Indiana Intellectual Property Law News

March 4, 2015

Indiana Patent Litigation: TreeStuff Sued for Patent Infringement

Indianapolis, Indiana – An Indiana patent attorney for Sherrill, Inc. of Greensboro, North Carolina (“Sherrill”) filed a patent infringement complaint in the Southern District of Indiana alleging that TreeStuff, Inc. of Indianapolis, Indiana infringed Patent No. 5,887,577 entitled “Apparatus for Propelling a Projectile,” which has been registered by the U.S. Patent Office.

Plaintiff Sherrill asserts ownership by assignment to United States Patent No. 5,887,577 (“the ‘577 Patent”), which was issued to William T. Sherrill in 1999. It claims that TreeStuff manufactures, uses, offers for sale, and/or sells a product that infringes upon that patent, namely TreeStuff’s Stein Tekichu Throw Weight Launcher.

In November 2014, Sherrill sent a cease-and-desist letter to TreeStuff. In that letter, it identified the ‘577 Patent, stated that the Stein Tekichu Throw Weight Launcher infringed upon certain claims of the ‘577 Patent and demanded that TreeStuff cease all infringing activities.

Sherrill claims that TreeStuff did not respond to this letter but instead continued to use, offer to sell, and/or sell the accused product. Sherrill contends that, by engaging in these activities, TreeStuff has directly infringed, and will continue to directly infringe, at least claim 8 of the ‘577 Patent under 35 U.S.C. § 271(a) literally and/or under the doctrine of equivalents. Sherrill also suggests in its complaint that it is “reasonable to infer” that TreeStuff also intended to induce infringement. TreeStuff has also been accused of contributory infringement. Sherrill asserts that TreeStuff’s infringement has been and continues to be willful and deliberate.

In its complaint, filed by an Indiana patent attorney, Sherrill asks that the court:

• Declare that the ‘577 Patent was duly and legally issued, is valid and is enforceable;

• Enter judgment that defendant TreeStuff has infringed at least claim 8 of the ‘577 Patent;

• Enter judgment that defendant TreeStuff has induced infringement of at least claim 8 of the ‘577 Patent;

• Enter judgment that defendant TreeStuff has contributed to infringement of at least claim 8 of the ‘577 Patent;

• Enter a preliminary and permanent injunction enjoining defendant TreeStuff and its agents from any further sales or use of their infringing products and any other infringement of claims of the ‘577 Patent, whether direct or indirect, pursuant to 35 U.S.C. § 283;

• Award damages to compensate Sherrill for defendant TreeStuff’s infringement of the claims of the ‘577 Patent pursuant to 35 U.S.C. § 284;

• Award enhanced damages pursuant to 35 U.S.C. § 284;

• Award pre-judgment and post-judgment interest and costs to plaintiff Sherrill in accordance with 35 U.S.C. § 284; and

• Deem the case to be “exceptional” within the meaning of 35 U.S.C. § 285, entitling plaintiff Sherrill to an award of its reasonable attorney fees, expenses and costs in this action.

February 27, 2015

Copyright Law: Federal Circuit Upholds $540,000 in Royalties for USPS Copyright Infringement

By Overhauser Law Offices, LLC

Washington, D.C. – The United States Court of Appeals for the Federal Circuit affirmed a royalty award in Gaylord v. United States for copyright infringement committed by the United States Postal Service.

Frank Gaylord, a World War II veteran and renowned sculptor, created The Column, consisting of nineteen stainless steel statues depicting a squad of soldiers on patrol. This work, completed and dedicated in 1995, formed a central part of the Korean War Veterans Memorial located on the National Mall in Washington, D.C. For his efforts in creating the work, Gaylord was paid $775,000.

Shortly after the completion of the work, an amateur photographer named John Alli visited the Memorial during a heavy snowstorm and photographed The Column. In 2002, the United States Postal Service decided to issue a stamp to commemorate the upcoming fiftieth anniversary of the Korean War armistice. It settled on Alli’s photo of The Column for the stamp face and paid Alli a one-time fee for the right to use his photo. The Postal Service made no payment to Gaylord.

