Indiana Intellectual Property Law News

May 19, 2014

Indiana Copyright Litigation – Another John Doe Sued by Malibu Media on Allegations of Copyright Infringement

Indianapolis, Indiana – A copyright attorney for Malibu Media, LLC d/b/a X-Art.com of Los Angeles, California has sued alleging that an unidentified Indiana resident, “John Doe,” infringed numerous of its copyrighted works in the Southern District of Indiana between July 2012 and May 2014.

The “John Doe” defendant in this copyright infringement lawsuit allegedly used the BitTorrent file-sharing protocol to illegally download, copy and distribute elements of various works of Malibu Media’s copyrighted material. Malibu Media has also claimed that the defendant is a “persistent online infringer.” It claims that “John Doe” has infringed 43 separate copyrighted works owned by Malibu Media. Of these 43 works, 42 have been registered by the U.S. Copyright Office. One registration remains pending.

Malibu Media seeks a permanent injunction against infringing activities; an order by the court to remove infringing materials from all computers of the defendant; an award of statutory damages pursuant to 17 U.S.C. § 504(a) and (c) and reasonable attorneys’ fees and costs.

Practice Tip #1: The BitTorrent protocol is a decentralized method that allows users to distribute data via the Internet, and has become an extremely popular method for unlawful copying, reproducing and distributing files in violation of the copyright laws. While the copyright infringements committed with BitTorrent once consisted mostly of music copyright violations, the adult entertainment industry has increasingly been filing suit against infringers who have used BitTorrent-based technology.

Practice Tip #2: Malibu Media, LLC is represented by Paul Nicoletti, one of the country’s most notorious “copyright troll” attorneys. In addition to filing suits on behalf of Malibu Media, LLC, he has also sued hundreds of defendants on behalf of copyright trolls Patrick Collins, Inc. and TCYK, LLC. (Search for these company names on this site to find articles about those other suits, or visit http://fightcopyrighttrolls.com/or www.dietrolldie.com.)

Practice Tip #3: Overhauser Law Offices, the publisher of this website, has represented several hundred persons and businesses regarding copyright infringement and similar matters.

May 16, 2014

Indiana Trademark Law: Seventh Circuit Holds Indiana Court Lacked Personal Jurisdiction Over RAP4

By Overhauser Law Offices, LLC

Chicago, Illinois – Indiana trademark attorney Paul B. Overhauser, on behalf of K.T. Tran and Real Action Paintball, Inc., a California corporation (collectively “RAP4”), argued before the United States Court of Appeals for the Seventh Circuit that the trademark infringement suit brought in the Northern District of Indiana by Advanced Tactical Ordnance Systems, LLC, an Indiana corporation (“ATO”), was not properly before the Indiana court, as it lacked personal jurisdiction over RAP4. The Seventh Circuit agreed and instructed the district court to dismiss the complaint.

RAP4 and ATO are competitors in the “irritant projectile” market. Unlike the more familiar game of paintball, in which a paint-filled sphere is shot at opponents as part of a war game, these irritant projectiles are used by the police and military to intervene in hostile situations where lethal force is unnecessary. While paintballs are filled with paint, irritant projectiles use capsaicin, the active ingredient in pepper spray. Irritant projectiles, thus, allow law enforcement personnel to use less-than-lethal force from a distance.

Among the many issues in this lawsuit, including assertions by ATO of trade-dress infringement, unfair competition and misappropriation of trade secrets, were allegations that RAP4 had infringed the trademarked term “PEPPERBALL,” to which ATO claimed ownership. That trademark, Registration No. 2716025, was issued in 1999 by the U.S. Trademark Office to a non-party to this suit.

The trouble began when another company, non-party PepperBall Technologies, Inc. (“PTI”), began to have financial problems. PTI had also been a competitor in the irritant-projectile market. To address its difficulties, PTI held a foreclosure sale, the validity of which was hotly contested. ATO claimed that it had purchased PTI’s trademarks – including “PEPPERBALL” – and other property during this foreclosure sale.

During the time that PTI ceased its operations and was attempting to convey its assets, RAP4 was contacted by an executive of non-party APON, a company which had manufactured some of PTI’s irritant projectiles. He asked if RAP4 was interested in acquiring irritant projectiles from APON.

