.C. – The United States Supreme Court issued a unanimous opinion in Alice Corporation Pty. LTD v. CLS Bank International et al., Case No. 13-298. At issue was software that allows a neutral third party to ensure that all parties to a financial transaction have fully performed their obligations. The Court held that Alice Corporation’s patents should not have been issued because they (1) consisted of software created to implement an abstract idea but (2) lacked an “inventive concept” sufficient to transform the abstract idea into a patent-eligible application.
Alice Corporation owned several patents that covered a manner for mitigating “settlement risk,” i.e., the risk that one or more parties to an agreed-upon financial exchange will not satisfy their obligations. Alice Corporation’s patent claims consisted of computer software that facilitated the exchange of financial obligations between the parties. The patents-in-suit claimed (1) a method for exchanging financial obligations, (2) a computer system configured to carry out the method for exchanging obligations, and (3) a computer-readable medium containing program code for performing the method of exchanging obligations.
Respondents (collectively, “CLS Bank“), which operate a global network that facilitates currency transactions, sued Alice Corporation, arguing that the patent claims at issue were invalid, unenforceable, or not infringed. Alice Corporation counterclaimed, alleging infringement.
All of the claims were held to be ineligible for patent protection by the district court because they purported to protect to an abstract idea. The Federal Circuit, sitting en banc, affirmed, although, of the ten judges, only five agreed on the reasoning behind the holding.
The Supreme Court held for CLS Bank, affirming the Federal Circuit, and held that the patent claims were drawn to a patent-ineligible abstract idea under 35 U.S.C. § 101 and, thus, could not be patented.
In this opinion, the Court defined the Section 101 framework as having two parts. First, the court must determine if the patent claim at issue is directed toward an abstract idea. Second, it must examine the elements of the claim to determine whether it contains an “inventive concept” sufficient to transform the abstract idea into a patent-eligible application.
The Court concluded that, in the case of the software patents-in-suit, “the method claims, which merely require generic computer implementation, fail to transform [an] abstract idea into a patent-eligible invention.”
Practice Tip: Patent lawyers hoped that this much-anticipated case would clarify the extent to which software is patentable. The Supreme Court had a difficult task in drawing these lines. A ruling that allowed ideas that were overly broad and/or vague to be patented would have encouraged lawsuits by “patent trolls” and inhibited innovation by inventors who might fear that implementing their ideas would subject them to liability for patent infringement. On the other hand, a ruling that restricted the patentability of software too much could nullify thousands of existing patents and could also discourage innovation because an inventor’s resulting creation would be more difficult to patent.
What is trademark infringement?
Trademark infringement is the unauthorized use of a trademark or service mark on or in
connection with goods and/or services in a manner that is likely to cause confusion, deception, or mistake about the source of the goods and/or services.
Chicago, Illinois – California attorney Leslie S. Klinger, co-editor of multiple collections of annotated works based on Arthur Conan Doyle‘s Sherlock Holmes fiction sued Conan Doyle Estate, Ltd. under the Declaratory Judgment Act in the Northern District of Illinois seeking a declaratory judgment that he may freely use material from those Sherlock Holmes works for which copyright protection has expired. The district court held that Klinger’s use of material that was no longer subject to copyright was permissible. The Seventh Circuit affirmed.
Arthur Conan Doyle published 56 stories and 4 novels featuring the fictional character Sherlock Holmes. Of these stories, only the final 10, published between 1923 and 1927, are still protected by copyright.
Leslie Klinger, Plaintiff-Appellee, co-edited an anthology called A Study in Sherlock: Stories Inspired by the Sherlock Holmes Canon. Klinger had not sought a license from Doyle’s estate, presuming that one was not necessary, as the copyrights on most of the works in the “canon” had expired. The estate disagreed and demanded that Random House, which had agreed to publish Klinger’s book, pay $5,000 for a copyright license. Random House acquiesced and, in 2011, the anthology was published.