Gaylord sued for copyright infringement. The United States Court of Federal Claims acted as the trial court in the litigation. Twice prior to the instant appeal, an appeal was made to the Federal Circuit, first in 2010 and again in 2012. In Gaylord I, the Federal Circuit held that the government was liable to Gaylord for copyright infringement. Upon remand, the Court of Federal Claims awarded Gaylord a total of $5,000 to compensate for the infringement of his copyright. This award was vacated by the Federal Circuit in Gaylord II and the lawsuit remanded with instructions to “determine the fair market value of a license for Mr. Gaylord’s work based on a hypothetical negotiation with the government.”

Upon remand, the trial court split the calculations of damages for the infringement into three categories: (1) stamps used to send mail; (2) commercial merchandise featuring an image of the stamp; and (3) unused stamps purchased by collectors. The parties agreed that no damages would be paid for stamps used to send mail and that a royalty of 10% of revenues would be appropriate for commercial merchandise featuring the copyrighted work.

The only disputed issue was the appropriate measure of copyright infringement damages for the stamps purchased by collectors. The lower court determined that the Postal Service received $5.4 million in revenue, which was deemed “almost pure profit,” from these sales. It then found that an appropriate copyright royalty would be 10%, or $540,000.

At issue in this latest appeal, Gaylord III, is whether this royalty was appropriate. The Federal Circuit applied the “hypothetical negotiation” analysis in reviewing the Court of Federal Claims’ award to Gaylord, stating that “actual damages for copyright infringement may be based on a reasonable royalty representing the fair market value of a license covering the defendant’s use.” Determining that “fair market value,” in turn could be done employing a valuation tool used in the context of patent infringement litigation: a hypothetical negotiation that would determine “the reasonable license fee on which a willing buyer and a willing seller would have agreed for the use taken by the infringer.”

The Federal Circuit held that the lower court neither committed clear error nor abused its discretion in arriving at a 10% royalty rate affirmed the award of $540,000.

February 26, 2015

Copyright Litigation: Nike Sued for Infringement of Michael Jordan Photo – 1

By Overhauser Law Offices, LLC

Portland, Oregon – Copyright attorneys for Jacobus Rentmeester of Westhampton Beach, New York sued for copyright infringement in the District Court of Oregon, Portland Division alleging that Nike, Inc. of Beaverton, Oregon infringed Rentmeester’s copyrighted photo of Michael Jordan. This photo, Registration Number VA0001937374, has been registered with the U.S. Copyright Office.

Rentmeester, a New York photographer, commenced this litigation against Nike for Nike’s use of the iconic “Jumpman” photo in promoting its Jordan brand. In the lawsuit, Plaintiff Rentmeester contends that Nike directly, contributorily, and vicariously infringed his copyrighted image of Michael Jordan.

Rentmeester claims that he created the “Jordan Photo” for inclusion in a 1984 Olympic edition of Life Magazine, as part of a photo essay that he produced for the magazine. Among the athletes featured in Rentmeester’s photo essay, in addition to Jordan, were Carl Lewis and Greg Louganis.

At issue in this litigation is Rentmeester’s Jordan Photo. Rentmeester contends that he “conceived the central creative elements of the photograph.” These elements included portraying Jordan alone against the sky, “soar[ing] elegantly” and in a modified version of a grand jeté, a ballet jump during in which the person performs the splits in midair. According to the complaint, this type of jump was not typical for Jordan.

Rentmeester states that, after his photo was published, he agreed to accept a fee of $150 from Nike for temporary use of the photo for a “slide presentation only, no layouts or any other duplication.”

Nike later paid Rentmeester $15,000 for a limited license to use a modified work, although Plaintiff states that this agreement was reached only after Nike had already begun infringing use of the work and Rentmeester had complained to Nike of copyright infringement. Rentmeester contends that this license was limited to two years of use, on posters and billboards only, and for use within North America only. Rentmeester alleges that Nike exceeded the terms of that limited license by using the modified image other than on posters or billboards as well as outside North America. He also asserts that Nike’s use of the Jordan Photo constitutes willful copyright infringement as of the expiration of the license in 1987.

