Indiana Intellectual Property Law News

December 28, 2015

Federal Trademark Law: Lanham Act Ban on Disparaging Trademark Registrations Is Unconstitutional

The Lanham Act’s ban on registering disparaging marks violates the First Amendment of the Constitution held the Federal Circuit, sitting en banc, on December 22, 2015. In re Tam, en banc Fed. Cir., No. 2014-1203, oral argument 12/22/2015.

In a case involving the refusal to register the term “The Slants” for a group of Asian musicians, the court concluded that the disparagement provision of the Lanham Act is used to reject trademarks based on their content and viewpoint, and that denying the benefit of registration on this basis is an unlawful burden on free speech.

Background

After the U.S. Patent and Trademark Office refused to register the “The Slants” mark as disparaging under Section 2(a) of the Lanham Act, 15 U.S.C. § 1052(a), the applicants appealed to the Federal Circuit. The Federal Circuit panel affirmed based on In re McGinley, 660 F.2d 481 (CCPA 1981), which found no First Amendment violation since the applicant was free to use the mark without the registration.

However, Judge Moore, in her “additional views,” said that McGinley should be reconsidered by the en banc in light of current First Amendment jurisprudence stating that the government may not deny a benefit based solely on a moral judgment about the viewpoint expressed by a mark. The Federal Circuit granted en banc review on whether Section 2(a) violates the First Amendment.

Disparagement Provision Is Neither Content Nor Viewpoint Neutral

It is beyond dispute that Section 2(a) discriminates on the basis of content and viewpoint to the extent that it denies registration on the basis of the idea or message expressed, the court held. It rejected the government’s argument that the provision calls for rejection of marks based on particular words rather than viewpoints. Judge Moore pointed out that an applicant can register a mark if he shows it is perceived by the referenced group in a positive way, even if the mark contains language that would be offensive in another context.

Nor can the government avoid strict scrutiny of the provision by contending that it simply regulates commercial speech, Judge Moore continued. While trademarks have a commercial function as source identifiers, she explained, it is always a mark’s expressive character that is the basis for the disparagement exclusion from registration, not its ability to serve as a source identifier.

The en banc court expressly overruled In re McGinley, rejecting the argument that denial of a trademark registration does not prohibit use of the trademark. Citing Perry v. Sindermann, 408 U.S. 593(1972), Judge Moore pointed out that, by denying the government benefit based on constitutionally protected speech, a government could penalize and inhibit that freedom. She wrote the following:

Federal trademark registration brings with it valuable substantive and procedural rights unavailable in the absence of registration. These benefits are denied to anyone whose trademark expresses a message that the government finds disparages any group, Mr. Tam included. The loss of these rights, standing alone, is enough for us to conclude that § 2(a) has a chilling effect on speech. Denial of federal trademark registration on the basis of the government’s disapproval of the message conveyed by certain trademarks violates the guarantees of the First Amendment.

Government Speech and Government Subsidy

The court also rejected the contention that trademark registration is government speech and therefore beyond the terms of the First Amendment. While registered trademarks are recorded on a government database, that doesn’t convert the underlying speech to government speech any more that copyright registration converts copyrighted works into government speech, Judge Moore noted. “If being listed in a government database or published in a list of registrations were enough to convert private speech to government speech, nearly every action the government takes–every parade permit granted, every property title recorded, every hunting or fishing license issued–would amount to government speech,” she wrote.

Nor was the Federal Circuit persuaded that the provisions of Section 2(a) set out a variety of legitimate conditions for providing the government subsidy of trademark registration, pointing out that the availability of government subsidies may not be limited by unconstitutional conditions. While Congress is entitled to define the conditions under which it extends government benefits, the court noted that the denial of registration has a major chilling effect on private speech because the benefits of registration are so substantial.

Judge Moore added the following:

Were we to accept the government’s argument that trademark registration is a government subsidy and that therefore the government is free to restrict speech within the confines of the trademark program, it would expand the “subsidy” exception to swallow nearly all government regulation. In many ways, trademark registration resembles copyright registration. Under the logic of the government’s approach, it follows that the government could refuse to register copyrights without the oversight of the First Amendment. Congress could pass a law prohibiting the copyrighting of works containing “racial slurs,” “religious insults,” “ethnic caricatures,” and “misogynistic images.”

Judge O’Malley filed a concurring opinion, writing separately to argue that Section 2(a) is unconstitutionally vague under the Fifth Amendment.

Judge Dyk filed a concurring and dissenting opinion, arguing that the majority goes too far in concluding that the statute is facially unconstitutional as applied to purely commercial speech.