The trouble began when Klinger and his co-editor decided to create a sequel, “In the Company of Sherlock Holmes” and entered into negotiations with Pegasus Books, a publisher. The Doyle estate again demanded a fee for a copyright license and threatened to interfere with distribution of the book if that copyright license fee was not paid, telling Pegasus, “If you proceed instead to bring out Study in Sherlock II [the original title of “In the Company of Sherlock Holmes”] unlicensed, do not expect to see it offered for sale by Amazon, Barnes & Noble, and similar retailers. We work with those compan[ies] routinely to weed out unlicensed uses of Sherlock Holmes from their offerings, and will not hesitate to do so with your book as well.” No threat of a lawsuit for copyright infringement was explicitly made. Pegasus subsequently refused to publish the book unless and until Klinger obtained a copyright license from the Doyle estate.
Instead of purchasing a license, Klinger sued the estate seeking a declaratory judgment that he could freely use any material from the Sherlock Holmes works for which the period of copyright protection had expired.
The district court held in Klinger’s favor. The estate appealed to the Seventh Circuit on two alternative grounds. The estate first contended that the district court lacked subject matter jurisdiction under the Declaratory Judgment Act because there was no “actual case or controversy.” Second, it asserted that a copyright on a “complex” character, whose full complexity is not revealed until a later story, remains protected under copyright law until the later story falls into the public domain.
Circuit Judge Posner, writing for the court, rejected both arguments. The “case or controversy,” necessary for federal jurisdiction was demonstrated by the estate’s “twin threats” of blocking the distribution of the book and the implied threat of a copyright lawsuit against the publisher, Klinger and the book’s co-editor for copyright infringement if the book were published without a license. That such a case or controversy existed was also demonstrated by the fact that Klinger could have sued on a claim of tortious interference with advantageous business relations as a result of the estate’s intimidation of his publisher.
The court then considered the question of “whether copyright protection of a fictional character can be extended beyond the expiration of the copyright on it because the author altered the character in a subsequent work.” The estate urged the court to grant additional copyright protection in its case, arguing that characters such as Sherlock Holmes were “round” and/or “complex” and thus deserving of greater shelter under copyright law than fictional characters that were “flat” and/or “simple.”
The court could find no basis in statute or case law to support the extension of a copyright beyond its expiration. Thus, it affirmed the uncontested matter of copyright protection for the later works – namely, a right to recover for copyright infringement still existed for some portions of the Sherlock Holmes works for which the copyrights had not yet expired. However, that protection was limited to only those elements of the later Sherlock Holmes works that included “incremental additions of originality.” The remainder, the court opined, had passed into the public domain, regardless of the dimensions of the characters portrayed.
Practice Tip: The court was also unpersuaded by the Doyle estate’s argument to extend copyright law on the grounds that failure to do so would diminish authors’ incentives to create. After noting that Arthur Conan Doyle had died 84 years prior, thus rendering the argument inapplicable in the current litigation, the court noted that “extending copyright protection is a two-edged sword from the standpoint of inducing creativity, as it would reduce the incentive of subsequent authors to create derivative works (such as new versions of popular fictional characters like Holmes and Watson) by shrinking the public domain.”
What is a trademark?
A trademark is generally a word, phrase, symbol, or design, or a combination of these
elements, that identifies and distinguishes the source of one party’s goods from those of others. A service mark is the same as a trademark except that it identifies and distinguishes the source of a service rather than goods. The terms “trademark” or “mark” are commonly used to refer to both trademarks and service marks. Although federal registration of a mark is not mandatory, it has several advantages, including notice to the public of the registrant’s claim of ownership of the mark, a legal presumption of ownership nationwide, and the exclusive right to use the mark on or in connection with the goods and/or services listed in the registration.
Indianapolis, Indiana – Pennsylvania trade secret attorneys, in conjunction with Indiana co-counsel, for Distributor Service, Incorporated (“DSI”) of Pennsylvania sued in the Southern District of Indiana alleging that Rusty J. Stevenson (“Stevenson”) of Indiana and Rugby IPD Corp. d/b/a Rugby Architectural Building Products (“Rugby”) of New Hampshire violated an agreement containing non-competition, non-solicitation, and non-disclosure provisions. In the instant order, the court ruled on motions for summary judgment filed by DSI and Stevenson.