RAP4 agreed to purchase irritant projectiles from APON. After having negotiated this access to APON’s machinery, recipes, and materials – which had had at one time been used by PepperBall Technologies Inc. – RAP4 announced this fact to the people on its e-mail list. Specifically, it stated in its e-mail that it had acquired access to, “machinery, recipes, and materials once used by PepperBall Technologies Inc.” It was this language to which ATO, which claimed to be the successor in interest to PTI, particularly objected.

ATO sent a cease-and-desist letter to RAP4. In response, RAP4 added a disclaimer that it was not affiliated with PTI. ATO then sued in the Northern District of Indiana. It claimed several different theories of recovery, including intentional violations of the Lanham Act, 15 U.S.C. § 1111 et seq., common law trademark infringement and unfair competition, trade dress infringement, and misappropriation of trade secrets.

Of particular interest to the Seventh Circuit in addressing this Indiana trademark litigation was the issue of personal jurisdiction over RAP4 in the Northern District of Indiana. RAP4 contested that such jurisdiction over it was lacking. ATO countered that RAP4 had sufficient contacts, including a “blast e-mail” announcement from RAP4 that would suffice for jurisdiction in Indiana, stating that “many [RAP4 customers] are located here in the state of Illinois. I mean, state of Indiana.” It also contended that RAP4 regularly e-mailed customers or potential customers from all over the United States, including Indiana, and that RAP4 had made at least one sale to an Indiana resident.

ATO conceded that it lacked general jurisdiction. Thus, the Seventh Circuit turned to an analysis of specific jurisdiction. “For a State to exercise jurisdiction consistent with due process, the defendant’s suit-related conduct must create a substantial connection with the forum State,” noted the appellate court. Moreover, the relation between the defendant and the forum “must arise out of contacts that the ‘defendant himself’ creates with the forum.”

In determining that personal jurisdiction existed, the Indiana district court had relied on several facts: “first, [RAP4] fulfilled several orders of the allegedly infringing projectiles for purchasers in Indiana; second, it knew that Advanced Tactical was an Indiana company and could foresee that the misleading emails and sales would harm Advanced Tactical in Indiana; third, it sent at least two misleading email blasts to a list that included Indiana residents; fourth, it had an interactive website available to residents of Indiana; and finally, it put customers on its email list when they made a purchase, thereby giving the company some economic advantage.”

The Seventh Circuit held that these facts were insufficient to support specific jurisdiction. The only Indiana sales that would have been relevant were those that related to RAP4’s allegedly unlawful activity. ATO failed to meet its burden of proof of any such Indiana sales. Similarly, the court held that any effects that were purportedly felt in Indiana by ATO did not support specific jurisdiction. Instead, the relation between RAP4 and the Indiana forum “must arise out of contacts that the defendant himself creates with the forum State.”

Further, neither RAP4’s e-mail communications nor its website were held to create specific jurisdiction. If such contacts were sufficient, the court held, there would be no limiting principle on personal jurisdiction and a plaintiff could sue almost any defendant with an Internet presence or which utilized e-mail in almost any forum in the United States or the world. To find jurisdiction on such vanishingly small contacts would offend the long-held and traditional “notions of fair play and substantial justice.”

The Seventh Circuit remanded the case to the Indiana district court with instructions to vacate the judgment and dismiss the complaint for lack of personal jurisdiction.

Practice Tip #1: RAP4’s references to “Pepperball Technologies, Inc.” could not as a matter of law constitute trademark infringement, counterfeiting or false advertising. Instead, RAP4’s use of its competitor’s name is a merely a wholly permissible nominative use of that mark. As a matter of law, a “nominative use of a mark – where the only word reasonably available to describe a particular thing is pressed into service – lies outside the strictures of trademark law.”

Practice Tip #2: Personal jurisdiction is an essential element of federal court jurisdiction, without which the court is powerless to adjudicate the matter before it. However, a defendant’s argument that personal jurisdiction does not exist can easily be waived inadvertently by the incautious litigant. In this case, an evidentiary hearing regarding personal jurisdiction was conducted in December 2012. It was only by careful preservation of this argument by trademark counsel for RAP4 while litigating in the district court that the appellate court was able to hear RAP4’s claim and reverse the district court.

