Indianapolis, Indiana – In the matter of Orbitz, LLC v. Indiana Department of State Revenue, Orbitz, LLC of Chicago, Illinois was heard by the Indiana Tax Court on its request to prohibit public access to information in the court record. The court granted the request, holding thewentworth-new.jpg trade secrets contained in documents submitted to the court were protected against public disclosure by both the Access to Public Records Act (Indiana Code § 5-14-3-1 et seq.) and Indiana Administrative Rule 9.

Orbitz, an online travel company, provides travel-related services on its website that enable its customers to search for and make reservations for a broad array of travel products, including airline tickets, lodging, rental cars, cruises and vacation packages.

The broad issue in this Indiana-state tax appeal was the appropriate base on which to calculate the Indiana state and local taxes due. Generally speaking, a hotel will contract with Orbitz to make its rooms available for reservation through Orbitz’s website. Pursuant to the contract, the hotel agrees to accept a certain amount for its rooms (“net rate”). Nevertheless, a customer who books a room through the website sees – and ultimately pays – a different amount, as Orbitz has added a facilitation fee, a service charge, and a tax recovery charge to the net rate. The tax recovery charge is equal to the amount of state and local taxes due on the room’s rental at the net rate.

After the customer has occupied the room, Orbitz forwards to the hotel the portion of the payment it collected from the customer that constitutes the room’s net rate and tax recovery charge. The hotel is then responsible for remitting to the taxing authorities the appropriate state and local taxes due on the room’s rental.

Following an audit in which the Indiana Department of Revenue found Orbitz to have underpaid the taxes due, Orbitz brought this appeal. Orbitz argued to the court that tax was due only on the net amount paid by Orbitz to the hotel. The Indiana Department of Revenue, in contrast, maintained that Orbitz had been deficient in remitting Indiana’s gross retail (sales) and county innkeeper taxes on the hotel bookings at issue. It contended that the total amount paid by the customer to Orbitz for the room was the correct figure on which to base the Indiana-state tax.

When asking the Indiana Tax Court for summary judgment, Orbitz also asked that the court prohibit public access to its contracts with the Indiana hotels, stating that the contracts were “proprietary [and] competitively sensitive” and that they contained trade secrets belonging to Orbitz.

The general rule in Indiana is that the public has access to court records. Citing the Access to Public Records Act, Ind. Code § 5-14-3-1, the court stated “all persons are entitled to full and complete information regarding the affairs of [their] government.” However, in certain circumstances, that right of access is restricted. An example of such a circumstance is when materials submitted to the court qualify as a trade secret. Trade secrets are protected from disclosure by statute in Indiana.

Indiana Code Section 24-2-3-2 defines a trade secret as:

information, including a formula, pattern, compilation, program, device, method,             technique, or process, that:

1. derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use; and

2. is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.

The court then enumerated the four general characteristics of a trade secret:

1. it is information;

2. that derives independent economic value;

3. that is not generally known, or readily ascertainable by proper means by others who can obtain economic value from its disclosure or use; and

4. that is the subject of efforts, reasonable under the circumstances, to maintain its secrecy.

The court granted Orbitz’s motion to shield Orbitz’s contracts with Indiana hotels, holding the information in those contracts to be properly protected as trade secrets. It stated, “Competition is the bedrock of our country’s economic system. The protection afforded to trade secrets under [the Access to Public Records Act] and Administrative Rule 9 helps to foster a healthy, competitive marketplace . . . . Here, Orbitz’s contracts contain trade secrets and therefore are protected from public disclosure under both APRA and Administrative Rule 9.”

Practice Tip:

When, as here, the documents sought to be protected fall within a mandatory exception set forth in the Access to Public Records Act or Indiana Administrative Rule 9, a court can seal those records without holding a hearing and balancing the competing interests. However, in other cases, when issuing an order to shield information from public access, the court must specifically outline why the need for privacy outweighs the strong public policy to allow such access.

