Originally published February/March 2010
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In this February and March 2010 issue of the Patent and Trademark Bulletin for the District of Massachusetts:
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PATENT
Bose Corp. v. Lightspeed Aviation, Inc., Civil Action No. 09-10222-WGY, Memorandum and Order (D. Mass. March 4, 2010) (Young, D.J.) [Rule 12(b)(6) and Rule 12(f) Motions].
The District Court (Young, D.J) granted in part and denied in part the motion of Plaintiff Bose Corp. ("Bose") to dismiss and/or to strike three counterclaims—one to cancel Bose's trademark and two for inequitable conduct during patent prosecution—brought by Lightspeed Aviation, Inc. ("Lightspeed").
Bose filed suit against defendant Lightspeed alleging that Lightspeed's Zulu ANR Aviation headsets infringe U.S. Patent No. 5,181,252, entitled "High Compliance Headphone Driving" (the "'252 patent"). Lightspeed responded to the complaint and filed a single counterclaim, claiming that Bose breached a settlement agreement from a prior trademark infringement suit involving the parties. Lightspeed subsequently amended its answer to include four additional counterclaims. Bose moved to dismiss three of the counterclaims that were filed in Lightspeed's amended answer pursuant to Federal Rules of Civil Procedure 12(b)(6) and 12(f).
Bose moved to strike Lightspeed's counterclaim requesting the court to cancel Bose's "QUIETCOMFORT" trademark. In the earlier trademark infringement suit, Lightspeed alleged that it's use of the mark "QUIET COMFORT" was senior to Bose's mark "QUIETCOMFORT." In the settlement agreement, Lightspeed agreed to phase out use of its own QUIET COMFORT mark. In return, Bose agreed not to sue Lightspeed for any patent currently owned by Bose "based on any future improvements of . . . ANR models so long as those improvements bear no material relationship to the claim limitations of the 5,181,252 patent." Lightspeed, therefore, counterclaimed that "but for the Settlement Agreement . . . Bose's mark QUIETCOMFORT would have been cancelled" in the prior trademark case. The QUITECOMFORT mark, however, had been used commercially for more than five years. As a result, it had achieved incontestable status pursuant to 15 U.S.C. 1115(b) and, accordingly, could not be subject to a breach of contract defense. The court therefore dismissed Lightspeed's counterclaim to cancel the mark on a breach of contract theory.
Bose also moved to dismiss Lightspeed's inequitable conduct counterclaim. Lightspeed alleged that Bose removed one of the named inventors during prosecution of the application that resulted in the '252 patent in order to overcome a prior art rejection, and further, that Bose subsequently admitted that the removed inventor was an inventor of at least one of the issued claims of the '252 patent. Because a court "must accept all factual averments in the counterclaim as true," the District Court found that Lightspeed's counterclaim sufficiently alleged that the '252 patent was unenforceable due to material misrepresentations made to the PTO with an intent to deceive and, therefore, denied Bose's motion. It also denied Bose's Fed. R. Civ. P. 12(f) motion to strike. Rule 12(f), although generally disfavored, allows a court to "strike from a pleading an insufficient defense or any redundant, immaterial, impertinent, or scandalous matter." The District Court denied the motion to strike because "Bose has failed to demonstrate any prejudice under this claim, and has similarly failed to show that it was 'beyond cavil' that Lightspeed could not prevail on this claim." Similarly, the court denied Bose's motions to dismiss and/or to strike Lightspeed's other inequitable conduct counterclaim, which alleged that Bose failed to disclose the public use of a noise-cancelling headset that incorporated the invention underlying the '252 patent more than one year prior to the filing date of the application for the patent-in-suit.
OrbusNeich Medical Co., Ltd., BVI and OrbusNeich Medical, Inc. v. Boston Scientific Corp., Civil Action No. 09-10962-JLT, 2010 U.S. Dist. LEXIS 25564 (D. Mass. Mar. 18, 2010) (Tauro, J.) [Motion to Dismiss].
The District Court (Tauro, D.J.) allowed in part and denied in part the motion of defendant Boston Scientific Corporation ("BSC") to dismiss the non-patent claims of Plaintiffs OrbusNeich Medical Co. Ltd., BVI and OrbusNeich Medical, Inc. (collectively "Orbus").