Practice Tip #3: This case was successfully argued before the Seventh Circuit by Paul B. Overhauser, Managing Partner of Overhauser Law Offices.

May 15, 2014

Indiana Copyright Litigation – Malibu Media Sues Alleging Infringement of 43 Copyrighted Works

By Overhauser Law Offices, LLC

Indianapolis, Indiana – A copyright attorney for Malibu Media, LLC of Los Angeles, California d/b/a X-Art.com filed a copyright infringement lawsuit in the Southern District of Indiana alleging that an anonymous defendant (“John Doe”), asserted to be an Indiana resident, infringed 43 copyrighted works to which Malibu Media claims ownership.

Malibu Media contends that infringement by John Doe of the works, which include multiple pornographic movies, began on September 14, 2013. Currently, the defendant is identifiable by Malibu Media only by his or her internet protocol address (“IP address”). Malibu Media asserts that it used “geolocation” technology to ensure that the anonymous defendant’s alleged acts of copyright infringement occurred using an IP address that could be traced to a physical address within Indiana.

Malibu Media has accused the defendant of a single count of “Direct Infringement” encompassing all 43 copyrighted works. It seeks a permanent injunction against infringing activities; an order by the court to remove infringing materials from all computers of the defendant; an award of statutory damages pursuant to 17 U.S.C. § 504(a) and (c) and reasonable attorneys’ fees and costs.

Practice Tip:

It has been estimated that over 200,000 users of various peer-to-peer file-sharing protocols, usually users of BitTorrent, have been sued for copyright infringement. Instead of a thorough investigation, followed by a lawsuit, these plaintiffs — usually holders of a copyright to a work of adult entertainment — gather the IP addresses of many potential/presumed infringers and then sue multiple defendants.

These suits used to involve tens, hundreds or even thousands of defendants joined in a single suit. The problem of these cases of mass joinder of largely unrelated defendants became sufficiently widespread that it garnered attention from mainstream press (see, e.g., here).

The problem also caused considerable strain on the federal judiciary, leading one judge to deny joinder as serving no legitimate purpose in such cases once IPSs have been put on notice to preserve identifying information for particular IP addresses and to opine that it is “difficult to even imagine the extraordinary amount of time federal judges have spent on these cases.” Many other courts also denied joinder, often on the theory that, while doing so does not solve the problem of trolling for copyright damages within the federal judiciary it, at least, makes pursuing such abusive litigation much less profitable.

As a result of such rulings, copyright attorneys such as Paul Nicoletti have modified their practices and now have shifted to filing more single-defendant copyright infringement complaints. While this may solve the earlier problem of mass misjoinder, many other contentious issues inherent in copyright trolling – including proper identification of the alleged infringer – remain.

May 14, 2014

Internet Policy Task Force to Host Series of Roundtables on Copyright Internet Policy Topics

By Overhauser Law Offices, LLC

Washington, D.C. – Public meetings called for in U.S. Commerce Department’s Green Paper on “Copyright Policy, Creativity, and Innovation in the Digital Economy” will be held in Tennessee, Massachusetts and California.

The U.S. Department of Commerce’s Internet Policy Task Force will host roundtable discussions in cities around the country on several copyright Internet policy topics, as part of the work envisioned in the Green Paper. The purpose of the roundtables is to engage further with members of the public on the following issues: (1) the legal framework for the creation of remixes; (2) the relevance and scope of the first sale doctrine in the digital environment; and (3) the appropriate calibration of statutory damages in the contexts of individual file sharers and of secondary liability for large-scale infringement.

The roundtables, which will be led by the U.S. Patent and Trademark Office (“USPTO”) and the National Telecommunications and Information Administration (NTIA), will be held in Nashville, Tennessee on May 21, 2014, Cambridge, Massachusetts on June 25, 2014, Los Angeles, California on July 29, 2014, and Berkeley, California on July 30, 2014.

May 12, 2014

Malibu Media Sues “John Doe” for Copyright Infringement

By Overhauser Law Offices, LLC

Indianapolis, Indiana – Malibu Media, LLC d/b/a X-Art.com of Los Angeles, California has sued an unidentified Indiana resident, “John Doe,” for copyright infringement in the Southern District of Indiana.

