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U.S. Intellectual Property and New Media Law Update NOT SO WILLFUL INFRINGEMENT SecuraComm Consulting Inc. v. Securacom Inc. et al. (Third Cir. - January 20, 1999) VICTORIA'S SECRET IS? A&H Sportswear Inc. et al. v. Victoria's Secret Stores, Inc. et al. (Third Cir. - January 21, 1999) BLOWN AWAY (I) Netword, LLC v. Centraal Corporation (E.D. Va. - January 12, 1999) BLOWN AWAY (II) Pony Computer, Inc. v. Equus Computer Systems of Missouri, Inc., et al. (Eighth Cir. - December 11, 1998) BLOWN AWAY (III) Jet, Inc. v. Sewage Aeration Systems (Sixth Cir. - January 6, 1999) NOT SO WILLFUL INFRINGEMENT SecuraComm Consulting Inc. v. Securacom Inc. et al. (Third Cir. - January 20, 1999) Everyone in this suit is named SECURACOMM. One of the SECURACOMM's had a registration and it ended up winning below. The question before the Court is whether the Judge was right in finding the infringement willful and awarding attorneys' fees and profits. The Third Circuit found no direct evidence in the record that the losing party knew about the prevailing party, a small firm, before a cease and desist letter was sent by the prevailing party in 1993. There was also no circumstantial evidence of such knowledge. The only evidence on this issue was that an officer of the losing party knew of the prevailing party. The Plaintiff relied on the general principle that knowledge of a corporate officer is imputed to the corporation. The trouble with the argument is that the officer in question left the Defendant prior to a time when the marks became close enough to compete. When the officer had knowledge, Plaintiff's name was SecuraComm and Defendant's name was Burns & Roe Securacom. The conflict only readily became apparent when the Defendant changed its name from Burns & Roe Securacom to Securacom. Of interest is that the Third Circuit found that the Defendant's failure to conduct a trademark search was not sufficient to support a finding of willful infringement, distinguishing it from Tommy Hilfigerhttp://www.ipcounselors.com/19980622.htm), where the Second Circuit found that the failure to conduct a full trademark search was bad faith. The Third Circuit noted that in Hilfiger the attorney specifically advised it to conduct a full search and that the infringer was aware that it was copying "authentic details" from Plaintiff's design. Reading both cases looks like a real difference in approach which can't be paved over. Equally, the failure to stop use of the SecuraComm mark after notice was not bad faith. At that time there was no federally registered mark since the Defendant had failed to obtain a registration for Securacom due to applications from two other companies. There was also the question of whether until registration, SecuraComm had a national right. The Third Circuit thus found that the District Court abused its discretion in awarding a portion of Defendants' profits and attorneys' fees to Plaintiff. The decision can be reviewed at: http://caselaw.findlaw.com/cgi-bin/getcase.pl?court=3rd&navby=case&no=992043P VICTORIA'S SECRET IS? A&H Sportswear Inc. et al. v. Victoria's Secret Stores, Inc. et al. (Third Cir. - January 21, 1999) There is more than one breast related miracle. The story is a simple one. Plaintiff A&H made a structured women's swimsuit it called the MIRACLESUIT. Among other things, the swimsuit was a miracle in cleavage enhancement. Soon thereafter, Victoria's Secret came out with THE MIRACLE BRA. Plaintiff was content to allow the bra to co-exist until Victoria's Secret came out with THE MIRACLE BRA bikini swimsuit. When Victoria's Secret applied for registration of THE MIRACLE BRA trademark for swim wear, the Patent Office refused registration on the basis of Plaintiff's prior registration of the MIRACLESUIT. At that point the mammalian fat was in the fire and a suit ensued. Both the Court below and the Third Circuit find no likelihood of confusion. The Third Circuit repeatedly pointed out that the standard for infringement is "the likelihood of confusion." Some people have taken this repeated statement of the likelihood of confusion standard as a repudiation of the "possibility of confusion" standard which has permeated the Third Circuit for years. Under this doctrine, a second comer, particularly a knowing second comer, is held only to the "possibility of confusion" standard in determining infringement. No place in the decision does the Court discuss "possibility of confusion" other than mentioning briefly that the Plaintiff questioned the standard used below. This