Judge Lourie filed a dissenting opinion, explaining that he would apply stare decisis to sustain Section 2(a).

Judge Reyna filed a dissenting opinion, arguing that Section 2(a) is an appropriate regulation of commercial speech.

Practice Tip: The availability of trademark protection for the Washington Redskins trademark, which was also denied federal trademark protection on the grounds that it was disparaging, is currently under review by the Fourth Circuit Court of Appeals.

December 23, 2015

Indiana Patent Law: Motion in Limine to Bar Evidence Regarding Inequitable Conduct Denied

By Overhauser Law Offices, LLC

Evansville, Indiana – District Judge Richard L. Young, writing for the Southern District of Indiana in the matter of Berry Plastics Corp. v. Intertape Polymer Corp., denied Berry’s motion in limine to prohibit Intertape from proffering testimony or evidence at trial which referred to reliance on counsel or good faith in prosecuting the patent applications for U.S. Patent No. 7,476,416 (the “‘416 patent”).

Plaintiff Berry Plastics Corp. of Evansville, Indiana filed a patent infringement lawsuit against competitor Intertape Polymer Corp., which owns the ‘416 patent. The court held a jury trial from November 3, 2014 to November 17, 2014.

The issue of Berry’s inequitable conduct claim against Intertape, which is headquartered in Montreal, Canada, remained unresolved after the jury trial and was set for a subsequent bench trial. To prevail on this claim, Berry would need to prove “by clear and convincing evidence that Intertape knew of a prior art reference, knew that it was material, and made a deliberate decision to withhold it.”

Prior to the trial on this claim, Plaintiff filed a motion in limine seeking to prohibit Defendant from proffering testimony or evidence at the bench trial that referred to reliance on counsel or good faith in prosecuting patent applications for the ‘416 patent. Full discovery regarding those issues had previously been denied to Berry and Berry argued to the court that it would unfairly prejudice its interests to deny it full discovery, yet leave open the possibility that Intertape would raise those defenses at trial.

The court denied Berry’s motion, noting three facts relevant to that decision. First, Defendant Intertape had indicated that it would not assert advice of counsel and counsel’s good faith during the bench trial. Second, the witnesses relevant to the defenses would not be called at the trial. And, finally, the court noted that it had already ruled that “the testimony upon which Berry bases its motion (and testimony strikingly similar to it) does not amount to an assertion of the defenses of reliance on advice of counsel or counsel’s good faith.”

December 21, 2015

Indiana Trademark Litigation: Indiana Botanic Gardens Sues VitalMax Vitamins Alleging Infringing Use of “Accu-Hear”

By Overhauser Law Offices, LLC

Hammond, Indiana – Plaintiff Indiana Botanic Gardens, Inc. of Hobart, Indiana filed a trademark infringement lawsuit in the Northern District of Indiana alleging that Almark Products, Inc. d/b/a VitalMax Vitamins (“VitalMax”) of Delray Beach, Florida infringed its trademarked “ACCU HEAR”, U.S. Trademark No. 3,010,289, which has been registered with the U.S. Patent and Trademark Office.

Indiana Botanic allege that it has been in the business of processing, packaging and otherwise selling variety of herbal products for many years. It contends that it has done so under the ACCU HEAR trademark, which has been registered for use in connection with dietary supplements.

In this trademark litigation, Indiana Botanic accuses Defendant VitalMax of production, labeling, sale and offering for sale of a nutritional supplement offered under the name ACCU-HEAR. This term, Indiana Botanic states, is confusingly similar to Plaintiff’s ACCU HEAR trademark and will irreparably harm Plaintiff by diminishing the reputation and goodwill of that trademark. Indiana Botanic asserts that VitalMax infringed the ACCU HEAR trademark willfully and deliberately.

In this federal complaint, filed by a trademark attorney for Indiana Botanic, the following is alleged:

• Count I: Federal Trademark Infringement

• Count II: Unfair Competition Under Federal Law

The “Jurisdiction and Venue” section of this federal complaint lists additional claims – “state trademark infringement, injury to business reputation and dilution, deceptive trade practices, deceptive business practices and unfair competition under the laws of the State of Indiana” – but those claims were not included as separate counts.

Indiana Botanic seeks equitable relief along with damages, including punitive damages, costs and attorneys’ fees.

