Justia U.S. 3rd Circuit Court of Appeals Opinion Summaries

Articles Posted in Intellectual Property

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Following a generally favorable result in the district court, Motel 6 appealed, arguing that the district court erred interpreting the Lanham Act’s anticounterfeiting penalties not to reach the use of the Motel 6 mark without permission and in failing to award prejudgment interest to Motel 6. The Third Circuit vacated as to those issues. The lower court interpreted the Lanham Act too narrowly and contrary to the weight of persuasive authority concerning treble damages under 15 U.S.C. 1117(b). On remand the court must determine whether “extenuating circumstances” exist such that treble damages would not be appropriate. While the court was not required to award prejudgment interest once it found the case exceptional for purposes of attorney’s fees and costs under Section 1117(a), it may do so after reconsidering the counterfeiting issue. View "Motel 6 Operating LP v. HI Hotel Group LLC" on Justia Law

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Leonard takes photographs of stem cells using electron microscopes. Only a few photographers engage in this highly technical type of photography. The images first appear in black and white, and Leonard uses his “artistic judgment” to enhance the photos in color. Leonard created the images at issue in the 1990s but did not register them with the Copyright Office until 2007, when he planned to file suit. Stemtech “formulates” and sells nutritional supplement products through thousands of distributors. In 2006, Stemtech contacted Leonard about using Image for its internal magazine and its website. Stemtech declined to license the image for website use because the price was too high but used the image twice in its magazine. Leonard billed Stemtech $950 but was only paid $500. Stemtech then used the images without a license in its other promotional materials, including websites, In 2007, Leonard discovered his images on numerous Stemtech-affiliated websites. He took screenshots of and archived the webpages and retained copies of emails he sent to the contacts on various sites. When Stemtech refused Leonard’s requests, Leonard filed suit for copyright infringement. A jury returned a $1.6 million verdict in Leonard’s favor. The Third Circuit affirmed, rejecting challenges to various rulings, but vacated the district court’s denial of Leonard’s request for pre-judgment interest. View "Leonard v. Stemtech Int'l, Inc" on Justia Law

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In 2012 Navajo Nation sued for trademark infringement, alleging that Urban Outfitters “advertised, promoted, and sold goods under the ‘Navaho’ and ‘Navajo’ names and marks” on the Internet and in retail stores “[s]ince at least March 16, 2009.” Urban Outfitters tendered the complaint to its insurers. OneBeacon provided commercial general and umbrella liability coverage to Urban Outfitters until July 7, 2010, with “personal and advertising injury” coverage. On July 7, 2010, Hanover became the responsible insurer under a “fronting policy.” On July 7, 2011 Hanover issued separate commercial general liability and umbrella liability policies to Urban Outfitters. The “fronting policy” and Hanover-issued policies excluded coverage for “personal and advertising injury” liability “arising out of oral or written publication of material whose first publication took place before the beginning of the policy period.” After providing a reservation of rights letter, informing Urban Outfitters of Hanover and OneBeacon’s joint retention of defense counsel, Hanover obtained a judicial a declaration that it was not responsible for defense or indemnification. The Third Circuit affirmed.The “prior publication” exclusion of liability insurance contracts prevents a company from obtaining ongoing insurance coverage for a continuing course of tortious conduct. Urban Outfitters engaged in similar liability-triggering behavior both before and during Hanover’s coverage period. View "Hanover Ins. Co v. Urban Outfitters Inc" on Justia Law

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Capital is a Delaware holding company, whose subsidiaries, Arrowood Indemnity and Arrowood Surplus Lines Insurance, provide insurance and investment-related financial services throughout the United States under the Arrowpoint Capital name. Capital unsuccessfully sought to enjoin AAM from using a logo or word mark employing the name “Arrowpoint” in connection with any investment-related products and services. The Third Circuit vacated and remanded, finding that the lower court employed an overly narrow interpretation of the kind of confusion that is actionable under the Lanham Act, 15 U.S.C. 1114. The court .failed to hold an evidentiary hearing, or to adequately set forth its rationale for discounting Capital’s evidence, or to hear oral argument, View "Arrowpoint Capital Corp v. Arrowpoint Asset Mgmt., LLC" on Justia Law

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Brownstein and Lindsay worked at LSDI, a direct mailing list company. In 1993 Lindsay began developing rules for categorizing names by ethnicity. Lindsay enlisted Brownstein to create computer programs that did everything from rewriting names into proper data format to turning the rules into computer code. The combined system of Lindsay’s rules and Brownstein’s computer code was called the LCID. Lindsay received a copyright registration for the rules in 1996, entitled “Ethnic Determinant System — Knowledge and Rule/Exception Basis,” including a copy of Brownstein’s programs as a “deposit copy” for the registration, 17 U.S.C. 407(a) and referencing associated “computer process” and “codes.” Lindsay listed herself as the only author. She gave Brownstein a copy of the registrations. He claims that he never reviewed them. Subsequently, LSDI demanded that Lindsay turnover the copyright registration. Lindsay and Brownstein left LSDI in 1997. Lindsay handled all business affairs and, over the next several years, executed several agreements to form new business entities to promote and transfer ownership of the LCID. There were several lawsuits with LSDI. In 2009, Brownstein left on bad terms, filed an oppressed shareholder lawsuit, and sought his own copyright registrations. He then sought a declaratory judgment of joint authorship of LCID under the Copyright Act. The district court found the claim time-barred and insufficient on the merits. The Third Circuit remanded, holding that an authorship claim accrues when a plaintiff’s authorship has been “expressly repudiated” and that courts have no authority to cancel copyright registrations. View "Brownstein v. Lindsay" on Justia Law

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In 1991 defendant left his job with an insurance brokerage for one with competitor and took two binders of print material for use by the competitor. After discovering the infringement, the employer filed suit in 2005 under 17 U.S.C. 101. There were no actual damages; the court awarded $16,561,230 from the competitor and $2,297,397 from the employee, representing about 70 percent of the competitor's profits, and 75 percent of the employee's commissions. On remand, the district court found that the award was not excessive and awarded interest: $4,112,859 against the competitor and $570,542 against the employee. The Third Circuit affirmed. The amount does not "shock the conscience" and, although the statute does not refer to pre-judgment interest, the award is consistent with the Copyright Act. The court rejected an argument that interest should be calculated from the time the infringement was discovered. The date of a claim's accrual is not changed by tolling of the limitations period.