In the complaint, filed by copyright lawyers for Plaintiff, the following counts are enumerated:

• First Cause of Action: Copyright Infringement

• Second Cause of Action: Vicarious Copyright Infringement

• Third Cause of Action: Contributory Copyright Infringement

• Fourth Cause of Action: Violations of the Digital Millennium Copyright Act

Rentmeester, via his copyright attorneys, asks the court for a judgment of infringement; for an injunction; for impoundment of all infringing works; for actual and statutory damages, including profits attributable to infringement of Rentmeester’s copyright; for punitive damages; for a finding that neither Nike nor any independent infringers can assert copyright protection in any of the infringing works; and for costs and attorneys’ fees.

February 25, 2015

Indiana University to Host BioPharma/Tech Law Symposium

By Overhauser Law Offices, LLC

Indianapolis, Indiana – The Center for Intellectual Property Law and Innovation of the

Indiana University Robert H. McKinney School of Law will be hosting its Annual BioPharma/Tech Law Symposium on Thursday, March 12, 2015. CLE credit of 7.0 hours is pending approval.

Time: 8:00 a.m. – 5:30 p.m.

February 23, 2015

Trademark Law: Supreme Court Resolves Circuit Split – Trademark Tacking is a Jury Issue

By Overhauser Law Offices, LLC

Washington, D.C. – The United States Supreme Court held that in those cases in which summary disposition by the court is inappropriate, and where a jury has been empaneled, trademark tacking for purpose of determining priority is a question of fact for the jury to decide.

Hana Financial, Inc. and Hana Bank both provide financial services to individuals in the United States. Hana Bank was established in 1971 under the name Korea Investment Financial Corporation. It adopted the name “Hana Bank” for use in Korea in 1991. It began advertising in the United States as “Hana Overseas Korean Club” in 1994. This name was changed to “Hana World Center” in 2000. In 2002, it began banking under the name “Hana Bank” in the United States.

Hana Financial began using its name in 1995 in the United States. In 2007, it sued Hana Bank for trademark infringement. Hana Bank defended against this claim by invoking the tacking doctrine, under which a trademark user may make limited modifications to its trademark while retaining the priority provided by the initial trademark. The jury held for Hana Bank. On appeal, the Court of Appeals for the Ninth Circuit affirmed, concluding that tacking was a “highly fact-sensitive inquiry” that was properly the province of the jury.

Hana Financial appealed the issue of trademark tacking to the U.S. Supreme Court. In its opinion, the Court noted that lower courts have held that two marks may be tacked when they are considered to be “legal equivalents,” i.e., they “create the same, continuing commercial impression.” That “commercial impression,” in turn, “must be viewed through the eyes of a consumer.” Such an evaluation – designed to capture the impression which a trademark makes upon an ordinary consumer – “falls comfortably within the ken of a jury.”

The Court unanimously affirmed the Ninth Circuit, holding that “when a jury is to be empaneled and when the facts warrant neither summary judgment nor judgment as a matter of law, tacking is a question for the jury.”

February 20, 2015

United States Deposits Instrument of Ratification to Geneva Act of the Hague Agreement Concerning the International Registration of Industrial Designs

By Overhauser Law Offices, LLC

Washington, D.C. – The U.S. Department of Commerce’s United States Patent and Trademark Office (“USPTO”) recently announced that the United States has deposited its instrument of ratification to the Geneva Act of the Hague Agreement Concerning the International Registration of Industrial Designs (“Hague Agreement”) with the World Intellectual Property Organization (“WIPO”) in Geneva, Switzerland. This marks the last step in the membership process for the United States to become a Member of the Hague Union. The treaty will go into effect for the United States on May 13, 2015.