December 18, 2015

Indiana Copyright Law: District Court Terminates Copyright Suit Over Photo; Plaintiff Appeals

By Overhauser Law Offices, LLC

Chicago, Illinois – One of the copyright lawsuits of Plaintiff Richard N. Bell of McCordsville, Indiana has been terminated by the trial court. Bell filed an appeal on multiple grounds with the United States Court of Appeals for the Seventh Circuit.

This Indiana lawsuit alleged copyright infringement of a photo that Bell, an Indiana copyright lawyer and professional photographer, took and copyrighted. The photo, U.S. Copyright Registration No. VA0001785115, was of the Indianapolis skyline. Bell has sued numerous Defendants alleging copyright infringement of this photo. In this lawsuit, the Defendants were Cameron Taylor, Taylor Computer Solutions, Insurance Concepts, Fred O’Brien, and Shanna Cheatham, all of Indianapolis, Indiana.

On December 4, 2015, District Judge Tanya Walton Pratt of the Southern District of Indiana entered a final judgment in favor of all Defendants and terminated the case. Within days, Bell appealed to the Seventh Circuit. Bell contends that the district court acted improperly regarding:

• The district court’s opinion, order and final judgment granting summary judgment in favor of the Defendants;
• The denial of “Plaintiff’s Second Motion to Compel and sanctions against Defendants for failing to answer Interrogatories and product [sic] requested documents … on October 16, 2013″ as well as his “appeal to the District Judge” on June 9, 2014 regarding that motion;
• The denial of “Plaintiffs [sic] Motion for Leave to File Fourth Amended Complaint”;
• The denial of an additional motion to compel and for sanctions;
• The district court’s ruling on partial summary judgment;
• The district court’s ruling on “Bell’s Motion to Relieve Plaintiff from Orders of the Court”; and

• The district court’s entry of final judgment against Bell.

Practice Tip: This is not the first time Bell has appealed in this litigation. We blogged about a prior appeal to the Seventh Circuit wherein Bell, after appealing, then argued that his appeal was premature and should not yet be heard by the appellate court.

December 17, 2015

Patent Law: Patent Litigation May Be Impacted by Amendments to Federal Rules of Civil Procedure

By Overhauser Law Offices, LLC

Washington, D.C. – The United States Supreme Court ordered the Federal Rules of Civil Procedure to be amended following last year’s approval of the changes by the Judicial Conference Advisory Committee. Civil Rules 1, 4, 16, 26, 30, 31, 33, 34, 37, 55 and 84, and the Appendix of Forms were affected by this change. The revisions took effect on December 1, 2015.

These changes may affect patent litigation at the trial court level. Most relevantly, Rule 84, “Forms,” was abrogated. That change, in turn, eliminated the Appendix of Forms, including Form 18, which had provided a basic sample complaint outlining what constituted a sufficient allegation of direct patent infringement. Rule 84 had provided that the “forms contained in the Appendix of Forms are sufficient under the rules and are intended to indicate the simplicity and brevity of statement which the rules contemplate.”

Practice Tip: It appears that the abrogation of Rule 84 will modify the pleading standard for patent litigation, raising it to the higher standard set forth by the Supreme Court in Twombly and Iqbal. It is unclear how federal courts will interpret these revisions. Consequently, Indiana patent attorneys, and especially patent litigators, would be wise to keep abreast of rulings on motions to dismiss for failure to state a claim under Rule 12(b)(6) as well as motions for a more definite statement under Rule 12(e) as the contours of the revised pleading standard in the context of patent infringement litigation are clarified.

December 16, 2015

Indiana Copyright Litigation: Remaining Copyright Defendants in Bell Lawsuit to be Dismissed

By Overhauser Law Offices, LLC

Indianapolis, Indiana – District Judge Tanya Walton Pratt of the Southern District of Indiana denied Plaintiff’s request for partial summary judgment for declaratory relief and injunctive relief against Defendants in a copyright dispute over the use of Plaintiff’s copyrighted photograph of Indianapolis.

This lawsuit dates back to June 7, 2011 when Plaintiff Richard N. Bell of McCordsville, Indiana sued 22 Defendants for alleged infringement of his copyrighted photo, U.S. Copyright Registration No. VA0001785115. Bell amended his complaint multiple times, with the third amended complaint becoming the operative pleading on December 6, 2012.

In May 2013, the litigation was severed into three separate cases, including the one that is the subject of this opinion. In this lawsuit, Bell, who is both an Indiana copyright attorney and a professional photographer, accused Defendants Insurance Concepts, Fred O’Brien and Shanna Cheatham of copyright infringement. Bell sought injunctive relief along with damages, costs and attorney’s fees.