In such a case, Indiana Code § 5-14-3-5.5(d) requires that the court’s order be based on findings of fact and conclusions of law and show “that the remedial benefits to be gained by effectuating the [state’s] public policy of [public access] are outweighed by proof by a preponderance of the evidence by the person seeking the sealing of the record that: (1) a public interest will be secured by sealing the record; (2) dissemination of the information contained in the record will create a serious and imminent danger to that public interest; (3) any prejudicial effect created by dissemination of the information cannot be avoided by any reasonable method other than sealing the record; (4) there is a substantial probability that sealing the record will be effective in protecting the public interest against the perceived danger; and (5) it is reasonably necessary for the record to remain sealed for a period of time.”

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Indianapolis, Indiana – Indiana patent and trademark attorneys for Contour Hardening, Inc. of Indianapolis, Indiana sued seeking injunctive and monetary relief in the Southern District of Indiana. Contour Hardening alleges that Vanair Manufacturing, Inc. of Michigan City, Indiana has infringed the trademark “REAL POWER”, Trademark Registration No. 3,124,014, as well as Contour Hardening’s patented “Vehicle Mounted Electrical Generator System.” The invention is covered by Patent Nos. 6,979,913 and 7,057,303, which have been issued by the U.S. Patent Office.

US06979913-20051227-D00005.PNGIn this lawsuit, Plaintiff Contour Hardening contends that Defendant Vanair has violated, and continues to violate, inter alia, the patent laws of the United States, 35 U.S.C. §§271 and 281- 285, as well as the Federal Trademark Act by infringing Contour Hardening’s two patents, U.S. Patent Nos. 6,979,913 and 7,057,303 (collectively, the “Contour Patents”), and infringing Contour Hardening’s REAL POWER trademark by using Vanair’s allegedly similar ROAD POWER trademark.

Contour Hardening is a developer and provider of Power Take-Off (“PTO”) driven generator systems for vehicles ranging from Class 2 pickup trucks (e.g., full-size trucks) to larger Class 8 Heavy Duty trucks (e.g., tractor trailer trucks). It states that these systems have been utilized in municipal, fire-rescue, construction, healthcare, mining, farming and other applications.

Plaintiff asserts that, sometime around 2007, Vanair first began offering vehicle-mounted AC-generator systems that infringe one or more of the claims of the Contour Patents. Vanair is accused of having received actual knowledge that it was infringing the Contour Patents at least as early December 17, 2012, when an Indiana patent and trademark lawyer for Contour Hardening sent to Vanair a letter providing it with actual notice of the Contour Patents and expressing “concerns regarding possible infringement.” The letter requested that Vanair “evaluate [its] activities relative to these two (2) patents and provide a written response as to when any infringing activities will cease.” According to Contour Hardening, Vanair did not respond this letter.

In addition to its allegations of patent infringement, Contour Hardening asserts trademark infringement. Contour Hardening indicates that it is the owner of United States Registration No. 3,124,014 for the trademark REAL POWER for providing AC generators. It claims that, since at least 2004 and continuously to date, it has adopted and used in interstate commerce the trademark REAL POWER in connection with its PTO-driven AC-generator systems and related operations and that the trademark has become distinctive to consumers in the vehicle-mounted AC-generator industry.

Contour Hardening contends that Vanair offers the allegedly infringing products under the trademark ROAD POWER with knowledge of Contour Hardening’s REAL POWER trademark. It further asserts that the nameplates, labels or other graphic displays that Vanair uses are confusingly similar to Contour Hardening’s trademark and that Vanair’s use of the ROAD POWER trademark is likely to cause confusion or mistake or deception of consumers as to the source of origin of Vanair’s goods or services. Contour Hardening further claims that Vanair’s activities have been willful, deliberate and intentional, have caused a likelihood of confusion, and have been done with the intent to trade upon Contour Hardening’s goodwill in the trademark REAL POWER.

In the complaint, Indiana patent and trademark attorneys assert the following on Contour Hardening’s behalf:

• Count I – Infringement of U.S. Patent 6,979,913
• Count II – Infringement of U.S. Patent 7,057,303
• Count III – Trademark Infringement
• Count IV – False Designation of Origin

Contour Hardening asks the court for a judgment of infringement of the Contour Patents; a judgment of infringement of Contour Hardening’s REAL POWER trademark; a permanent injunction prohibiting further infringement; an order that all infringing devices be delivered and destroyed; damages, including treble damages; costs and expenses; an order declaring that the case is exceptional and an award of attorney’s fees pursuant to such a finding.