Plaintiff DSI is a seller and distributor of wholesale specialty building products to businesses in the Middle Atlantic and Midwest regions of the country. It has eight locations in Indiana, Pennsylvania, Ohio, Kentucky, and Michigan. Defendant Rugby is also in the business of selling and distributing wholesale specialty building products. It does so throughout the United States, including in Indiana, and is a direct competitor of DSI. Stevenson, formerly an employee of DSI, is currently employed by Rugby.
DSI hired Stevenson in October 1999 to be a salesman. When he started, Stevenson had no sales experience in the specialty-building-products industry or any related industry. DSI indicated that it had invested significant time and resources to provide specialized training to Stevenson. In April 2005, DSI promoted Stevenson to the position of sales manager. Later, as part of his employment, Stevenson signed a Confidentiality and Non-Competition Agreement with DSI. This agreement contained provisions for Non-Competition/Non-Solicitation and Non-Disclosure of Confidential Information.
During his employment with DSI, Stevenson had access to information that DSI considered to be protectable as intellectual property assets. This information included all of DSI’s “Customer Lists,” “Customer Product Preferences,” “Competitive Pricing,” and “Competitive Cost Structure” for DSI’s Indianapolis branch. DSI asserted that this information was “the cornerstone of DSI’s ability to compete effectively in the specialty building products industry in Indiana,” and that the information “derives economic value from not being generally known to other persons who can obtain economic value from its disclosure or use.”
In August 2013, Mr. Stevenson resigned from DSI to take a position as the general manager of Rugby’s Indianapolis branch. Shortly thereafter, DSI sued Rugby and Stevenson seeking, inter alia, damages and injunctive relief. DSI asserted claims for: (1) breach of the Non-Compete Provision; (2) breach of the Non-Solicitation Provision; (3) breach of the Non-Disclosure Provision; (4) recovery of attorneys’ fees and expenses under the Agreement; (5) misappropriation of trade secrets; (6) breach of duty of loyalty, and (7) tortious interference.
In this opinion, District Judge Jane Magnus-Stinson reviewed cross-motions for summary judgment filed by DSI and Stevenson. DSI’s motion was denied in its entirety. Stevenson’s motion for summary judgment was granted as to Count 1, breach of the Non-Compete Provision, and Count 2, breach of the Non-Solicitation Provision. Stevenson’s motion for summary judgment on Count 3, breach of the Non-Disclosure Provision, was denied.
The court began by discussing the standard for upholding the provisions at issue. It is a longstanding principle in Indiana that covenants that restrict a person’s employment opportunities are strongly disfavored as a restraint of trade. To be enforceable, such restraints, such as a noncompetition agreement, must be reasonable. The court noted that it, while in many other contexts reasonableness was a question of fact, the reasonableness of a noncompetition agreement was a question of law and, thus, was capable of evaluation in response to the parties’ motions for summary judgment.
The first hurdle for DSI was to show that the agreement protected a legitimate interest, defined as “an advantage possessed by an employer, the use of which by the employee after the end of the employment relationship would make it unfair to allow the employee to compete with the former employer.” Indiana law provides that goodwill, including “secret or confidential information such as the names and addresses of customers and the advantage acquired through representative contact,” is a legitimate protectable interest. DSI argued that it had a legitimate interest in protecting the customer relationships that Stevenson had developed during his years working for DSI as well as the information embodied in DSI’s Customer Lists, Customer Product Preferences, Competitive Pricing, and Competitive Cost Structure, to which Stevenson had been permitted access. The court agreed that this was a protectable interest.
DSI next had to establish that Non-Compete Provision of the agreement was “reasonable in scope as to the time, activity, and geographic area restricted.” DSI argued that the provision was limited merely to restricting Stevenson from engaging in competitive business activity. The court was not convinced. Instead, it noted that, as drafted, the “competitive business activity” restriction applied to the activities of Stevenson’s new employer, not to Stevenson himself. Thus, because Rugby engaged in business activities that were competitive to DSI, the agreement would de facto prohibit Stevenson from working for Rugby in any capacity, despite that no “in-any-capacity” language was explicitly applied to Stevenson in the agreement. “For example,” the court explained, “[under DSI’s agreement,] Mr. Stevenson could not serve lunch in Rugby’s cafeteria or change light bulbs in Rugby’s offices because Rugby competes with DSI.” The court concluded that, as a result, the Non-Compete Provision was overly broad and unreasonable.
