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U.S. Intellectual Property and New Media Law Update THE GOOD, THE BAD AND THE UGLY: LOSING DEFENDANT’S LITIGATION MISCONDUCT MAY AFFECT AWARD OF COSTS IN A TRADEMARK INFRINGEMENT ACTION Te-Ta-Ma Truth Foundation-Family of Uri, Inc. v. The World Church of the Creator, (Seventh Cir., December 2004) A BLACK EYE FOR BLACKBERRY NTP Inc. versus Research In Motion Ltd., (Fed. Cir., December, 2004) THE FAIR USE DEFENSE SUCCESSFUL - LASTING TO KISS AND MAKE UP WITH RIVAL KP Permanent Make-Up, Inc. v. Lasting Impression I, Inc., (Sup. Ct., December 8, 2004) THE GOOD, THE BAD AND THE UGLY: LOSING DEFENDANT’S LITIGATION MISCONDUCT MAY AFFECT AWARD OF COSTS IN A TRADEMARK INFRINGEMENT ACTION Te-Ta-Ma Truth Foundation-Family of Uri, Inc. v. The World Church of the Creator, (Seventh Cir., December 2004) The plaintiff religious foundation brought a successful trademark infringement action against the defendant church (in reality, a white supremacist group) based on defendant's infringement of plaintiff's trademark registration for CHURCH OF THE CREATOR. Plaintiffs had become aware of defendant's infringement after defendants had made considerable public use of the name, including appearances on the Jerry Springer Show. Plaintiff filed a motion to have the case declared "exceptional", seeking an award of costs due to constant harassment by the defendant during the case, which included deluging plaintiffs and their attorneys with phone calls and messages, many of an obscene and overtly threatening nature. However, the district court denied plaintiff's motion, finding that, although defendant's conduct during litigation was "ugly, even threatening...and reprehensible", s.1117(a) of the Lanham Act only allowed a court to shift fees where the losing defendant's acts of infringement were wilful and deliberate. On appeal, the Seventh Circuit Court of Appeals reversed and remanded, rejecting such a narrow interpretation of the fee shifting provision of the Lanham Act. The court ruled that under s.1117(a), a judge has broad discretionary powers in considering which factors make a case "exceptional" and justify an award of fees in favor of either the prevailing or losing party. In reviewing the authorities, the court noted that a 'dual standard' had previously been employed by federal courts in a number of cases, whereby a "prevailing plaintiff must show culpability with respect to the defendant's infringement, while on the other hand, a prevailing defendant must show that the plaintiff's litigation conduct was oppressive." Citing the Supreme Court decision in Fogerty v. Fantasy, Inc., 510 U.S. 517 (1994), a copyright case, the court rejected such a dual standard as incompatible with the party neutral approach espoused in Fogerty. In looking at the legislative history and subsequent interpretations of the fee shifting provision of the Lanham Act, the court noted that "exceptional case" had not been specifically defined. Therefore, culpable conduct justifying an award of fees need not be confined to acts of wilful infringement on the part of the defendant. In this case there was considerable evidence that the defendants and its members had engaged in a large-scale organized campaign of harassment and intimidation, including, among other activities, a constant barrage of calls and emails to the plaintiffs and their attorneys, many involving specific threats of violence. Indeed, the leader of the defendant church was tried separately and convicted of, among other offenses, soliciting the murder of the judge! The court therefore had little difficulty in concluding that the defendant's "vexatious litigation conduct" (to put it mildly), was sufficiently egregious to make the case an extreme one, justifying an award of fees in favor of the plaintiff. The decision can be viewed at: http://caselaw.lp.findlaw.com/data2/circs/7th/034085p.pdf A BLACK EYE FOR BLACKBERRY NTP Inc. versus Research In Motion Ltd., (Fed. Cir., December, 2004) Patent holding company NTP Inc. (NTP), which sued "Blackberry" brand communicator manufacturer Research In Motion, Ltd. (RIM), has prevailed on appeal of its earlier victory against RIM. Plaintiff NTP, the owner of patents for a method of enabling mobile users to receive email over a wireless network, had sued RIM for infringement, and had won at trial below, in the US District Court. RIM appealed to the Federal Circuit (CAFC), alleging, inter alia, that: (1) RIM could not be liable for infringement, because both it and the computers it uses to process Blackberry email are located in Canada, i.e. outside the jurisdiction of United States patent law, and (2) the lower court had misconstrued some disputed patent terms, e.g. "originating processor". The CAFC ruled that: (1) The United States had jurisdiction, holding that "[a]lthough RIM's Relay . . . [computer], which is located in Canada, is the only component that satisfies the . . [necessary] limitation in the asserted claims, because all of the other components of RIM's accused system is located in the United States, and the control and beneficial use of RIM's system occur in the United States, we conclude that the situs of the "use" of RIM's system for purposes of [US patent infringement law] section 271(a) is the United States." (2) The lower " . . . district court erred in construing the claim term ''originating processor,'' but did not err in construing any of the other claim terms on appeal. . . and correctly found infringement under 35 U.S.C. §§ 271(a). . ."" Thus, although NTP did not have total victory, since the CAFC sent part of the case back to the district court for further proceedings, it did have considerable victory, since the CAFC upheld the judgment of infringement against RIM –– a judgment of some fifty-three million dollars (USD$53M). Thus, RIM has emerged the overall loser of this appeal. (And although not explicitly stated in the ruling, it seems clear that RIM will have to pay the fifty-three million, not in Canadian dollars, but in US greenbacks!) The decision can be viewed at: http://caselaw.lp.findlaw.com/data2/circs/fed/031615p.pdf THE FAIR USE DEFENSE SUCCESSFUL - LASTING TO KISS AND MAKE UP WITH RIVAL KP Permanent Make-Up, Inc. v. Lasting Impression I, Inc., (Sup. Ct., December 8, 2004) On December 29, 2004, the United States Supreme Court decided the case of KP Permanent Make-Up, Inc. v. Lasting Impression I, Inc. et al. The Court found that a party raising the affirmative defense of fair use in a trademark infringement case does not have the burden of negating a likelihood of consumer confusion. KP Permanent Make-Up and Lasting Impression are both cosmetic companies that used some form of the alleged trademark MICRO COLOR on or in connection with permanent make-up. In 1992, Lasting applied to register its trademark MICRO COLORS and Design, the application issued to registration in 1993, and became incontestable in 1999. KP began using its trademark for MICROCOLOR in 1990 or 1991. In 1999, Lasting demanded that KP cease and desist from using its trademark for MICROCOLOR. In response, KP filed a declaratory judgment. Lasting counterclaimed for trademark infringement, among other claims, and the District Court dismissed the case on summary judgment, finding that KP used MICROCOLOR descriptively and not as a trademark. On appeal the Ninth Circuit reversed, finding that the District Court erred in addressing the fair use defense without discussing the issue of likelihood of confusion. The Supreme Court granted certiorari to resolve the dispute and again reversed, holding the burden of proving a likelihood of confusion rests with the party claiming trademark infringement not with the party asserting a fair use defense. In its analysis, the Court observed a degree of confusion by the party asserting the fair use defense is tolerable, provided the mark is used descriptively. However, the Court did not completely foreclose the possibility of an infringement finding, even when a fair use defense is asserted, if there is significant showing of likelihood of confusion. The decision can be viewed at: http://laws.findlaw.com/us/000/03-409.html |
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