This lawsuit arose out of a potential joint venture between the parties involving luminal stents, which are used to treat coronary artery disease. To that end, the parties had entered into a Confidential Disclosure Agreement ("CDA"), which stated that it would be governed by Massachusetts law, pursuant to which Orbus provided BSC with certain trade secrets. After evaluating Orbus's materials, BSC declined to pursue a business arrangement with Orbus. Orbus alleged that BSC later misappropriated its confidential information and breached the CDA by disclosing that information in a patent application regarding a stent published in 2002.
Orbus originally sued BSC in the U.S. District Court for the Eastern District of Virginia, but that court granted BSC's motion to transfer venue to the District of Massachusetts. The complaint asserted seven non-patent claims against BSC: breach of contract; breach of the implied covenant of good faith and fair dealing; misappropriation of trade secrets; unjust enrichment; fraud; unfair and deceptive trade practices in violation of G.L. c. 93A; and unfair competition. BSC moved to dismiss these claims, arguing that each is barred by the applicable statutes of limitation, that the unjust enrichment and common law unfair competition claims fail as a matter of law, and that Orbus failed to plead the fraud claim with the requisite particularity under Fed. R. Civ. P. 9(b). BSC relied on several documents outside the pleadings in support of its motion, which Orbus moved to strike as not properly before the court at the motion to dismiss stage. The court allowed in part and denied in part Orbus's motion to strike and then turned to the motion to dismiss.
With respect to BSC's statute of limitations argument, the court first concluded that Massachusetts statute of limitations law applied given the choice-of-law provision in the CDA. It held that Orbus's non-patent law claims were not barred by the applicable statutes of limitation because, under Massachusetts' discovery rule, they did not accrue until Orbus discovered the offending BSC patent application (and other materials). The court found that Orbus had no reason to suspect a potential misappropriation of its confidential information such that it was under a duty to investigate the contents of BSC's published patent applications or annual report back in 2002 (more than six years before Orbus filed its complaint).
The court dismissed the unjust enrichment claim because the subject matter of that claim was governed by a valid written contract between the parties—the CDA. It declined to dismiss the common law unfair competition claim as subsumed by the Chapter 93A claim. Last, the court dismissed Orbus's fraud claim for failure to plead with particularity because it did not identify the time, place and content of the false representations BSC allegedly made to Orbus.
Ambit Corp. v. Delta Air Lines, Inc., C.A. No. 09-10217-WGY, 2010 U.S. Dist. LEXIS 27333 (D. Mass. March 23, 2010) (Young, D.J.) [Summary Judgment of Obviousness].
After consideration of additional briefing by the parties, the District Court (Young, D.J.) decided not to enter summary judgment of non-obviousness sua sponte.
The last edition of the bulletin reported on Judge Young's opinion in which he found the evidence of invalidity presented by Defendant Delta Air Lines, Inc. ("Delta") so scant as to warrant summary adjudication that the patent-in-suit is valid. Since that time, Delta has submitted additional briefing as well as a new, voluminous expert declaration.
First, the court revisited its concern of the tension between Federal Circuit jurisprudence and the Federal Rules of Evidence concerning expert testimony. See NewRiver, Inc. v. Newkirk Prods., Inc., No. 06-12146, 2009 U.S. LEXIS 117306 (D. Mass. Dec. 16, 2009) (summary in Oct., Nov., Dec. 2009/Jan. 2010 bulletin). It then sets forth three essential inquiries the court must consider—whether or not a party raises them—in dispatching its role as gatekeeper. They are as follows: (1) Is this junk science?; (2) Is this a junk scientist?; and (3) Is this a junk opinion? The tension arises because, while these are questions of fact typically reviewed under an abuse of discretion standard, the Federal Circuit's explication of the elements for a qualified expert opinion on anticipation, obviousness, and equivalents are reviewed de novo.
Second, the court provided a specific warning to parties moving for summary judgment:
It is important that the patent bar understand that, should they move for summary judgment upon an issue as to which they bear the burden of proof, it behooves them to lay every bit of evidence before the court—once; well knowing that failure puts the moving party at risk of judgment on the issue being taken against them and the issue dropping out of the case.
Third, the court reviewed Delta's additional evidence of obviousness. Although the expert declaration was somewhat conclusory, the court held that "Delta's submission suffices, albeit barely, to constitute sufficient evidence to support the possibility that a reasonable jury could find in its favor on the issue of obviousness.