Regarding this provision, DSI also contended that alleging and proving that the employee had been provided with trade secrets could render an otherwise unenforceable non-competition clause enforceable. The court rejected this argument.
The court also granted summary judgment for Stevenson on the Non-Solicitation Provision. This provision attempted to restrict Stevenson’s ability to solicit “any customer or prospective customer of [DSI] with which [Stevenson] communicated while employed by [DSI].” The court found this restriction to be vague as to “prospective customer” as well as overbroad and unreasonable in scope.
Finally, the court declined to rule on the Non-Disclosure Provision on summary judgment. It held that, to evaluate whether this provision had been violated, it would need to determine whether “customer lists” and “the identities of key personnel and the requirements of the customers of [DSI]” were confidential. As the evidence submitted regarding confidentiality was “vague, generalized, and conflicting,” the court found that a genuine issue of material fact existed with regard to the Non-Disclosure Provision and, consequently, partial summary judgment in favor of either party was inappropriate on the record before it.
Practice Tip #1: Summary judgment in federal court is guided by Rule 56 of the Federal Rules of Civil Procedure. A motion for summary judgment asks the court to find that a trial on a particular issue or issues is unnecessary because there is no genuine dispute as to any material fact and, instead, the movant is entitled to judgment as a matter of law. The moving party is entitled to summary judgment only if no reasonable fact-finder could return a verdict for the non-moving party.
Practice Tip 2: In a similar case, decided earlier this year, the Indiana Court of Appeals affirmed the trial court’s ruling that the noncompetition agreement binding an ex-employee of the plaintiff was overly broad and, thus, unenforceable.
WASHINGTON, D.C. – The USPTO will offer a forum, presented both on-site and webcast, for stakeholders seeking patent protection in the cybersecurity and network-security sectors.
The U.S. Department of Commerce‘s United States Patent and Trademark Office (“USPTO”) will host its first Cybersecurity Partnership Meeting tomorrow, Friday, November 14, 2014, in Menlo Park, California. The meeting will serve as a collaborative forum for stakeholders seeking patent protection in the cybersecurity and network security sectors to share ideas, experiences, and insights with USPTO staff.
For this inaugural event, the USPTO has partnered with the National Institute of Standards and Technology (“NIST”), whose experts will present information on their voluntary Framework for Improving Critical Infrastructure Cybersecurity. The Framework, created through collaboration between industry and government, consists of standards, guidelines, and practices to promote the protection of critical infrastructure. USPTO staff will also discuss cybersecurity patent initiatives, key computer security patent application statistics, and examination guidelines for patent eligible subject matter following the Alice Corp. v. CLS Bank Supreme Court decision. In addition to the presentations from NIST and the USPTO, several key stakeholders will present their views on topics focusing on the intersection of intellectual property and cybersecurity.
The U.S. Trademark Office issued the following 165 trademark registrations to persons and businesses in Indiana in October 2014 based on applications filed by Indiana trademark attorneys:
| Reg. No. | Word Mark | Click to View |
| 4616762 | CUE CANDY | VIEW |
| 4630232 | BERRY ESSENTIALS | VIEW |
| 4628883 | IP BAR | VIEW |
| 4630201 | MEDAPPAREL | VIEW |
| 4628574 | CERA | VIEW |
| 4628564 | INTERPRO | VIEW |
| 4628555 | ALBERT’S | VIEW |
| 4628480 | HOME PRO | VIEW |
| 4628274 | CAMPERSWEATHER.COM | VIEW |
| 4628192 | TRAIL RATIONS PURE HONEY | VIEW |
South Bend, Indiana – Indiana patent lawyers for Lippert Components Manufacturing, Inc. of Elkhart Indiana sued in the Northern District of Indiana alleging that MOR/ryde International Inc. and MOR/ryde Inc., both of which are also from Elkhart Indiana, infringed “Equalizer for Suspension System,” Patent Nos. 7,918,478 and 7,296,821, which have been issued by the U.S. Patent Office.