Practice Tip: A 2006 opinion from the Federal Circuit, AERO Products International, Inc., et al. v. INTEX Recreation Corp., et al., addressed double recovery in cases where both patent infringement and trademark infringement are found. The Federal Circuit held that the trial court’s award of both $2.95 million for patent infringement – which was doubled to $5.9 million pursuant to a finding of willful patent infringement – and $1 million for trademark infringement was impermissible as a double recovery for the “same injury.” The court vacated the $1 million award for trademark damages stating, “even though damages are claimed based upon separate statutes or causes of action, when the claims arise out of the same set of operative facts, as is the case here, there may be only one recovery.”

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Washington, D.C.The U.S. Department of Commerce’s United States Patent and 140px-US-PatentTrademarkOffice-Seal.svg.pngTrademark Office (“USPTO”) recently announced that it will hold a public forum to discuss implementation of Title I of the Patent Law Treaties Implementation Act of 2012 (“PLTIA”). The law, which serves as the implementing legislation for the Geneva Act of the Hague Agreement Concerning the International Registration of Industrial Designs (“the Hague Agreement”), allows applicants to file a single international design application to acquire global protection. The forum will be held on Tuesday, January 14, 2014, at the USPTO campus in Alexandria, Virginia.

On November 29, 2013, the USPTO published a notice in the Federal Register seeking written comments on proposed changes to the rules of practice to implement Title I of the PLTIA.

The PLTIA and the proposed rules call for the following: standardizing formal requirements for international design applications; establishing the USPTO as an office through which international design applications may be filed; providing for substantive examination by the Office of international design applications that designate the United States; providing provisional rights for published international design applications that designate the United States; and setting the patent term for design patents at 15 years from the date of patent grant.

Indianapolis, Indiana – Citing the recent U.S. Supreme Court decision in Gunn v. Minton, the court-bench-picture.jpgSouthern District of Indiana has remanded to the Marion Superior Court the legal malpractice lawsuit filed by the Indiana patent lawyer for Miller Veneers, Inc. The Defendants in the case are Indiana patent attorney Clifford W. Browning as well as two Indiana law firms, Krieg DeVault, LLP and Woodard, Emhardt, Moriarty, McNett & Henry, LLP.

In September 2012, Miller Veneers sued Clifford W. Browning; Krieg DeVault; and Woodard, Emhardt, Moriarty, McNett & Henry in Marion Superior Court alleging attorney malpractice regarding the acquisition of patents. Defendants removed the case to the Southern District of Indiana in October 2012, asserting federal question jurisdiction and 28 U.S.C. § 1338(a) (2008).

Although the court originally found that it had subject matter jurisdiction under 28 U.S.C. § 1338(a), the Supreme Court’s recent decision in Gunn v. Minton led the court to reconsider the question of federal jurisdiction and to conclude that it did not, in fact, have subject matter jurisdiction over the suit, despite that the legal malpractice claims were based on underlying patent matters.

According to the new standard set forth in Gunn, federal jurisdiction exists over state law claims “if a federal issue is (1) necessarily raised, (2) actually disputed, (3) substantial, and (4) capable of resolution in federal court without disrupting the federal-state balance approved by Congress.”

While the issues of federal law in this malpractice lawsuit were found to meet the first two prongs, the court held that they failed the second two prongs. Specifically, the third Gunn prong requires that the issue be “substantial,” which requires the court “to look to the importance of the issue to the federal system as a whole.” The court held that, as was the case in Gunn, this issue was not important to the federal system as a whole but merely to the parties. The court also held that the fourth prong had not met. It stated that, where issues such as malpractice are to be litigated, the balance is in favor of the states as they have “a special responsibility for maintaining standards among members of the licensed professions.”

The court, upon determining that it lacked jurisdiction under the standard set forth in Gunn, remanded the matter to the Marion Superior Court.

Practice Tip: In Gunn, the Supreme Court held that a legal malpractice claim pertaining to the handling of a patent infringement case did not afford jurisdiction under 28 U.S.C. § 1338(a), stating, “We are comfortable concluding that state legal malpractice claims based on underlying patent matters will rarely, if ever, arise under federal patent law for purposes of § 1338(a).”

