Blackberry Limited v. Typo Products, LLC, 14-cv-00023-WHO (Judge William Orrick)
Judge Orrick ordered Typo Products LLC last week to pay sanctions and attorneys' fees to BlackBerry Limited for disobeying the court's preliminary injunction order.
In March 2014, Judge Orrick enjoined Typo from distributing its add-on keyboard for the iPhone, which Blackberry alleged infringes its patents. After that order Typo sold 1,908 keyboards to another reseller and 16,829 to customers outside the United States, provided 369 warranty replacements, and referred six customers to other third parties to buy the enjoined keyboards. The court sanctioned Typo for these violations.
First, the Court rejected Typo's claim that its 1,908 keyboard sales to a reseller were "consignment sales" that did not violate the preliminary injunction order because they were delivered to the reseller before the injunction took effect. The Court noted that Typo could not get paid until after the reseller sold the keyboards and those payments occurred after the injunction, therefore the sales violated the preliminary injunction.
Second, the Court found that Typo's sales to retailers outside the United States violated the preliminary injunction because Typo took deliberate steps, all within the United States, to sell the keyboards after the injunction took effect. For example, Typo's CEO was located in the United States when he negotiated the sales, the invoices were prepared in the United States, the keyboards were shipped in the United States, and Typo received payments in its Wells Fargo account in Las Vegas.
Third, Typo's warranty replacements of defective keyboards after the injunction took effect was found to violate the injunction order. Further, Typo could not direct customers to other third parties to buy the enjoined keyboards because it would violate the injunction's prohibition on "marketing or promoting" the accused products.
And finally, Judge Orrick rejected Typo's argument that products that were transferred from the US to Canada for sale fell outside the scope of the injunction. He determined that because Typo is enjoined from taking steps within the United States to sell or offer to see these keyboards, it cannot evade the preliminary injunction by transferring enjoined products out of the US for sale.
In sum, the Court ordered Typo to pay almost $1 million in sanctions and Blackberry's attorneys' fees. The Court rejected Typo's claim that it did not willfully disobey the order because it reasonably relied on advice of counsel because the Court determined that Typo's activities plainly violated the injunction. The Court concluded that the sanctions order was appropriate given Typo's "not so clever attempts to evade the Court's preliminary injunction."
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