District of Massachusetts IP Blog

Inequitable Conduct Finding Vacated After Therasense

In May 2011 Judge Saris ruled that a patent directed to three-dimensional scanning was unenforceable due to inequitable conduct.  Following the Federal Circuit’s tightening of inequitable conduct in its Therasense decision, Judge Saris vacated her earlier decision, holding that the facts of the case did not meet the hightened standard, noting that her previous findings of materiality had been “cast to dust.”

In addition Judge Saris granted summary judgment in favor of the patentee on 93A and Walker-Process anti-trust counterclaims and granted summary judgment in favor of the accused infringer of non-infringement of the resurrected patent.  A motion for summary judgment of non-infringement of a second asserted patent was denied. 

Metris U.S.A. Inc. v. Faro Tech., Inc., 08-11187-PBS (D. Mass. Sep. 19, 2011)

Vlingo v. Nuance War Keeps Raging

The latest battle in the “all-out war” between speech recognition competitors Vlingo and Nuance has just begun.  Following a jury verdict finding that Vlingo did not infringe Nuance’s patents, Vlingo has filed suit against Nuance for unfair competition, tortious interference and commercial bribery stemming from Nuance’s alleged campaign to drive down Vlingo’s acquisition price through improper patent litigation. 

CT Scanning Acquisition Turned Sour Leads to DJ Complaint

Analogic Corp. (Peabody, MA) has been sued by NeuroLogica Corp. (Danvers, MA), two of NeuroLogica’s founders, and NeuroLogica’s Chairman of the Board Bernard Gordon.  All used to be with Analogic, including Gordon, who used to be Chairman of the Board at Analogic.  The dispute stems from NeuroLogica’s attempts to find an acquisition partner and its claims that Analogic threatened legal action with NeuroLogica simply to drive down Neurologica’s price for potential acquisition by Analogic.  The plaintiffs seek declarations that they have not breached their fiduciary duties to Analogic, that they own certain intellectual property related to CT scanning, that Neurologica has not infringed Analogic’s Patent No. 5,867,553, and that the patent is invalid.  They also bring their own claims for tortious interference and 93A violations. 

The details of the interaction between the parties make for interesting reading, but the summary is as follows: 

No 93A Liability for CAD Knockoff

Following a jury trial, Real View LLC and its founders were found not liable for copyright infringement, trade dress infringement, or interference with contract for their creation of computer-aided kitchen design software that deliberately mimicked the design of a similar program of 20-20 Technologies.  Real View was, however, found liable for copyright infringement for downloading an illegal copy of 20-20's program and was hit for over $1M in damages. 

Following trial, Judge Saris took up the question of whether Real View’s other activities (improperly accessing 20-20’s tutorial videos, copying 20-20’s marketing scheme, etc.) violated 93A.   

Post-Trial Motions Leave No 93A Liability for Competing Carpet Installers

Carpet installers Empire Today and National Floors Direct (NFD) were engaged in a dispute stemming from fierce direct competition and the departure of roughly ten managers and thirty sales representatives from Empire to NFD “under acrimonious conditions.”  

At trial (a rare occurrence before Judge Tauro) Empire asserted trademark infringement and various tortious interference claims against NFD.  NFD asserted counterclaims for defamation, false advertising and abuse of process.  The jury found against the plaintiff on all its affirmative claims and in favor of defendant on its abuse of process counterclaim, awarding $500,000 in damages.  Each party cross moved for JMOL as well as for judgment on dueling 93A claims.  Judge Tauro’s eventual decision was to leave the parties in the same condition the jury left them. 

Cross Motions In Bio Case Make New Mass. Law

Max-Planck and U. Mass. filed dueling summary judgment motions in their ongoing spat over ownership of pending related (but differently owned) patent applications directed to RNA.  The case is so heated it spun off a malpractice case regarding priority claims.  Here, Max-Planck’s motion for partial summary judgment was denied while U. Mass.’ motion for partial summary judgment was granted.  In addressing these motions Judge Saris ended up making new Massachusetts law regarding sovereign immunity and 93A. 

Trademark Fight Drives On

A dispute over trademarks featuring the word DRIVE for financial services / auto loans has been going for several years.  One company, Santander Consumer, uses a variety of DRIVE themed marks for financial services, in particular purchasing loans from automobile dealerships.  Another company, Inopin uses marks featuring DRIVEUSA for financial services including auto and vehicle loans. 

Santander instituted a TTAB proceeding against Inopin’s mark, which it dismissed after two years (“on the eve of trial” as alleged by Inopin) in favor of federal litigation in the N.D. Tex.  That case was transferred to Mass. for lack of personal jurisdiction over the defendants.  Then things got messy. 