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Fort Wayne, Indiana – District Magistrate Judge Roger B. Cosbey struck four affirmative defenses asserted by anonymous Defendant John Doe in Plaintiff Malibu Media’s lawsuit in the Northern District of Indiana for copyright infringement.

Plaintiff Malibu Media, LLC, filed a copyright infringement action against Defendant John Doe. Defendant answered with ten affirmative defenses. Malibu Media sought to strike four of those defenses–laches, unclean hands, waiver, and estoppel; failure to mitigate damages; failure to join an indispensable party; and implied license, consent, and acquiescence.

Plaintiff first moved to strike Defendant’s second affirmative defense–that “Plaintiff’s claims are barred by the equitable doctrines of laches, unclean hands, waiver and estoppel”–as a bare conclusory allegation unsupported by any factual basis. The court ordered that defense stricken, stating “[m]erely stringing together a long list of legal defenses…does not do the job of apprising opposing counsel and this Court of the predicate for the claimed defense–which is after all the goal of notice pleading.”

Plaintiff next moved to strike Defendant’s fifth affirmative defense–that Plaintiff did not mitigate its damages. Malibu Media argued that this defense was improper because it had elected to pursue only statutory, rather than actual, damages. The court agreed that a copyright plaintiff’s exclusive pursuit of statutory damages invalidates a failure-to-mitigate defense and struck this affirmative defense.

The court also struck Defendant’s seventh affirmative defense, in which Defendant argued that Plaintiff had failed to join an indispensable party. Defendant asserted that he had not engaged in any infringing activity and Plaintiff has not joined those who had. The court held that Defendant’s assertion that he had not engaged in any improper activity was not an affirmative defense but rather a mere denial of liability. It further held that Defendant was incorrect in asserting that joinder was necessary, holding that the court would be able to adjudicate the matter and “accord complete relief to Plaintiff regardless of whether any other allegedly infringing members were joined in the action.

Finally, Plaintiff asked that Defendant’s eighth affirmative defense as be struck as conclusory. Defendant had asserted that “Plaintiff’s claims are barred by Plaintiff’s implied license, consent, and acquiescence to Defendant because Plaintiff authorized use via Bit Torrent [sic].” The court held that Defendant’s Answer foreclosed the possibility of an implied license defense, as Defendant had denied downloading the copyrighted work. As such, Defendant could not also argue that he had downloaded the copyrighted work with a license.

Practice Tip #1: Generally speaking, motions to strike portions of pleadings are disfavored as they consume scarce judicial resources and may be used for dilatory purposes. Such motions will generally be denied unless the portion of the pleading at issue is prejudicial. When faced with a motion to strike affirmative defenses under Rule 12(f), Indiana federal courts apply a three-part test: (1) whether the matter is properly pled as an affirmative defense; (2) whether the affirmative defense complies with Federal Rules of Civil Procedure 8 and 9; and (3) whether the affirmative defense can withstand a Rule 12(b)(6) challenge. An affirmative defense that fails to meet any of these standards must be stricken.

Practice Tip #2: Defendant did not file a response to Malibu Media’s motion to strike Defendant’s affirmative defenses. For that reason alone, the court could have ruled on the motion summarily under the Northern District’s Local Rule 7-1(d)(4).

Practice Tip #3: Even under the liberal notice pleading standards of the Federal Rules, an affirmative defense must include either direct or inferential allegations as to all elements of the defense asserted. Bare bones conclusory allegations are insufficient. Moreover, laches, waiver, estoppel, and unclean hands are equitable defenses that must be pled with the specific elements required to establish the defense.

Practice Tip #4: An implied license, which Defendant argued as an affirmative defense, arises when (1) a person (the licensee) requests the creation of a work, (2) the creator (the licensor) makes that particular work and delivers it to the licensee who requested it, and (3) the licensor intends that the licensee-requestor copy and distribute his work.

Practice Tip #5: This opinion demonstrates one of the pitfalls of pleading in the alternative. Defendant appears to have tried to argue that he didn’t download the copyrighted material but that, if he had, it was with an implied license from Plaintiff. The court was not persuaded, however, as Defendant’s Answer had denied downloading the copyrighted material with BitTorrent. As a result, Defendant was not permitted to argue also that he downloaded the copyrighted material using BitTorrent but that he had an implied license to do so.