may, however, not be the death knell since "possibility of confusion" is usually applied where there was knowing copying. After wading through the Third Circuit's "Lapp factors" it found that there was no likelihood of confusion relying heavily on the fact that Victoria's Secret did not attempt to enhance its bra by adopting another's mark, but, in fact, innocently selected the name. Thus, the possibility for the "possibility of confusion" may remain. The decision can be reviewed at: http://caselaw.findlaw.com/cgi-bin/getcase.pl?court=3rd&navby=case&no=992048P BLOWN AWAY (I) Netword, LLC v. Centraal Corporation (E.D. Va. - January 12, 1999) Netword had a patent for a computer-based information retrieval system using aliases. Defendant, Centraal Corporation's system is called RealNames, an internet based system where a user visits a web site by entering an alias, such as IBM. RealNames then points the user to the home page for International Business Machine. The Court, in a ten-page opinion, essentially said, in much more polite words, the Plaintiff's attorney had simply not read its own patents and claims. The Court did not find the claim literally infringed, since some of the words were clearly defined in the specification, contrary to the meaning now asserted in the action. The Court also found that the prosecution history barred any interpretation which would include the Defendant's products. End result - no infringement and judgment in favor of the Defendant. The decision can be reviewed at: http://www.ipcounselors.com/netword.htm BLOWN AWAY (II) Pony Computer, Inc. v. Equus Computer Systems of Missouri, Inc., et al. (Eighth Cir. - December 11, 1998) This is one of those employees hired by the competitor cases. Here, the Plaintiff lost all the counts for failing to meet various elements of the different claims raised. The one interesting aspect of the case, other than an exploration of Missouri State Law, was that the finding that an employee, using a database which was password protected, did not put the employee on notice that the information was confidential in nature. "To base fiduciary responsibilities on passwords and limited file access would make nearly any employee with any controlled computer access a confidante". The decision can be reviewed at: http://caselaw.findlaw.com/cgi-bin/getcase.pl?court=8th&navby=case&no=981108P BLOWN AWAY (III) Jet, Inc. v. Sewage Aeration Systems (Sixth Cir. - January 6, 1999) Here, the Sixth Circuit confirmed a finding of one of its District Courts that JET and AEROB-A-JET were different in sight and appearance and, thus, there was no likelihood of confusion even though the products involved were directly competitive, stating ". . . a reasonable jury could not conclude that the marks JET and AEROB-A-JET are confusingly similar, and the very high degrees of care that purchasers in this market - - both contractors with the skills and responsibilities for installing home sewage treatment systems and homeowners spending hundreds or thousands of dollars to buy or repair such systems - - can be expected to exercise eliminates virtually any possibility that [Defendant's] use of AEROB-A-JET will cause confusion." An interesting side trip rises out of a concurrent claim for trademark dilution under the Ohio Act. The Trademark Dilution Act of 1995 provides that possession of a valid federal trademark registration is a complete bar to a dilution claim "under the common law or a statute of a State." The Plaintiff argued that the federal law does not apply retroactively and, thus, the Defendant is liable under the Ohio law for violations prior to the effective date of the statute of January, 1995. First, the Court noted that under Ohio law, the remedy for dilution is an injunction, not damages. It then went on to find that the state dilution bar holds, even if it is based on Defendant's conduct before the effective date of the Act. They then side stepped making a final decision on preemption. Since Plaintiff has successfully moved to cancel the Defendant's registration, the Court of Appeals then considered the Ohio dilution claim and found, under the Ohio statute, the marks would not be sufficiently similar to support a finding of dilution. As noted by the Court, what this comes down to would be a request by the Plaintiff to enjoin as diluting a vast number of registered trademarks containing the word "jet" used in unrelated industries. The decision can be reviewed at: http://caselaw.findlaw.com/cgi-bin/getcase.pl?court=6th&navby=case&no=990003p |
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