Out-of-State Accused Infringer Stuck in Massachusetts

Berklee College of Music alleged in a complaint against Music Industry Educators that MIE’s website used several paragraphs copied from Berklee’s online course descriptions along with marks that are similar to Berklee’s trademarks.  MIE’s motion to dismiss for lack of personal jurisdiction was denied by Judge Tauro.

 

MIE’s only connections to Massachusetts:

 

• The allegedly copied content came from Berklee’s servers in Mass.

• MIE’s website was available in Mass.

• Four individuals from Mass. had emailed MIE about taking courses, but MIE did not respond

 

Despite these somewhat tenuous connections to the state, Judge Tauro found that personal jurisdiction existed.  A variety of factors and many cases were discussed, but the decision seemed to boil down to the following logic:

 

litigation in a forum where Plaintiff may readily access resources necessary to efficiently conclude the matter and bring those who misuse intellectual property to justice serves the interest of the judicial system in obtaining the most effective resolution of the controversy…Requiring alleged infringers such as MIE to bear the burden of traveling to a forum in which their voluntary actions have caused foreseeable injury encourages them to consider this burden before they act.

 

(Decision at 10.)

 

The lesson to be learned from this, and other D. Mass. cases, is that disputes involving Massachusetts intellectual property will be decided in Massachusetts.

 

An additional motion to dismiss a 93A claim for preemption under the Copyright Act was denied since it relied on both copyright and trademark theories.

 

Berklee College of Music, Inc. v. Music Indus. Educators, Inc., 09-11627-JLT (D. Mass. August 4, 2010)

Counterclaims Dismissed and Sanctions Granted in Counterfeit Suit

Judge O’Toole entered separate orders against a defendant in a counterfeit goods case.  In the first order Judge O’Toole dismisses three counterclaims.  The first counterclaim, for tortious interference based on improper filing of the lawsuit, was dismissed because the defendant admits in the answer facts sufficient to support the initial claim.  The second counterclaim, for conversion, was dismissed because of insufficient pleading and because plaintiff did not take any action to possess the goods in question, save for seeking an impoundment order from the court, which was granted.  The third counterclaim, for unfair competition under M.G.L. ch. 93A for improper filing of the suit, was dismissed on the same grounds as the tortious interfence claim.

 

The court declined to enter Rule 11 sanctions for filing of the counterclaims.  But in the second order the court entered Rule 37 sanctions against the defendant for failure to comply with discovery (following at least four motions to compel) including failure to answer interrogatories, failure to attend a noticed deposition (in Tijuana), and other failures.  The sanctions included an order to produce documents and responses to interrogatories within 14 days, an order that the deposition be held in Boston, and an award of fees and costs of just under $15,000, and a stay of all defendant’s discovery requests until the sanctions were met.

 

Bose BV v. Zavala, 09-11360-GAO (D. Mass. July 8, 2010)

Successful Trade Secret Plaintiff Awarded Fees, But Not Enhanced Damages, Under 93A

In 2007 Atlantic Research Marketing Systems, Inc. (West Bridgewater, MA) sued Troy Industries, Inc. (West Springfield, MA) and its founder (a former A.R.M.S. employee) for misappropriation of trade secrets, breach of fiduciary duty, and deceptive trade practices in violation of 93A.  A jury awarded A.R.M.S. $1.8M at trial for all but the 93A count, which Judge Saris reserved for later proceedings.  Judge Saris just entered her decision, which can be found here.

The opinion summarizes the facts of the case, the salient points of which are:  Troy worked at A.R.M.S. for a year or so before leaving following a disagreement with the owner.  Very shortly thereafter Troy began marketing a similar product to one A.R.M.S. had in secret development while Troy was an employee.  Troy was found to have engaged in misappropriation of trade secrets but there was no evidence that he had become an A.R.M.S. employee under false pretenses, that he intended any particular harm to A.R.M.S. through his actions, etc.

 

In her ruling Judge Saris found that Troy had engaged in deceptive trade practices but did not engage in overtly egregious behavior that was sufficiently “knowing and willful” to trigger the punitive remedy of enhanced damages.  Because the plaintiff’s actual damages under 93A were covered in the jury’s award, the additional recovery was limited to an award of reasonable attorneys’ fees, expenses and costs, including expert fees. 

Atlantic Research Marketing Systems, Inc. v. Troy Industries, Inc., 07-11576-PBS (D. Mass. May 11, 2010)