Copyright lawyer Paul Nicoletti is again in federal court on behalf of Malibu Media. The “John Doe” defendant in this copyright infringement lawsuit allegedly used the BitTorrent file-sharing protocol to illegally download, copy and distribute elements of various works of Malibu Media’s copyrighted material. Malibu Media has also claimed that the defendant is a “persistent online infringer.” It claims that “John Doe” has infringed 67 separate copyrighted works owned by Malibu Media.

Malibu Media seeks a permanent injunction against infringing activities; an order by the court to remove infringing materials from all computers of the defendant; an award of statutory damages pursuant to 17 U.S.C. § 504(a) and (c) and reasonable attorneys’ fees and costs.

Practice Tip #1:

The actions of companies such as Patrick Collins and Malibu Media have been called “extortionate” and, in at least one case, a class action suit has been filed against these “copyright trolls.”

The issue of intellectual property “trolls” has also caught the attention of several U.S. lawmakers, including Senator Charles Schumer. Senator Schumer has proposed legislation wherein the U.S. Patent and Trademark Office would review patent infringement suits before they could be filed in court. Of course, such legislation is not directly relevant to actions sounding in copyright, such as the multiplicity of lawsuits filed by Malibu Media and Patrick Collins. It may, however, sound a warning bell that tolerance of the questionable activities of intellectual-property trolls of all varieties is wearing thin.

Practice Tip #2:

We have previously blogged about Malibu Media’s previous attempts to sue unrelated defendants en masse (see also here), as well as some responses of various Indiana courts (see also here and here).

May 8, 2014

USPTO Creates New Office of International Patent Cooperation

By Overhauser Law Offices, LLC

WASHINGTON, D.C. – The U.S. Department of Commerce’s United States Patent and Trademark Office (“USPTO”) recently announced the creation of a new Office of International Patent Cooperation (“OIPC”). The OIPC will be led by Mark Powell who will serve as USPTO’s first Deputy Commissioner for International Patent Cooperation. Deputy Commissioner Powell will report directly to the Commissioner for Patents Margaret (Peggy) Focarino. The establishment of the OIPC reflects USPTO’s strong commitment to work with global stakeholders and intellectual property (“IP”) offices to develop means to increase quality and create new efficiencies within the complex processes of international patent rights acquisition, and its commitment toward global patent harmonization, which both protects America’s ideas and makes it easier to do business abroad.

“The establishment of the Office of International Patent Cooperation reflects the USPTO’s strong commitment to the IP community in improving the international patent system,” said Deputy Under Secretary of Commerce for Intellectual Property and Deputy Director of the USPTO Michelle Lee. “It will allow us to increase certainty of IP rights while reducing costs for our stakeholders and moving towards a harmonized patent system.”

While the USPTO has been effective in carrying out its international mission through such programs as the Patent Prosecution Highway, the Global Patent Search Network, the Cooperative Patent Classification system, and the new Global Dossier Initiative, creation of the new office will enable USPTO to focus dedicated resources to better implement its international patent cooperation efforts. The main focus of the office, working in concert with the Office of Policy and International Affairs and the Office of the Chief Information Officer, is to provide optimized business process solutions to the international patent examination system for examiners and external stakeholders.

May 7, 2014

U.S. Supreme Court Holds Commercial Injury and Proximate Cause Necessary for False Advertising Claim Under Lanham Act

By Overhauser Law Offices, LLC

Washington, D.C. – The United States Supreme Court unanimously affirmed a Sixth Circuit ruling that intellectual property lawyers for defendant Static Control Components, Inc. of Sanford, North Carolina had properly pled a counterclaim for false advertising under the Lanham Act against Lexmark International, Inc. of Lexington, Kentucky. The Court held that a Lanham Act claim under §1125(a) may be asserted by plaintiffs who are within the zone of interests protected by the Lanham Act and whose injury was proximately caused by a violation of that statute.

Lexmark sells both printers and toner cartridges for those printers. In addition to selling new Lexmark-branded toner cartridges, it refurbishes used Lexmark cartridges. Those refurbished products are sold in competition with the new cartridges. To hinder others from reusing its cartridges, Lexmark includes a microchip that disables an empty cartridge until Lexmark replaces the chip. Respondent Static Control, a maker and seller of components for the remanufacture of Lexmark cartridges, developed a microchip that enabled empty Lexmark cartridges to be refilled and used again.