Currently, U.S. applicants wishing to pursue protection for industrial designs in multiple jurisdictions must file individual applications in each of the respective jurisdictions where industrial design rights are desired. When the Hague Agreement enters into force for the United States, it will be possible for U.S. applicants to file a single international design application either with WIPO in Geneva, Switzerland, or the USPTO to obtain protection in multiple economies. The Hague system for the protection of industrial designs provides a practical solution for registering up to 100 designs in over 62 territories with the filing of one single international application.

“U.S. accession to the Geneva Act of the Hague Agreement will provide applicants with the opportunity for improved efficiencies and cost savings in protecting their innovative designs in the global economy,” said Deputy Under Secretary for Commerce for Intellectual Property and Deputy Director of the USPTO Michelle K. Lee. “We are extremely excited about joining the Hague Union and contributing to the continued expansion and development of the Hague system which facilitates protection of industrial designs in design registration and examination systems alike.”

February 19, 2015

Indiana Trademark Law: Court Strikes Response Brief Due to Untimely, Overlong Filing

By Overhauser Law Offices, LLC

Indianapolis, Indiana – Judge Tanya Walton Pratt (pictured) of the Southern District of Indiana struck a response brief in the matter of Wine & Canvas Development, LLC. v. Theodore Weisser, Christopher Muylle, YN Canvas CA, LLC and Art Uncorked, noting that the brief was both late and longer than permitted.

In 2011, Wine & Canvas Development, LLC (“Wine & Canvas”) sued Muylle and others alleging the wrongful use of Wine and Canvas trademarks as well as the breach of non-competition agreements. Muylle counterclaimed against Wine and Canvas asserting abuse of process. In November 2014, after a four-day trial, the jury found for Muylle on all claims and awarded him $270,000.

After the conclusion of the trial, the Indiana trademark lawyer for Muylle petitioned the court for attorneys’ fees under § 1117(a) of the Lanham act, which provides that the court may award reasonable attorney fees to the prevailing party in “exceptional cases.” Muylle, via his trademark attorney, contended that this case was properly deemed exceptional as a result of the jury’s finding of abuse of process by Wine & Canvas. Muylle also noted that “the Court previously determined that ‘Wine & Canvas, Mr. Scott, [Ms. McCracken], and Mr. McCracken have flooded the Court with filings which has increased the work expended on the case and Wine & Canvas has filed numerous claims that the Court has found to be without merit.’ … And the Court has already sanctioned the Plaintiff not once but three times for failing to comply with discovery or court rules.” Muylle asked for $175,882.68 in attorneys’ fees.

Wine & Canvas asked for an extension of time to respond to this request, to January 15, 2015, which the court granted. Wine & Canvas subsequently requested an additional extension of time to file its response, specifically asking for a new deadline of January 19, 2015. The court granted this request, also.

Wine & Canvas filed its response brief on January 20, 2015. Muylle’s trademark attorney asked the court to strike that brief. The court noted that “[Wine & Canvas’] counsel’s repeated disregard for and supposed ignorance of the rules is no excuse, and an apology does not allow counsel to continue to disregard the rules and court orders” and admonished the trademark lawyer for Wine & Canvas for failing to meet his filing deadlines.

The court also noted that, in addition to the untimeliness of the filing, the 40-page brief was also overlong in violation of Local Rule 7-1(e)(1), which limits the length of response briefs to 35 pages.

Consequently, the court granted the motion to strike Wine & Canvas’ response brief. The court, however, also granted Wine & Canvas leave to file a belated response to Muylle’s petition for attorneys’ fees.

February 18, 2015

Indiana Trademark Litigation: Agdia Sues AC Diagnostics Alleging Deceptive Meta-tags and Other Trademark Harm

By Overhauser Law Offices, LLC

South Bend, Indiana – Indiana trademark attorneys for Agdia Inc. of Elkhart, Indiana sued in the Northern District of Indiana alleging that Jun Q. Xia and AC Diagnostics, Inc. of Fayetteville, Arkansas infringed the trademark AGDIA®, which has been registered as United States Trademark Registration No. 1747994.