A prior opinion by the court held for these Defendants on the issues of Bell’s state law claims and copyright damages claims. In this order, the court addressed the parties’ cross motions for partial summary judgment on the remaining issues – declaratory and injunctive relief.

The court first cited the four-factor test necessary to obtain an injunction, which states that a plaintiff must show:

(1) that it has suffered an irreparable injury; (2) that remedies available at law, such as monetary damages, are inadequate to compensate for that injury; (3) that, considering the balance of hardships between the plaintiff and defendant, a remedy in equity is warranted; and (4) that the public interest would not be disserved by a permanent injunction.

The court noted that in a prior ruling, it had concluded that Bell had failed to establish any damages, including no damages that would rise to the level of “irreparable injury.” Consequently, the first factor was not met. The court then opined that an injunction was also unwarranted under the second factor, as Bell could again institute litigation upon finding any future copyright violations by a Defendant. Having found that at least two of the four elements required for an injunction were missing, the court declined to address the remaining factors.

The court similarly declined to exercise its discretion to grant declaratory relief on the grounds that, after having been notified, the Defendants had promptly removed the copyrighted photo and, moreover, the websites on which the photo had been published no longer existed. As such, it concluded that there was no “substantial controversy, between parties having adverse legal interests, of sufficient immediacy and reality to warrant the issuance of a declaratory judgment.”

The court consequently denied Plaintiff Bell’s motion for partial summary judgment and his request for declaratory and injunctive relief. Defendants’ motion for partial summary judgment was granted.

Practice Tip:

• Attorney/Photographer Sues Georgia Real Estate Company for Infringing Copyrighted Photo
• Sovereign Immunity May Take a Toll on Bell’s Latest Copyright Lawsuit
• Appellate Court Dismisses Copyright Appeal as Premature
• Bell Rings in the Holiday Weekend with a New Copyright Lawsuit
• Bell Files New Copyright Infringement Lawsuit
• Bell Sues Georgia-Base FindTicketsFast.com for Copyright Infringement
• Richard Bell Files Two New Copyright Infringement Lawsuits
• Court Prevents Copyright Plaintiff Bell from Outmaneuvering Legal System; Orders Bell to Pay Almost $34,000 in Fees and Costs
• Three Default Judgments of $2,500 Ordered for Copyright Infringement

• Court Orders Severance of Misjoined Copyright Infringement Complaint

• Richard Bell Files Another Copyright Infringement Lawsuit

December 14, 2015

Indiana Copyright Litigation: Copyright Defendant Removes Lawsuit to Federal Court

By Overhauser Law Offices, LLC

Indianapolis, Indiana – An Indiana copyright lawyer for Defendant Wrightspeed, Inc. of San Jose California filed a notice of removal in the Southern District of Indiana on the basis of both federal-question jurisdiction and diversity-of-citizenship jurisdiction.

Plaintiff Precision Rings, Inc. of Indianapolis, Indiana had filed its lawsuit in Marion County Superior Court seeking declaratory relief, injunctive relief, unspecified damages and attorney’s fees. Among Plaintiff’s contentions was the breach of a nondisclosure agreement. Included in this alleged breach was the misappropriation of Plaintiff’s trade secrets, which involved the use or disclosure by Defendant of certain copyrighted drawings that Plaintiff had registered with the U.S. Copyright Office.

Defendant Wrightspeed contended that federal-question jurisdiction was proper and asked that the federal court in the Southern District of Indiana hear and decide all further matters in the litigation. Defendant asserted that the complaint arose under copyright law because Plaintiff’s complaint included a claim that would require construction of the Copyright Act. Consequently, subject matter jurisdiction rested exclusively in federal court.

Defendant Wrightspeed also asserted that diversity-of-citizenship jurisdiction was a proper basis for the Indiana federal court to hear the litigation. The parties were completely diverse, it stated, with Plaintiff being a citizen of Indiana and Defendant being a citizen of both Delaware and California. Defendant contended further that, considering the potential damages, fees and costs, the amount at stake was well in excess of the $75,000 threshold necessary for diversity-of-citizenship jurisdiction.

December 11, 2015

Indiana Trademark Litigation: Trademark Lawsuit Filed Over Use of “All Star” Name

By Overhauser Law Offices, LLC

Indianapolis, Indiana – Plaintiff All Star Heating & Cooling, Inc. (“All Star”) of Camby, Indiana sued in the Southern District of Indiana alleging that Quality Heating and Air, Inc. (“Quality Heating”) d/b/a All Star Air and Richard Cusick (“Cusick”) of New Palestine, Indiana are infringing its trade name.