At issue in this litigation are U.S. Patent Nos. 7,918,478 (“the ‘478 Patent”) and 7,296,821 (“the ‘821 Patent”). These inventions pertain to “equalizers” that dampen vibrations for recreational vehicle trailers. Plaintiff Lippert contends that Defendants MOR/ryde International Inc. and MOR/ryde Inc. (collectively, “MOR/ryde”) have infringed, and continue to infringe, these patents. The accused products include MOR/ryde’s CRE/3000 and SRE/4000 equalizer products.
Lippert states that MOR/ryde knew of Lippert’s intellectual property rights in the ‘478 Patent and that, despite this knowledge, MOR/ryde infringed at least claim 1 of that patent. Lippert also asserts that MOR/ryde induced infringement by others as well as contributed to others’ infringement of at least claim 15 of the ‘478 Patent.
Lippert makes similar allegations regarding its ‘821 Patent, stating that MOR/ryde knew of Lippert’s patents rights in that patent and that MOR/ryde nonetheless infringed at least claim 1. Finally, Lippert contends that MOR/ryde induced infringement by others and contributed to others’ infringement of at least claim 14 of the ‘821 Patent.
In this Indiana patent infringement lawsuit, the following claims are asserted:
• Count I: ‘478 Patent Infringement
• Count II: ‘821 Patent Infringement
Lippert asserts that Defendants’ acts have been willful and contend that those actions render this an “exceptional case” as that term is defined in 35 U.S.C. §285.
Lippert asks, via its Indiana patent counsel, that the court:
• Preliminarily and permanently enjoin both MOR/ryde entities and their agents from infringing, or from contributing to or inducing others to infringe, Lippert’s ‘478 Patent and ‘821 Patent;
• Award Lippert monetary damages adequate to compensate Lippert for past infringement consistent with 35 U.S.C. § 284, up to and including treble the amount of actual damages assessed, together with costs and prejudgment interest;
• Award Lippert its reasonable attorneys’ fees and costs pursuant to 35 U.S.C. §285; and
• Order MOR/ryde to provide notice to their customers of the infringing systems and of MOR/ryde’s unlawful acts.
Practice Tip #1: A court may award increased damages for willful infringement. These extra damages are known as punitive damages. An award of punitive damages, up to and including a trebling of damages, is appropriate when an infringer has acted in wanton disregard of the patentee’s intellectual property rights. In determining whether the infringing behavior supports increased damages, the court will consider the “totality of the circumstances.”
Potential exposure for increased damages may be reduced by seeking – and acting on – timely advice from a competent patent lawyer. In contrast, the failure to seek and heed such advice may increase the probability that the court will find that the defendants have acted willfully.
Practice Tip #2: Lippert is not new to patent litigation. In fact, it has sued various competitors for patent infringement in 2003, 2008, 2012 and again in 2013. Lippert dropped the first three lawsuits. While the 2003 litigation lasted about a year and a half, the infringement actions filed in 2008 and 2012 were dropped only two months after the complaints were filed. The 2013 patent infringement lawsuit is ongoing.
Practice Tip #3: Under U.S. patent law, a trial court may award attorneys’ fees in cases of patent infringement litigation that it deems “exceptional.” Two recent U.S. Supreme Court rulings revisited how “exceptional” is defined. In part as a result of these rulings, plaintiffs filing questionable patent infringement lawsuits must exercise greater caution, as trial judges will now have greater latitude to award attorneys’ fees – including awarding fees to prevailing defendants – in those cases in which they determine that the conduct of the losing party “stands out from others.”
The U.S. Patent Office issued the following 165 patent registrations to persons and businesses in Indiana in October 2014, based on applications filed by Indiana patent attorneys:
| Patent No. | Title | |
| 8874256 | Monitoring and control system for commodity loading | |
| 8872399 | Stator winding assembly and method | |
| 8872369 | Starter machine system and method | |
| 8872154 | Field effect transistor fabrication from carbon nanotubes | |
| 8872102 | Ion mobility spectrometer and method of operating same | |
| 8871943 | Process for the preparation of 4-amino-5-fluoro-3-halo-6-(substituted)picolinates | |
| 8871727 | Ectoparasiticidal methods and formulations |