For over 30 years, Plaintiff Agdia has been in the business of supplying testing, test kits, and associated products and services related to the presence of pathogens or quality factors in agricultural products. Agdia has sued a former employee, Jun Q. Xia, alleging violations of federal and Indiana intellectual property law. AC Diagnostics, a competing enterprise formed by Xia, has also been named as a defendant in this lawsuit.

Agdia contends that Defendants have been unlawfully using its trademarked name. Among the claims is that Xia has hidden the Agdia trademark followed by the phrase “plant diagnostics,” in the meta tags of nearly every product page associated with the AC Diagnostics website. Agdia asserts that, as an example, the “Company Profiles” section of the AC Diagnostics website, available at http://www.acdiainc.com/Comprofil.htm, appears upon first glance to provide nothing more than company information. However, if the page is printed, Agdia states that it reveals more text at the bottom of the document, hidden as white text on a white background.

Agdia also asserts that, through the AC Diagnostics website, Xia is deceptively and unfairly trading on Agdia’s name by hiding that name, followed by the phrase “plant diagnostics,” in the meta tags of nearly every product page associated with that site. Agdia contends that no fewer than 200 separate URLs from the Defendants’ website use the Agdia name deceptively.

Agdia finally cites the name of AC Diagnostic’s webpage as deceptive, claiming that “acdiainc,” which is used within www.acdiainc.com, AC Diagnostic’s website, is just one letter off from Agdia’s legal name, “Agdia Inc.” Defendants are accused of using this web address with the bad faith intent to profit from the Agdia trademark.

In a five-count complaint, filed by Indiana trademark lawyers for Agdia, Defendants are accused of willful, intentional, and unauthorized use of the Agdia trademark that is unlawful under federal law as well as Indiana state law.

Plaintiff Agdia asks the court to enjoin Defendants from using the Agdia mark; to cancel the domain www.acdiainc.com or transfer it to Agdia; for damages, including treble damages; and for attorneys’ fees and costs.

February 16, 2015

Third Member of International Computer Hacking Ring Pleads Guilty to Hacking and Conspiracy to Steal Intellectual Property; Charges Against Indiana Defendant Pending

By Overhauser Law Offices, LLC

Delaware – A third member of an international computer hacking ring has pleaded guilty to conspiring to break into computer networks of prominent technology companies to steal more than $100 million in intellectual property and other proprietary data.

Nathan Leroux, 20, of Bowie, Maryland, pleaded guilty to conspiracy to commit computer intrusions and criminal copyright infringement based on his role in the cyber theft of software and data related to the Xbox One gaming console and Xbox Live online gaming system, and popular games such as the “FIFA” online soccer series; “Call of Duty: Modern Warfare 3;” and “Gears of War 3.” Leroux has been in custody since attempting to flee into Canada from Buffalo, New York, on June 16, 2014. A sentencing hearing is set before U.S. District Judge Gregory M. Sleet of the District of Delaware on May 14, 2015.

Sanadodeh Nesheiwat, 28, of Washington, New Jersey, and David Pokora, 22, of Mississauga, Ontario, Canada, previously pleaded guilty to the same conspiracy charge on Sept. 30, 2014. They remain in custody pending their sentencing hearings, which are scheduled for April 2015. Pokora’s guilty plea is believed to have been the first conviction of a foreign-based individual for hacking into U.S. businesses to steal trade secret information. Charges against a fourth defendant, Austin Alcala, 19, of McCordsville, Indiana, remain pending.

According to Leroux’s admissions in connection with his guilty plea, he was part of the hacking conspiracy between January 2011 and September 2012. During that period, hacking group members located in the United States and abroad gained unauthorized access to computer networks of various companies, including Microsoft Corporation, Epic Games Inc., Valve Corporation and Zombie Studios. The conspirators accessed and stole unreleased software, software source code, trade secrets, copyrighted and pre-release works, and other confidential and proprietary information. Members of the conspiracy also allegedly stole financial and other sensitive information relating to the companies – but not their customers – and certain employees of such companies.

Specifically, the data theft targeted software development networks containing source code, technical specifications and related information for Microsoft’s then-unreleased Xbox One gaming console, as well as intellectual property and proprietary data related to Xbox Live and games developed for that online gaming system.