Bio-Mimetics, Inc. v. Columbia Laboratories, Inc., Civil Action No. 07-12389-RGS (D. Mass. March 31, 2010) (Stearns, D.J.) [Contracts, Patent Improvements; Inventorship].
The District Court (Stearns, D.J.) ruled on summary judgment motions by both Plaintiff Bio-Mimetics, Inc. ("Bio-Mimetics") and Defendant Columbia Laboratories, Inc. ("Columbia"). Both parties moved for summary judgment on a breach of contact claim, while Columbia also moved for summary judgment with respect to a correction of inventorship claim and a claim under M.G.L. c. 93A for unfair and deceptive trade practices tied to inventorship. The court denied both parties' motions with respect to the breach of contract claim, determining that it was an issue for the jury. It, however, granted Columbia's motions with respect to the inventorship and 93A claims. The court found that Bio-Mimetics failed to establish it had an interest in the patents in question, and even if it did, that it failed to provide enough evidence to show the alleged inventor was indeed an inventor.
Bio-Mimetics owned U.S. Patent No. 4,615,697 ("the '697 patent"), which is directed to a drug delivery system that gradually releases a treating agent into a targeted area in the body, also referred to as BDS technology. Bio-Mimetics licensed the '697 patent to Columbia. When the last of the foreign patent rights related to the '697 patent expired, Columbia stopped paying royalties to Bio-Mimetics. While the parties dispute the interpretation of various portions of the license, the summary judgment decision turned on whether two patents that issued later, U.S. Patent No. 5,543,150 ("the '150 patent") and U.S. Patent No. 6,248,358 ("the '358 patent"), were subject to the terms of the license. These two patents were related to the sale of the drugs CIRNONE and STRIANT. The license included language that indicated that the intellectual property that was licensed included improvements. Bio-Mimetics argued that the '150 and '358 patents were both subject to the license, and thus it continued to be entitled to a royalty based on the sale of CRINONE and STRIANT. Columbia disagreed, arguing that the '150 and '358 patents did not qualify as improvements of the '697 patent, and thus the sale of the drugs did not fall under the license.
The court found that determining whether CIRNONE and STRIANT are improvements of the '697 patent was a question of fact for the jury. It noted that an improvement must have a foundation in the originally scheduled intellectual property. However, whether CIRNONE and STRIANT were improvements required factual findings.
In ruling in favor of Columbia with respect to the inventorship and 93A claims, the court found that Bio-Mimetics was unable to establish that it would have an interest in either the '150 and '358 patents even if the sole, now deceased inventor of the '697 patent, Professor Joseph R. Robinson, was found to be an inventor. Bio-Mimetics failed to name the Robinson's estate in the suit, and the court considered it too late to further amend the complaint. Regardless, the court noted that Bio-Mimetics' sole theory for claiming inventorship by Robinson was speculation that he might have been involved in the invention when he worked at Columbia. This "wholly unsubstantiated" argument was not persuasive. Accordingly, the court granted Columbia's summary judgment motions with respect to the inventorship and 93A claims.
TRADEMARK
Voice of the Arab World, Inc. v. MDTV Medical News Now, Inc., No. 09-11505-GAO, 2010 U.S. Dist. LEXIS 16981 (D. Mass. February 5, 2010) (O'Toole, D.J.) [Preliminary Injunction].
Voice of the Arab World, Inc. ("VOAW") commenced this action, seeking declaratory judgments that (a) it did not infringe upon MDTV Medical News Now, Inc.'s ("Medical News Now") registered trademark "MDTV", (b) its use of "MDTV" did not constitute unlawful cybersquatting, and (c) it has a right to use the "MDTV" mark. Medical News Now counterclaimed for trademark infringement, unfair competition, and cybersquatting. Before the court was Medical News Now's motion for a preliminary injunction, which the District Court (O'Toole, D.J.) granted.
Medical News Now is a medical news organization. In particular, it is known for the production of a television program concerning medical-related topics that has aired since 1998. Medical News Now owns the U.S. trademark for "MDTV;" the application was filed in 1998, and the registration was issued in 2002.
VOAW also seeks to provide medical-related information, though more specifically to Arab countries. In 2000, VOAW applied for a U.S. trademark for "MDTV." Although the application was originally denied in 2003 because of Medical News Now's previously registered mark, it was later approved in 2008. It is unclear why the mark was ultimately registered.