A well-known example of such alternative pleading was demonstrated by Richard Haynes: “Say you sue me because you say my dog bit you. Well, now this is my defense: My dog doesn’t bite. And second, in the alternative, my dog was tied up that night. And third, I don’t believe you really got bit. And fourth, I don’t have a dog.”

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South Bend, Indiana – Joe Hand Promotions, Inc. of Feasterville, Pennsylvania, via a Kentucky intellectual property lawyer, has sued in the Northern District of Indiana alleging that Lee H. Holmes, individually and d/b/a Homer’s Restaurant, both of Peru, Indiana, unlawfully Lesnar-Overeem-Picture.jpgintercepted and televised the Ultimate Fighting Championship 141:Brock Lesnar v. Alistar Overeem (“the Program”).

Joe Hand Promotions, a commercial distributor of sporting events, states that it was granted exclusive rights to distribute via closed-circuit telecast the Ultimate Fighting Championship (“UFC”) fight between Brock Lesnar and Alistar Overeem, which Joe Hand Promotions asserts was broadcast nationwide on December 30, 2011.

In the complaint against Holmes and Homer’s Restaurant, Joe Hand Promotions has alleged such wrongful acts as interception, reception, publication, divulgence, display, exhibition, and “tortuously” [sic] converting the Program.

In addition to naming the restaurant, which was not listed as a separate legal entity, Joe Hand Promotions has also sued Holmes as an individual, claiming that he had the right and ability to supervise the activities of Homer’s Restaurant. Joe Hand Promotions asserts that those activities included the unlawful interception of its UFC Program.

Holmes and Homer’s Restaurant have been accused of violating 47 U.S.C. § 605 and 47 U.S.C. § 553. The complaint, filed by a Kentucky intellectual property attorney, also lists a count of conversion. Joe Hand Promotions seeks statutory damages of $110,000 for each willful violation of 47 U.S.C. § 605; $60,000 for each willful violation of 47 U.S.C. § 553; compensatory and punitive damages on the claim of conversion; costs, including costs incurred for the service of process and the investigation of potential wrongdoing; and attorney’s fees.

Practice Tip #1: While on the surface this appears to be a copyright case, an allegation of interception under 47 U.S.C. § 605 is a different cause of action from copyright infringement. However, a suit alleging interception does not preclude an additional lawsuit asserting different causes of action. For example, the copyright holder can also sue for copyright infringement, which could increase damages by as much as $150,000.

Practice Tip #2: Most satellite signal providers employ encryption to limit receiption to certain groups, such as paying subscribers.  However, not all licenses grant equal rights.  for example, if an individual as a “residential” agreement with a satellite provider, that agreement does not also give that individual the right to display the performance in a public setting like a bar or restaurant..

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The U.S. Trademark Office issued the following 160 trademark registrations to persons and businesses in Indiana in December 2013 based on applications filed by Indiana trademark attorneys:

Reg. Number Word Mark Click to View
4456856 NATIONAL SPORTSMANSHIP FOUNDATION VIEW
4456683 BÉBÉCONFORT VIEW
4455046 WELCOME TO WORK VIEW
4455043 GESSO VIEW
4455007 CARDIOCHEK VIEW
4454629 KSIR VIEW
4454616 TOUCHLINE VIEW
4454595 SERVING HIGHER INTERESTS VIEW
4454431 SPLATTER SHOT VIEW
4454173 CO VIEW
4454024 OAKCREST CAPITAL VIEW
4453969 DON’T REPLACE IT, REGLAZE IT. VIEW
4453926 STATUSQUOSUCKS! VIEW
4453902 WAGGONER LEGAL ENGLISH LLC VIEW

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The U.S. Patent Office issued the following184 patent registrations to persons and businesses in Indiana in December 2013, based on applications filed by Indiana patent attorneys: 

Patent No.  Title
D696,781 Orthopaedic tool handle 
8,621,641 Systems and methods for authorization of information access 
8,620,625 Above bed sensor 
8,620,477 Control for pressurized bladder in a patient support apparatus 
8,618,954 Mobile FLOW readout and mobile FLOW sequencer features 
8,618,918 Patient support, communication, and computing apparatus including movement of the support and connection to the hospital network 
8,618,511 Marking method for the reject marking of test elements 
8,618,475 Ion mobility spectrometer with one or more integral ion activation regions 
8,618,444 Rotary door heater system 
8,618,293 Redox mediators 

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New Albany, Indiana – Vehicle Services Group, LLC  of Madison, Indiana(“VSG”), via anpatent-picture.png Indiana patent lawyer, has sued Mohawk Resources, LTD of Amsterdam, New York(“Mohawk”) alleging patent infringement of VSG’s “Electronically Controlled Vehicle Lift and Vehicle Service System,” Patent No. 6,983,196 (the “‘196 patent”), which has been registered by the U.S. Patent Office.