Leroux admitted in court that he and others used the stolen intellectual property to build, and attempt to sell, counterfeit versions of the Xbox One console before its public release in November 2013. In July 2013, the FBI intercepted a counterfeit console built by Leroux, which was destined for the Republic of Seychelles.

Leroux also admitted that he developed a software exploit that allowed him and others to generate millions of “coins” for the FIFA soccer games playable on the Xbox Live platform. These coins are the virtual, in-game currency used to build a “FIFA Ultimate Team” in the games. Without the authorization of Electronic Arts, the intellectual property rights holder to the FIFA games, Leroux and others sold bulk quantities of the “FIFA coins” via online black markets.

The value of the intellectual property and other data stolen by the hacking ring, as well as the costs associated with the victims’ responses to the conduct, is estimated to range between $100 million and $200 million. To date, the United States has seized over $620,000 in cash and other proceeds related to the charged conduct.

This case was investigated by the FBI, with assistance from the Criminal Division’s Office of International Affairs, the U.S. Department of Homeland Security’s Homeland Security Investigations and Customs and Border Patrol, and the U.S. Postal Inspection Service. The investigation also has been coordinated with the Western Australia Police and the Peel Regional Police of Ontario, Canada.

The case is being prosecuted by Trial Attorney James Silver of the Criminal Division’s Computer Crime and Intellectual Property Section and Assistant U.S. Attorney Edward J. McAndrew of the District of Delaware.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Charles M. Oberly III of the District of Delaware and Special Agent in Charge Stephen E. Vogt of the FBI’s Baltimore Field Office made the announcement.

February 13, 2015

Indiana Trademark Law: Consent Judgment Entered Enjoining Chanel’s Salon from Using “Chanel” in Business Name

By Overhauser Law Offices, LLC

Hammond, Indiana – Chanel’s Salon, LLC, d/b/a Chanel’s Salon and Chanel’s Cosmetology Salon, and Chanel Jones, all of Merrillville, Indiana, entered into a consent judgment with Chanel, Inc. of New York, New York to resolve ongoing trademark disputes regarding the trademarked term CHANEL®.

Indiana trademark attorneys for fashion-and-beauty giant Chanel, Inc. had sued in the Northern District of Indiana alleging that Chanel’s Salon, LLC and Chanel Jones had infringed and were infringing the trademark CHANEL, Registration Nos. 302,690; 510,992; 1,263,845; 1,348,842; 1,464,711; 1,559,404; 1,660,866; 3,134,695; and 4,105,557, which have been registered by the U.S. Patent and Trademark Office.

In this Indiana lawsuit, Chanel, Inc. alleged trademark infringement, trademark dilution, unfair competition under federal law as well as trademark infringement and unfair competition under Indiana state law. Chanel, Inc. claimed that its intellectual property rights to its trademark CHANEL had been infringed and diluted by actions of Defendants Chanel’s Salon, an Indiana beauty salon, and its owner Chanel Jones.

Specifically, Defendants were accused of using the trade names CHANEL’S SALON and/or CHANEL’S COSMETOLOGY SALON in connection with their beauty salon without Chanel’s authorization. Chanel, Inc. also claimed that the Defendants were infringing and diluting the CHANEL trademark by, inter alia, offering goods and services that are related to those offered under the CHANEL mark, including cosmetics, beauty consultation services and hair accessories.

This litigation ended pursuant to a consent judgment crafted by the parties and entered by the Indiana district court. As part of the consent judgment, the court issued a permanent injunction prohibiting Jones from using CHANEL to identify her beauty salon or any other enterprises, services or products. Jones was also enjoined from any use of the term CHANEL as part of any keyword, meta tag, page tag, or source code in any business marketing.

The order in this intellectual property litigation was issued by Judge Theresa L. Springmann in the Northern District of Indiana. This case is: Chanel, Inc. v. Chanel’s Salon LLC et al., Case No. 2:14-cv-00304-TLS-PRC.