In 1998 and 1999, VOAW registered multiple domain names which included "mdtv," such as mdtv.net, mdtv.org, and mdtv.com. Until August 2009, these were static webpages that were specifically directed at the Arab and Muslim world. Because these webpages were specifically directed at Arab and Muslim audiences, Medical News Now did not consider them to be competitively damaging. However, in August 2009, VOAW allegedly broadened the scope of its services and deleted the language in the internet sites that limited its audience to the Arab and Muslim world. Once these changes were made, Medical News Now felt that there was a danger of confusion.
The court agreed with Medical News Now that VOAW's website alterations in 2009 increased the likelihood of confusion. When analyzing the potential confusion, the court highlighted the fact that the marks were identical and the services and target markets were similar. Though both parties had registered the mark "MDTV," Medical News Now had registered it first and showed a long history of continuously exploiting the mark commercially. The court admitted that Medical New Now's mark was a descriptive mark, and thus, relatively weak. But nevertheless, the court found that the factors weighed in favor of a finding of likelihood of confusion. And since VOAW failed to rebut the presumption of irreparable harm, the court granted the preliminary injunction.
Shelby v. Factory Five Racing, Inc., No. 09-CV-10281-PBS, 2010 U.S. Dist. LEXIS 14104 (Feb. 16, 2010) (Saris, D.J.) [Motion to Dismiss].
Claims brought for trademark and trade dress infringement by Plaintiff Carroll Shelby ("Shelby")— renowned race car driver—were dismissed against Defendant Factory Five Racing ("FFR") under the theory of res judicata. The District Court (Saris, D.J.), however, denied the motion to dismiss of Defendant Internet Community Partners, LLC ("ICP").
Shelby designed several racing and production cars, known as "Shelby Cobras," following his retirement from racing in the 1960s. He and his related commercial entities own or are the licensees of various trademarks, including "Shelby," "289," "COBRA," and "427 S/C."
FFR manufactures and sells kit car replicas of the Shelby vehicles through, among other channels, its website www.factoryfive.com. That website contains a link to the ICP's website, www.ffcobra.com.
This case is the second lawsuit for trademark and trade dress infringement brought by Shelby against FFR. The original 2000 suit was ultimately settled and that settlement included entry of a final judgment precluding, among other things, FFR from using certain of Shelby's trademarks on or in connection with the sale of its kit cars.
The District Court held that as a result of the prior litigation and settlement between the parties Shelby's claims against FFR are barred by the doctrine of res judicata. It found that "Shelby's Daytona Coupe claims could have been raised in the prior litigation" even though they were not. Specifically, the court noted that Shelby had the facts necessary to assert the belated claims at the time of the original lawsuit as demonstrated by the inclusion of references to the potentially infringing design of the Type 65 Coupe in the 2002 settlement agreement. Moreover, the court rejected Shelby's continuing torts theory. Shelby's failure to reserve rights as to future infringement of the already existing designs proved to be fatal to his maintenance of this second action.
In addition to claims trade dress and trademark actions arising from FFR's kit cars, Shelby brought a claim for trademark infringement based on the inclusion of Shelby's trademarks in the metatags of the website www.factoryfive.com as well as for the link to ICP's website. Under the settlement agreement, Shelby was required to provide notice and a thirty day opportunity to cure in advance of litigation. Because Shelby failed to provide that notice to FFR, these later claims too were dismissed although without prejudice.
ICP's motion to dismiss was quickly disposed of by citing to the well-established elements of a claim for trademark infringement and trademark dilution under 15 U.S.C. § 1125(a) and (c), respectively. Drawing all inferences in favor of Shelby, the court held that he had adequately stated his claims.
Nutter's Patent and Trademark Bulletin for the District of Massachusetts is a publication of the Intellectual Property Litigation Practice of Nutter McClennen & Fish LLP in Boston. The bulletin is edited by Timothy D. Johnston and Heather B. Repicky. Assistance in the preparation of this issue was provided by Ronald E. Cahill, Shane Early, Gabriella K. Eisner, Rory P. Pheiffer, and Andrew Schultz.
This update is for information purposes only and should not be construed as legal advice on any specific facts or circumstances. Under the rules of the Supreme Judicial Court of Massachusetts, this material may be considered as advertising.