Lexmark sued for both copyright infringement and patent infringement. It also informed Static Control’s customers that Static Control had infringed its patents. Static Control counterclaimed, alleging that Lexmark had engaged in false or misleading advertising in violation of §43(a) of the Lanham Act, 15 U. S. C. §1125(a). Static Control alleged that Lexmark’s misrepresentations had damaged Static Control’s business reputation and impaired its sales.

The Supreme Court was asked to decide what had been styled by the District Court as a “prudential standing issue”: whether Static Control fell within the class of potential Lanham Act plaintiffs. Arguments that Lanham Act plaintiffs may assert standing under the Second Circuit‘s test – requiring a “reasonable interest” and a “reasonable basis” for the plaintiff’s claim of harm – were rejected by the Court.

Instead, in determining the appropriate reach of the Lanham Act, the Court relied on the traditional principles of statutory interpretation. It acknowledged the longstanding principle that the question for courts in determining who was a proper plaintiff was not a matter of judicial “prudence” but rather one of determining the intent of Congress when it authorized certain plaintiffs to sue under §1125(a): “We do not ask whether in our judgment Congress should have authorized Static Control’s suit, but whether Congress in fact did so.”

The Court thus held that, in a statutory cause of action, protection is extended only to those plaintiffs whose interests fall within the zone of interests protected by the law invoked. Because the Lanham Act lists among its purposes the protection of “persons engaged in [interstate commerce] against unfair competition,” and because “unfair competition” is interpreted to be concerned with injuries to business reputation and present and future sales, a lawsuit for false advertising must allege injury to a commercial interest in reputation or sales.

The Court then considered whether the harm alleged in this case was sufficiently similar to the conduct that the Lanham Act prohibits. It held that the harm is required to have been proximately caused by violations of the statute. In the case of a false advertising claim under the Lanham Act, a commercial injury caused by deceiving consumers was held to be a sufficient link between the wrongful act (the false advertising) and the injury (damage to a business’ reputation and/or sales).

The Court concluded that Static Control had adequately pleaded all elements of a Lanham Act cause of action for false advertising.

Practice Tip: The Court held that, in the case of a Lanham Act claim for false advertising, “a direct application of the zone-of-interests test and the proximate-cause requirement supplies the relevant limits on who may sue.” This test excludes as Lanham-Act plaintiffs some who have indisputably been damaged by false advertising. For example, the Lanham Act does not apply to non-business consumers who have been the victims of false advertising, as the Act restricts its class of plaintiffs to those who have suffered an injury to a “commercial interest” in reputation or sales.

May 5, 2014

146 Trademark Registrations Issued to Indiana Companies in April 2014

By Overhauser Law Offices, LLC

The U.S. Trademark Office issued the following 146 trademark registrations to persons and businesses in Indiana in April 2014 based on applications filed by Indiana trademark attorneys:

Reg. Number	Word Mark	Click to View
4523691	FINANCING EXCLUSIVELY FOR INSURANCE PROFESSIONALS	View
4522026	EVERYONE LOVES OViewR	View
4521898	TRANSFORMATIONAL THEOLOGY	View
4521893	LEADERS BUILD LEADERS	View
4521824	CHOCOLATE SOLDIER	View
4521682	MRC	View
4521661	WTIU	View
4521660	WFIU	View
4521587		View
4521348	LADY HOUDINI	View

May 2, 2014

Patent Office Issues 197 Patents To Indiana Citizens in April 2014

By Overhauser Law Offices, LLC

The U.S. Patent Office issued the following 197 patent registrations to persons and businesses in Indiana in April 2014, based on applications filed by Indiana patent attorneys:

PAT. NO.		Title
D703,500		Gas cap removal tool
8,712,748		Medical diagnosis, therapy, and prognosis system for invoked events and methods thereof
8,712,654		Acceleration based mode switch
8,712,591		Constant low-flow air source control system and method
8,710,950		Wireless control system for a patient support apparatus
8,710,784		Vehicle seating system and method for reducing fatigue with changing actuator movement
8,710,437		Ion generation using wetted porous material
8,710,154		Non-aqueous solution process for the preparation of cross-linked polymers
8,710,063		Purine compounds used as CB2 agonists
8,709,797		Systems and methods for cryopreservation of cells
8,709,648		Conductor-mixed active electrode material, electrode structure, rechargeable battery, and manufacturing method of conductor-mixed active electrode material

May 1, 2014

Insurance Coverage for Advertising Injury: Allstate Held to Have No Duty to Defend or Indemnify Against Allegations of False Advertising

By Overhauser Law Offices, LLC

Indianapolis, Indiana – An insurance attorney for Allstate Insurance Company of Northbrook, Illinois (“Allstate”) filed a Motion for Summary Judgment in the Southern District of Indiana. Allstate asked the court to declare that it had no duty to defend or indemnify the defendants in a putative class action lawsuit proceeding against the defendants in the Middle District of Georgia. The Indiana court ruled against Defendants Preferred Financial Solutions, Inc. (“PFS”) of Indianapolis, Indiana; Credit Card Relief, Inc. (“CCR”) of Indianapolis, Indiana; Jeffery Brooks, President of PFS and CCR of Zionsville, Indiana and Thomas P. Dakich, d/b/a Dakich & Associates, of Indianapolis, Indiana.

This lawsuit concerns Allstate’s obligations to the defendants with respect to a class action lawsuit filed in Georgia against the defendants and others (the “underlying litigation”). The complaint in the underlying litigation, filed by the underlying plaintiffs, alleges that the defendants are interrelated entities that collectively comprise a debt-adjustment-services operation that targets financially troubled customers and extracts fees for worthless services.

In this litigation, which the underlying plaintiffs are attempting to classify as a class action, it is alleged that the defendants promote themselves in print, on the internet, and in broadcast media as a provider of debt-settlement services, debt-elimination services and debt-reduction services. The underlying plaintiffs contend that the defendants never made any attempts to pay or settle the debts of at least some members of the putative class.

The defendants tendered the complaint to Allstate for defense, asserting that the claims in the underlying litigation triggered potential coverage as a covered peril – an “advertising injury” – under the provisions of their insurance contracts with Allstate.

This issue – whether Allstate’s contract for insurance coverage for an “advertising injury” required them to defend and indemnify the defendants – was submitted to the Indiana District Court. Allstate moved for judgment as a matter of law, asserting that the conduct at issue did not qualify as an advertising injury. It contended that it thus had no duty to provide a defense in the underlying litigation.

Under the terms of the insurance agreement, an “advertising injury” was defined in the insurance contract as an “injury arising out of one or more of the following offenses:

1. Oral or written publication of advertising material that slanders or libels a person or organization or disparages a person’s or organization’s goods, products or services;
2. Oral or written publication of advertising material that violates a person’s right to privacy;
3. Misappropriation of advertising ideas or style of business; [and/or]
4. Infringement of copyright, title or slogan as a result of your advertising.”

Excluded from coverage was “[a]ny advertising injury arising out of…[i]ncorrect description of or mistake in advertised price of goods, products or services sold, offered for sale or advertised.”

The Indiana court, in an opinion written by Magistrate Judge Debra McVicker Lynch, noted that there had been no allegation of defamation, violation of privacy, misappropriation of advertising ideas or infringement of intellectual property in defendants’ advertising. As a result, the court concluded that no “advertising injury,” as it was defined in the insurance contract, had occurred. As that holding was dispositive, the court did not reach the issue of whether the exclusion to coverage for “incorrect description” would have applied. As no coverage was found to exist, Allstate was determined to have neither the duty to defend nor to indemnify the defendants.

Practice Tip:

Exclusions to coverage in insurance policies are narrowly construed. However, it seems likely that, had the court not disposed of this matter as not fitting within the definition of “advertising injury,” it would have instead concluded that there was no coverage upon construing the exclusion for “incorrect description” of goods or services offered.

In contrast, businesses sued for defamation, invasion of privacy, misappropriation of advertising ideas and/or infringement of intellectual property, would be wise to consult their commercial general liability insurance policies to evaluate whether such an advertising injury is considered a covered peril.