VSG is a designer and manufacturer of vehicle lifts, such as those one might see lifting a car in an auto mechanic’s shop. VSG’s ‘196 patent relates to a vehicle lift that has an electronic control which is functional to control the raising and lowering of the lift and to enable the display of a variety of information.

Mohawk also makes vehicle lifts, and is a direct competitor of VSG in the marketplace. The lifts that are at issue in this case (the “Accused Lifts”) include various Mohawk products. The complaint cites infringement by the Mobile Column Lifts identified as model numbers MP-18, MP-24 and MP-30. Those particular lifts purportedly incorporate the technology covered by VSG’s ‘196 patent, and thus infringe that patent.

In addition to levying allegations of patent infringement, VSG also claims that Mohawk is actively and knowingly inducing infringement of at least claim 145 of the ‘196 patent by instructing third parties, such as customers, to network together the Accused Lifts. Finally, Mohawk is accused of knowingly contributing to the infringement by others of the ‘196 patent by making, using, offering for sale, and selling the Accused Lifts.

An Indiana patent attorney alleged the following on behalf of VSG in a civil action for patent infringement:

• Count I: Patent Infringement
• Count II: Inducing Infringement
• Count III: Contributory Infringement

VSG asserts that Mohawk’s acts of infringement of the ‘196 patent have caused and will continue to cause VSG substantial and irreparable injury. It also contends that the infringing activities have been willful and asks the court for judgment as follows:

A. That Mohawk be found to infringe the ‘196 patent;
B. That Mohawk, its officers, agents, servants, employees and attorneys, and all persons in active concert with them, or any of them, be preliminarily and permanently enjoined from infringing the ‘196 patent;
C. That VSG be awarded damages adequate to compensate for Mohawk’s infringement of the ‘196 patent;
D. That the Court deem this case to be exceptional; and
E. That VSG be awarded its attorneys’ fees, expenses, and costs of this action.

Practice Tip: This is at least the second complaint filed by VSG in the Southern District of Indiana and assigned to Judge Sarah Evans Barker. A previous lawsuit, Vehicle Service Group, LLC v. Stertil-Koni USA, Inc., makes similar allegations of patent infringement.

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WikiLeaks recently released the entire Intellectual property Rights Chapter from the secret negotiated draft text of theTrans-Pacific Partnership (“TPP”) Intellectual Property Rights Chapter. The TPP is the largest-everwikiLeaks.png economic treaty, encompassing nations representing more than 40 percent of the world’s gross domestic product (“GDP”). The WikiLeaks release of the text came ahead of the decisive TPP Chief Negotiators summit in Salt Lake City, Utah. The chapter published by WikiLeaks is perhaps the most controversial chapter of the TPP due to its wide-ranging effects on medicines, publishers, internet services, civil liberties and biological patents. Significantly, the released text includes the negotiation positions and disagreements between all 12 prospective member states.

The TPP is the forerunner to the equally secret US-EU pact, the Transatlantic Trade and Investment Partnership (“TTIP”), for which President Obama initiated US-EU negotiations in January 2013. Together, the TPP and TTIP will cover more than 60 percent of global GDP. Both pacts exclude China.

Since the beginning of the TPP negotiations, the process of drafting and negotiating the treaty’s chapters has been shrouded in an unprecedented level of secrecy. Access to drafts of the TPP chapters is shielded from the general public. Members of the U.S. Congress are able to view only selected portions of treaty-related documents in highly restrictive conditions and under strict supervision. It has been previously revealed that only three individuals in each TPP nation have access to the full text of the agreement, while 600 ‘trade advisors’ – often lobbyists for large U.S. corporations – are granted privileged access to crucial sections of the treaty text.

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