Both Plaintiff and Defendants are in the business of providing heating, venting and air conditioning service, installation and repair. Plaintiff All Star states that it began business in December of 2005 and that it has used the same name since that time. It also indicates that it has been using “the same trade dress since 2011.” This trademark infringement complaint does not indicate that Plaintiff’s business name has been registered by the U.S. Patent and Trademark Office.

The complaint states that Defendant Cusick, who is believed to be the owner and operator of Defendant Quality Heating, began business in 2014 under the assumed business name All Star Air. Plaintiff asserts that Quality Heating is currently located less than 30 miles from Plaintiff’s location.

Plaintiff All Star contends that customers and vendors have been confused by Defendants’ use of the All Star name, stating that they have “wrongly believed that there is an association or connection between the Plaintiff’s business and the Defendants’ business.” Plaintiff avers that, as a consequence, Defendants are liable for trade name infringement and unfair competition.

In its lawsuit, filed by an Indiana trademark lawyer, Plaintiff lists the following counts:

• Count I: Federal Unfair Competition
• Count II: State and Common Law Trademark Infringement

• Count III: Common Law Unfair Competition

All Star seeks equitable relief, including an injunction; damages, including treble damages; costs and attorney fees.

December 8, 2015

Indiana Copyright Litigation: Brick Shirt House Alleges Infringement of Copyrighted Image of Beer Mug in the Shape of Indiana

By Overhauser Law Offices, LLC

Indianapolis, Indiana – Plaintiff The Brick Shirt House, LLC of Indianapolis, Indiana filed a copyright infringement complaint in the Southern District of Indiana. The lawsuit alleges that Indiana on Tap, LLC of Fishers, Indiana infringed Plaintiff’s copyrighted art work “Drink Indiana,” Copyright Registration No. VA0001895289, which has been registered with the U.S. Copyright Office.

Brick Shirt House is engaged in the business of printing on apparel and other merchandise. An Indiana copyright attorney for Brick Shirt House asserts in this lawsuit that the visual art at issue in this litigation, “Drink Indiana,” was created in October 2011 by Alex Janeczek, manager and owner of Brick Shirt House. The art work features an Indiana-shaped beer mug with beer foam spilling over the top.

Around December 16, 2013, Janeczek discovered a drawing in use by Indiana On Tap that Plaintiffs contend is “substantially similar to Drink Indiana Beer Mug, as it copied, verbatim, the essential elements of Drink Indiana Beer Mug.” He also learned of Indiana On Tap’s intent to distribute merchandise with the accused artwork. That same day or shortly thereafter, Brick Shirt House indicates that it registered its art work with the U.S. Copyright Office. Approximately a week later, Brick Shirt House e-mailed Indiana On Tap and requested that Indiana On Tap cease using the artwork, stating its belief that the Indiana On Tap work infringed Brick Shirt House’s copyrighted art. Several e-mails were exchanged but apparently no resolution was reached.

In July 2014, Indiana On Tap again advertised its intent to sell t-shirts incorporating the accused artwork. In response, a copyright attorney for Brick Shirt House sent a cease and desist demand letter to Indiana On Tap. Indiana On Tap denied infringement and refused to cease use of the graphic. Plaintiffs indicate that additional instances of copyright infringement were subsequently committed by Indiana On Tap.

This lawsuit, filed December 4, 2015 by an Indiana copyright lawyer for Brick Shirt House, lists a single count: copyright infringement, which Plaintiffs state has been done willfully. Brick Shirt House seeks equitable relief, including impoundment; damages; costs and attorney’s fees.

December 7, 2015

Criminal Counterfeit Law: U.S. Marshals Selling Thousands of Bottles of Non-Counterfeit Wine of Convicted Wine Counterfeiter

By Overhauser Law Offices, LLC

Washington, D.C. – The U.S. Marshals are currently auctioning approximately 4,711 bottles of wine, deemed authentic, that belonged to Rudy Kurniawan, the man convicted of fraud in federal court in 2013 for producing and selling millions of dollars of counterfeit wine.

The wine is being sold in two online auctions, one that started November 24 and one that started December 1 at www.txauction.com. The auctions close on December 8 and December 15, respectively.

“It may sound ironic that we are selling wine that belonged to a convicted wine counterfeiter,” said Assistant Program Manager Jason Martinez of the U.S. Marshals Service Asset Forfeiture Division, “but we are duty-bound to recoup as much value from the sale of these authentic wines as possible to compensate those who were victims of his fraud.”